Whether you might find your money constrained for the month or having to deal with time-pressing, unpredictable emergencies – when other cash sources have been exhausted, getting financial assistance such as instant cash loans will definitely lessen your burdens in these times of need. When applying for a loan, one has to decide between 2 options: to borrow money from the bank or a licensed moneylender in Singapore?
Before making an informed financial decision, it would be best to consider a few factors to ensure that you avoid situations in which you would have to eventually pay more than your capabilities. Here are some considerations to mull over before applying for any loan to get you started on your financial journey.
When exactly should I borrow money from a moneylender?
Most people usually turn to the banks that house their personal savings when they want to borrow money because a high loan amount is almost always guaranteed. However, this route can be rather tedious and unnecessarily lengthy. If you find yourself unable to meet their minimum requirements, you might want to approach a loan agency instead.
While you would still need to provide essential information such as your current financial standing, source of income, employment history, and the like, moneylenders in Singapore usually have more ‘relaxed’ requirements when compared to most established banks. Loan agencies also tend to disburse your loaned amount instantaneously; thus, if you have an urgent need for cash, you might want to skip out of the bank and opt for a reliable moneylender instead.
What should I look out for when taking out a loan from a moneylender?
In general, there are 4 vital factors that are best considered if you are applying for any loan – your repayment ability, fees, interest rates, and the moneylender’s legitimacy.
Before taking out a loan, it would be good to ponder whether you would be able to promptly repay the amount when they are due. In an instance where you find yourself not being able to meet the agreed terms for repayment, additional fees will incur for late payments, which may ultimately snowball. Hence, your repayment ability is crucial in ensuring that you stay on top of your loans.
There is a certain amount of late payment fee to be paid per month for times where an individual might not be able to pay on time. With this, it is vital to know that the fees should not exceed 10% of the loan principal. Thus, when having your pick at a moneylender to apply for a financial loan, it would be best to ensure that they comply with this mandate so that you do not pay more fees.
According to the Singapore Ministry of Law, interest rates should not exceed 4% each month – regardless of income and whether or not your loan is secured. This means that the maximum interest that a legal moneylender can charge you with is capped at 4%, and any higher than that would mean that they are not complying with the Ministry of Law.
Opting for a licensed moneylender such as Orange Credit would be the best option for individuals looking to avoid ballooning interest rates. For safety, one should always avoid loan sharks as not only do they usually partake in illegal anomalies; they will also highly likely introduce hidden fees that were not agreed upon initially.
Once you have chosen a legal, reliable moneylender, it is good to work towards keeping a good record with your moneylender. Doing so would increase your likelihood of getting any types of loan applications, such as debt consolidation loans, approved in the future and assist in receiving a higher loaned amount should you require it in the future.
Borrowing money should not be any more stressful than the financial pickle you might have found yourself in. To ensure a seamless financial loan journey, your best move is to understand all that it entails before making the decision to apply for a loan that is best suited for your needs.