Life is unpredictable, and financial setbacks can be one of the most challenging obstacles we face. When we’re hit with a sudden financial crisis, it can be difficult to get back on our feet.
While many may not know this, personal loans from online licensed money lenders can provide an immediate financial fix for those who need them. Personal loans from money lenders can help in multiple ways. For example, by securing a personal loan, you can survive financial emergencies and avoid prolonging the problem and potentially making it worse.
Despite the benefits of personal loans, some people are hesitant to apply for them. There are many misconceptions surrounding personal loans that can discourage people from seeking the help they need. However, with the right knowledge, you can make an informed decision about whether a personal loan is the most suitable solution for you.
If you’re considering applying for a personal loan from a registered money lender, there are a few things you should know before filling out the application form. Read on to find out what these are.
1. Personal loan offerings differ from one lender to another
When you need a personal loan, it’s important to do your research before choosing a lender. Different lenders may offer varying products, private money lending rates, fees and charges, as well as repayment terms, so it’s essential to compare your options and find the best fit for your needs.
Start by looking around at different money lenders and enquiring about their loan packages. This will give you a good idea of what’s available and help you determine which lender can offer you the best deal. Be sure to check out money lenders’ reviews and feedback from previous customers as well, to ensure the lender can truly deliver the services they claim to offer.
By taking the time to research and compare different lenders and what they can offer, you’ll be better equipped to make an informed decision about your personal loan. This can help you avoid any unexpected fees or issues down the road, plus ensure that you get the financial support you need without any added stress.
2. A good credit score is not necessary for a personal loan from a licensed lender
Many people assume that having a bad credit score means their personal loan application will be automatically rejected because banks and other financial institutions emphasise the importance of maintaining a good credit score. While there is definitely some truth to this, it’s not necessarily the case for licensed lenders.
In Singapore, most authorised lenders do not require borrowers to have a good credit score to obtain a personal loan. That being said, having a good credit score can increase your chances of securing a lower interest rate and a higher loan amount. This is because a good credit score demonstrates to the lender that you are capable of repaying the loan you applied for — a positive and responsible trait that would please any loan provider.
3. Personal loans from legal lenders don’t require collateral
Personal loans are different from larger loan types in that you usually do not need to offer your house or car as collateral to get approval. They are commonly referred to as unsecured loans. As long as you satisfy the requirements set by the money lender and provide the necessary documentation, you can apply for an unsecured personal loan.
4. You can apply for personal loans from a licensed lender even if you already have an existing unsettled loan
Many people who consider applying for a personal loan may not do so because they believe they will not be approved due to the fact they’re still servicing existing unsettled loans, but this is not necessarily true.
Most legal loan companies are willing to consider applicants with active loans, as long as the applicant can demonstrate their ability to repay the loans simultaneously, and are within the legal limits of borrowing from licensed lenders.
But of course, if an applicant cannot demonstrate their ability to repay the loans, their loan application may very well be rejected, period.
It is also a common misconception that you can only have one type of loan with a particular money lender. While this may be true for some lenders, reputable and established authorised money lenders generally allow multiple types of loans under your name with them, subject to you meeting their requirements, as well as the limit stipulated by the Ministry of Law.
5. Licensed lenders in Singapore are subject to an interest rate cap for personal loans
In Singapore, legal lenders are strictly regulated by the Ministry of Law and are only allowed to charge interest rates of up to 4% monthly. If a lender charges more than 4%, it is a sign that they are not complying with local regulations. The 4% monthly interest rate cap applies to late interest rates, too.
Late interest rates —and late repayment fees— will kick in if you fail to make your monthly repayments on time. This is extremely dangerous because of the accumulation of interest over time. If you frequently miss payments or do not pay on time, your interest charges and late fees will continue to pile up and snowball.
6. Applying for a personal loan from a licensed lender is fast and uncomplicated
Another common misconception about the personal loan application process is that it is long and tedious due to the need for identity and document verification, which can take days or even weeks.
However, advancements in technology have streamlined the process greatly, eliminating the need for time-consuming assessments and allowing for quicker approvals. As long as applicants meet the prerequisites and provide the necessary documentation, the application process can take just a few minutes.
It is important to note that the speed of approval may vary depending on the moneylending company. Legal lenders are required to meet you in-person at their office to verify your identity and do a quick credit assessment before granting the loan. That being said, the general principle is to minimise the time gap between application and loan disbursement.
7. You should only borrow what is necessary
Since approval rates for loan applications are generally high, some individuals may be tempted to request a loan amount that exceeds their actual needs. It is important to avoid this trap because there is a cost associated with borrowing, namely interest.
Many people overlook the interest charges they accumulate, which can rapidly increaseif they fail to repay their loan promptly. Therefore, it is safer to request only the loan amount that you require to avoid accruing unnecessary interest charges.
Read this article to learn more about tips for borrowing money the smart and right way.
Conclusion
If you find yourself in a situation where your finances are stretched thin at an inconvenient time, applying for a personal loan from a trustworthy money lending agency can be a helpful solution.
If you need a reputable Hougang money lender or Toa Payoh money lender, look no further than Goldstar Credit. We take pride in providing various loan packages to help you navigate through different financial challenges. Our loan application process is simple and speedy, plus we offer flexible repayment terms.
Ready to apply for a loan? Simply kickstart the application process on our secure website today.
To learn more, speak with one of our loan specialists today.
About the Author
Instituted since 2009, Goldstar Credit is a proficient licensed lender through and through. We pride ourselves on sharing our extensive personal finance expertise and knowledge with anyone and everyone who is keen on learning more about them.