Taking out a loan is a vital decision in life. You can’t just walk into a consolidated bank and take out any loan simply because you qualify for it. Whether you are taking out a monthly instalment loan or a quick cash loan in Singapore, it is essential to compare the options available to you before making any choice. If you are unsure, here are 6 critical factors you should consider before committing yourself to any loan.
1. Loan term
While the terms of some loans can be as short as four weeks, others go up to as long as 24 months. Always opt for a loan that gives a sufficient payment period. In most cases, the longer the period of payment, the higher the overall paid amount. Those with a short payment period will have a higher monthly payment, but the overall amount paid will be lower.
2. Loan amount
The amount of loan one qualifies for mostly depends on their ability to repay the loan. Well, even if you are eligible for a given investment, you should take a loan only when you need it. Some of the factors licensed moneylenders consider when calculating the amount of loan you are qualified for include your income, the amount borrowed, your credit history, and your payment ability.
3. Turnaround Time
Turnaround time is the amount of time it takes for you to receive the loan after application. Most lending companies have turnaround times that depend on the amount borrowed. Large sums of money will take more time compared to small amounts. Also, the turnaround time varies from one lender to another. Before committing to any lender, compare the turnaround time, especially when all you need is a quick loan.
Choose a lender that will enable the highest repayment period. One point to note is that the higher the amount of repayment time, the higher the total money paid. Therefore, if the circumstances allow, you should pay your loan back as quickly as possible. Also, to avoid unnecessary penalties, choose a reasonable time in which you are sure you can complete your loan.
5. Lender’s Reputation
Ask around from people and gather the lender’s reputation. Check from the Ministry of Law if the lender is listed among licensed lenders. Check if their rates are displayed accurately on their website and if they are easily reachable from the contacts displayed on their website.
Every lender has their own set of eligibility requirements. Most lenders in Singapore require applicants to be above the age of 18, must be a Singapore citizen or hold a valid passport, have a work permit and must have a monthly income. However, some lenders have exception loan packages for the unemployed, people with bad credit, and for the self-employed.
The loan size you receive depends on the lender. Most lenders always reduce the loan from the initial amount borrowed. Therefore, it is essential to check the criteria used by a lender to dictate the amount you will receive. While some lenders offer between $100 to $2000, others provide loans as high as $5000. As such, you should apply for a loan only when you need it, instead of applying because you qualify for it.