How to Obtain a Loan from a Licensed Moneylender in Singapore
Introduction
Finding yourself in need of extra cash for an emergency expense or to bridge a financial gap? Licensed moneylenders in Singapore can be an option to consider when you need to borrow money quickly and easily. Compared to traditional banks, licensed moneylenders often have faster approval times, fewer requirements, and offer more privacy. Read on to learn more about licensed moneylenders in Singapore, the loan application process, and tips for borrowing responsibly.
Reasons to Borrow from Licensed Moneylenders
Quick Approval Process
One of the main advantages of borrowing from licensed moneylenders is that they can approve loans much faster than banks, often within a day. This makes them ideal when you need cash urgently for an emergency situation. Their loan application process is streamlined and straightforward as well.
Fewer Requirements Compared to Banks
Licensed moneylenders have fewer eligibility criteria compared to banks and are more flexible. You may be able to get approved for a loan even if you have a low credit score or limited credit history. Income documents also may not be required in some cases. This makes borrowing more accessible.
Private and Confidential
Privacy is also better protected when borrowing from licensed moneylenders. They do not submit information to the country’s credit bureaus. Banks may conduct credit checks and submit your info to credit bureaus which can impact your credit score. With moneylenders, the process is private.
Types of Loans Offered by Licensed Moneylenders
Licensed moneylenders offer a variety of loan products to suit different needs. Here are some of the common loans you can get:
Personal Loans
These unsecured loans can be used for any personal purpose, whether you need cash for renovations, medical bills, or just extra cash to tie you over till your next paycheck. Loan amounts of up to S$35,000 are possible based on eligibility.
Payday Loans
Payday loans are small, short-term loans that provide fast cash to help you meet urgent financial obligations before your next paycheck arrives. These quick loans are typically due on your next pay date.
Foreigner Loans
Foreigners working in Singapore, including EP and S Pass holders, can also borrow from licensed moneylenders. Some lenders cater specifically to foreigners with loan packages designed for their profile.
Finding a Reputable Licensed Moneylender
With hundreds of licensed moneylenders in Singapore, it is important to find one that is reliable and reputable. Here are some tips:
Check License and Registration
Verify that the moneylender is listed on the Ministry of Law’s registry of licensed moneylenders. This ensures they are legal and regulated.
Read Online Reviews
Check third-party review sites to read customer feedback and experiences. This gives insight into their service levels and lending practices. Avoid lenders with many negative reviews.
Compare Interest Rates and Fees
Interest rates can vary significantly between lenders, from as low as 4% per month up to over 10% per month. Compare quotes from multiple lenders. Also check for any processing fees or late payment fees.
Loan Application Process
If you’ve identified a licensed moneylender to borrow from, here is a typical application process:
Submit Required Documents
You’ll need to submit documents such as your NRIC, proof of income, address proof, and possibly your CPF contribution history. Foreigners will need passport, employment pass, and proof of income.
Get Approved
The lender will review your documents and inform you if you are approved and how much you are eligible to borrow. This can take anywhere from 30 minutes to a few days.
Receive Funds
Once approved, the lender will disburse the loan amount directly to your bank account. Some may issue a check. You can then use the funds for your needs.
Tips for Responsible Borrowing
Borrowing from licensed moneylenders can provide quick access to cash, but you need to be a responsible borrower. Here are some essential tips:
Calculate Your Repayment Capability First
Before even applying for a loan, carefully calculate your current monthly expenses and income. Determine the maximum loan repayment installment you can realistically afford each month without straining your finances. This gives you a better sense of your repayment capability and the loan amount to apply for.
Borrow Only What You Absolutely Need
One of the biggest mistakes borrowers make is taking on debt for wants rather than absolute needs. For instance, borrowing for a luxury vacation or shopping splurge versus borrowing to pay urgent medical bills or emergency home repairs. Avoid excessive debt by being very clear about your needs and borrowing only the required amount.
Read All Terms Thoroughly Before Signing
Never sign the loan agreement without first reading the terms and conditions diligently. Pay attention to key details like interest rate, processing fees, late fees, penalty charges, repayment schedule etc. Know exactly what you are signing up for so there are no surprises later.
Have a Loan Repayment Plan
Work out a repayment plan even before you get the loan. Calculate the monthly installments and map out a budget to ensure you can set aside sufficient funds each month to make the repayment on time. Factor in potential budget overruns as well.
Avoid Late Payments and Penalties
Once you start repayment, be diligent in paying every installment by the due date. Even being a day late can result in hefty late penalty fees and interest charges that accumulate quickly. This can strain your finances and result in debt spiraling out of control.
Pay Off Loan Quickly If Possible
Make an effort to repay your loan as quickly as possible, even paying a bit earlier or higher EMI if you can afford it. This reduces the total interest outgo. Prepaying or foreclosing loans that have exorbitant rates also makes sense if you have funds to spare.
Does this help expand on tips for borrowing responsibly from licensed moneylenders? Let me know if you need any clarification or have additional questions!
Conclusion
Licensed moneylenders can provide quick access to emergency cash when you need it. By checking lender reputation, comparing options, and borrowing responsibly, you can have a smooth loan experience. Consider your budget and repayment capability, and borrow only what you absolutely need.
