Life can be 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.
However, personal loans from authorised money lenders can provide an immediate financial fix for those who need them. By securing a short-term personal loan, you can avoid prolonging the problem and potentially making it worse. Instead, you can nip the issue in the bud and start your financial recovery journey.
Despite the many reasons to get a personal loan, some people are hesitant to apply for them. There are a lot of misconceptions surrounding personal loans that can discourage people from seeking the help they need. However, with a little bit of knowledge, you can make an informed decision about whether a personal loan is the right solution for you.
If you’re considering applying for a personal loan, there are a few things you should know before filling out the application form.
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 loan providers may offer varying products, money lenders’ interest rates, repayment terms, and loan tenure periods will differ so it’s essential to compare your options and find the best fit for your needs.
Start by looking around at different moneylenders and inquiring about their offerings. 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 consider reviews and feedback from previous customers as well, the best money lender reviews will tell you if the lender can truly deliver the services they claim to offer.
By taking the time to research and compare different lenders, 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 and 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 moneylender
Many people assume that having a bad credit score means their personal loan application will be automatically rejected because banks and other financial agencies emphasize the importance of maintaining a good credit score. While there is some truth to this, it’s not necessarily the case for licensed moneylenders.
In Singapore, most moneylenders do not require a good credit score to obtain a personal loan. However, 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.
3. Personal loans from licensed moneylenders don’t require collateral
Personal loans are different from larger loan types in that you 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 of the moneylender you choose and provide the necessary documentation, you can apply for a personal loan.
4. You can apply for personal loans from a licensed moneylender 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 having existing unsettled loans, but this is not necessarily true. Most money-lending agencies are still willing to consider applicants with ongoing loans with them, as long as the applicant can demonstrate their ability to repay two loans simultaneously. However, if an applicant cannot demonstrate their ability to repay two loans, their loan application may be rejected.
It is also a common misconception that you can only have one type of loan with a particular moneylender. While this may be true for some moneylenders, reputable and established moneylenders generally allow multiple types of loans under your name with them, subject to meeting MinLaw’s requirements and stipulated limit.
5. Licensed moneylenders in Singapore are subject to an interest rate cap for personal loans
In Singapore, licensed personal loan moneylenders are strictly regulated by the Ministry of Law and are only allowed to charge interest rates of up to 4%. If a moneylender charges more than 4%, it is a sign that they are not complying with local regulations.
Interest rates can become high if you fail to make your monthly repayment dues. This is because of the accumulation of interest over time. If you frequently miss payments or do not pay on time, the interest charges will continue to pile up.
6. Applying for a personal loan from a licensed moneylender 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 application verification, which can take days or even weeks. However, advancements in technology have streamlined the process, eliminating the need for manual assessment and allowing for quicker approvals. As long as applicants meet the prerequisites and provide the necessary documentation, the application can take just a few minutes.
It is important to note that the speed of approval may vary depending on the money-lending agency. However, 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. However, it is important to avoid this trap because there is a cost associated with borrowing, namely interest rates.
Many people overlook the interest charges they accumulate, which can rapidly accumulate if 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.
Learning how to borrow money the smart and right way is key to starting your financial journey smoothly, so make sure to only borrow what is necessary.
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 licensed money lender in the Hougang or Toa Payoh area, look no further than Goldstar Credit. We take pride in providing various loan packages to help you navigate through financial challenges. Our loan application process is simple and easy, and we offer flexible repayment terms.
To learn more, speak with us today 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.
