As the cost of living in Singapore have been rising continuously every year, some of us could be caught offside when some insistent matters unexpectedly surface that need cash. In such cases, it's cash that you may not have but you've got to have.
So you decide to borrow money. Instead of encroaching on family, relations and buddies, you turn to banks and licensed moneylenders for an individual loan.
Lending criteria for banks and licensed moneylenders:
- For annual salary of S$30,000 or more, you can sign up for credit arrangements that grant you credit up to four times your monthly salary;
- For annual income between S$20,000 to S$30,000, you can borrow up to twice your monthly pay;
- For yearly salary below S$20,000, you can only borrow up to S$3,000 from licensed moneylenders at maximum 18% interest per annum;
- To borrow from banks, you must have a clean credit score, as it is the first criteria they look at. So if you've not been constantly servicing your credit card bills or your hire purchases, then you're disadvantaged.
Nonetheless it is sort of tough to borrow from approved moneylenders, as they happen to be not standardised in their dealings. Every one of the 243 licensed moneylenders (as of 1 Feb 2012) has its own set of T&Cs for loans, and private loans are the most well-liked in their business.
Things worth doing before seeing any licensed moneylenders:
- Budget your monthly take home salary and whittle it down to your expendable amount after making an allowance for all of your financial liabilities;
- Derive the amount you can repay in full every month from your throwaway amount, having set aside some cash for savings.
Things to ask the approved moneylenders:
- The amount you wish to borrow and whether or not they can give you;
- The interest rate and how it is calculated;The repayment period;
- Any other additional charges and charges which will apply.
Things to consider in picking the most preferred moneylender:
- The repayment amount matches or is less than your worked out repayment amount;
- Understand all the T&Cs the moneylender put forward;
- The moneylender's demeanour and approach.
Things to notice when signing the contract:
- The contract's content matches the oral reason by the moneylender;
- The contract lists correctly the principal loan amount, the IR, the repayment period and the repayment amount due monthly;
- The moneylender passes you the full loan amount as concluded without deducting any amount for any fee, if any, must be told to you earlier;
- You are assured you will get a dated and signed invoice for each repayment and/or costs, as well as a half-yearly statement from the moneylender.
On your side, you must:
- Swiftly repay all monthly payments;
- If at all possible, pay back your principal amount earlier, if there's no clause in the contract that proscribes it;
- Keep all bills and statements of account for future clarification if necessary.
Don't borrow more than you can repay, and keep to your payments exactly.
So you decide to borrow money. Instead of encroaching on family, relations and buddies, you turn to banks and licensed moneylenders for an individual loan.
Lending criteria for banks and licensed moneylenders:
- For annual salary of S$30,000 or more, you can sign up for credit arrangements that grant you credit up to four times your monthly salary;
- For annual income between S$20,000 to S$30,000, you can borrow up to twice your monthly pay;
- For yearly salary below S$20,000, you can only borrow up to S$3,000 from licensed moneylenders at maximum 18% interest per annum;
- To borrow from banks, you must have a clean credit score, as it is the first criteria they look at. So if you've not been constantly servicing your credit card bills or your hire purchases, then you're disadvantaged.
Nonetheless it is sort of tough to borrow from approved moneylenders, as they happen to be not standardised in their dealings. Every one of the 243 licensed moneylenders (as of 1 Feb 2012) has its own set of T&Cs for loans, and private loans are the most well-liked in their business.
Things worth doing before seeing any licensed moneylenders:
- Budget your monthly take home salary and whittle it down to your expendable amount after making an allowance for all of your financial liabilities;
- Derive the amount you can repay in full every month from your throwaway amount, having set aside some cash for savings.
Things to ask the approved moneylenders:
- The amount you wish to borrow and whether or not they can give you;
- The interest rate and how it is calculated;The repayment period;
- Any other additional charges and charges which will apply.
Things to consider in picking the most preferred moneylender:
- The repayment amount matches or is less than your worked out repayment amount;
- Understand all the T&Cs the moneylender put forward;
- The moneylender's demeanour and approach.
Things to notice when signing the contract:
- The contract's content matches the oral reason by the moneylender;
- The contract lists correctly the principal loan amount, the IR, the repayment period and the repayment amount due monthly;
- The moneylender passes you the full loan amount as concluded without deducting any amount for any fee, if any, must be told to you earlier;
- You are assured you will get a dated and signed invoice for each repayment and/or costs, as well as a half-yearly statement from the moneylender.
On your side, you must:
- Swiftly repay all monthly payments;
- If at all possible, pay back your principal amount earlier, if there's no clause in the contract that proscribes it;
- Keep all bills and statements of account for future clarification if necessary.
Don't borrow more than you can repay, and keep to your payments exactly.
About the Author:
Ivana Hung works in a reputable group of banks and provides information on loans and the way to apply loans.
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