7 Personal Loan Myths in Singapore – Don’t Let Them Stop You
If you need fast cash, but have certain misconceptions about personal loan in Singapore offered by a licensed money lender (LML), this guide will help to clear it up.
Personal loans by LML are often the last resort for customers who need funds. Many don’t use this credit option, and prefer to use cash withdrawal offered on credit cards.
With this type of instant cash loan, you can fund anything in the range of S$500 – S$100K. Repayment schedule is flexible and you’re expected to pay a low personal loan interest rate.
Why are you still reluctant to take up such a loan? Does your unwillingness have something to do with these seven common myths about it?
Myth #1 – It is only for the salaried
Are you a self-employed professional or contract worker? You may be not aware that you’re equally eligible for a fast cash loan in Singapore from legal moneylenders.
All you have to do is produce relevant business or employment details, bank statements, SingPass details and any other documents required.
Myth #2 – Procedures are complicated
Nothing can be further from the truth. You can easily apply a loan online from a licensed company. And furnish the correct documents and proofs in person. Your application will be processed quickly.
You should receive cash in less than an hour upon approval.
Myth #3 – Personal loans require security
While banks may insist on some form of security for large amounts, a private money lender in Singapore will offer you a loan without demanding security.
Myth #4 – Credit card purchases are cheaper
Your card may provide bigger credit limit, but charge higher interest rates on repayments. Borrowing from money lending companies come with lower interest charges.
Under new rules for LML, you can’t be charged more than 4% as monthly interest. You can use this loan calculator to check it out.
Do compare the interest rate payment on your cards with that of a Singapore money lender before you choose a loan that fits your needs.
Myth #5 – Borrower needs good credit scores
Credit scores are important, particularly for banks in Singapore. However, a lower score won’t prevent you from getting a personal loan from moneylenders.
They are less likely to reject your application due a lower score, unless you have a history of defaulting on payments.
Myth #6 – Existing loans affect personal loan eligibility
Are you afraid of being turned down because of EMI payments on your home loan? Legally approved lenders will not discard your application simply because you have an existing loan.
They may offer a smaller loan amount instead, if you owe a lot of money.
Myth #7 – Focus on interest rates
While you should check interest rates, it shouldn’t be the end-all. The loan comes with other charges include admin fees, late payment fees and interest on missed payments.
Some lenders may even charge a penalty for early settlement, as they lose interest income. Go through all the charges before you make a final decision.
Have you taken a personal loan in Singapore from private money lenders? Share you experience with other readers today!