Before making any financial decision, it would be best to do your research carefully. If you are thinking of getting a personal loan in Singapore, comparing the personal loans available is the first thing you want to do. This article will present to you some of the most important elements you must know about the concept of borrowing and loans in general! What is what and all the other details will be clear to you by the end of the article.
What Does a Personal Loan Mean?
A personal loan is one of the most popular types of loans in the world. As with any other loan, you need to meet the lender’s requirements in order to receive the loan. The great thing about this type of loan is that you can use it for almost anything. It’s not a restrictive loan, which is why so many people choose it. You can get this type of loan from a bank or a legal moneylender. If you are not sure that you can trust a moneylender, or are afraid of scammers, don’t worry, this will be discussed in one of the next sections. Now, after you have applied, and your request has been approved, you need to sign the contract.
The signing process offers you a chance to ask questions and even to negotiate terms. Make sure that you understand both your rights and your responsibilities before signing. Ask about the exact amount that you’ll have to pay every month. Remember, you don’t need to pay back only the amount that you borrowed, because an interest rate is going to be added to that sum. The percentage of the interest rate is going to be slightly different depending on the lender that you choose.
What Can You Use This Type of Loan for?
As previously mentioned, you can use it for lots of different purposes. But let’s look at some of those purposes. One of the main reasons people use personal loans is to do home renovations. There are many renovations that one might need to do, and this type of loan can help you cover them. The second most common reason is emergencies, of all kinds. An emergency can either be a visit to the dentist, or a trip that you need to take. Weddings, funerals and other expensive events might also require you to take out a loan.
Debt consolidation is another popular choice. Even if there are debt consolidation loans, usually choosing them has more downsides than the loan we are talking about. Therefore, depending on the loan terms, you might not want a debt consolidation loan. Any major purchases that you have in mind, cars, appliances and devices, can be all covered by this type of loan. Moreover, holiday or relocation expenses can also be paid with this loan.
Can You Trust a Moneylender?
Many people still believe that you can only safely borrow from a bank, but that hasn’t been true for a while now. Thankfully, the Minister of Law in Singapore has put together a list where you can check to see if a moneylender is licensed or not. It’s essential that you never borrow from an unlicensed moneylender. Licensed moneylenders are regulated by the government, which means that there are laws protecting you and your money. But, moneylenders that are not licensed are basically scammers. It might not seem like a big deal at first, but doing business with them can be very dangerous for you. To make it easier to spot the scammers, here’s a list of things a legal moneylender would never do:
- They will never contact you first.
- They don’t communicate through WhatsApp, Facebook, or other similar apps.
- They don’t rush you into signing anything.
- They don’t ask for money before applying.
- They would never harass you or anyone close to you.
Moreover, if a licensed moneylender has harassed you, know that you can go to the police or CAS, which stands for the Credit Association of Singapore. So, you only borrow from a licensed lender if you want to be protected.
Comparing the Personal Loans Available in Singapore
Now that you are familiar with what taking a personal loan in Singapore means, you probably want to know how comparing the personal loans available in Singapore can help you. Well, comparing the personal loans available can lead to you making the best financial decision. Loan terms will differ from one lender to another, and you want to ensure that you are signing the best contract possible. First of all, ensure that you are eligible for a loan with the lender that you’d like. Banks have stricter requirements than a moneylender, so you might want to check both options before deciding.
Compare the lenders by checking their reviews online and asking your family and friends about them. Choose the lender that seems the most trustworthy. You need to work with someone who is willing to communicate effectively with you throughout the whole process. Of course that what you want to do is to choose the lender that has the lowest interest rate. But don’t pay attention only to that, because a low interest rate might hide high fees. Therefore, check to see if those are mentioned clearly and upfront. A reputable moneylender is the best choice for you, especially if this is your first time taking a loan.
Conclusion
Knowing the details to look for when getting a personal loan can have a big impact on your finances. Understanding the dangers of borrowing from unlicensed moneylenders is another fundamental element when borrowing money. Don’t forget that a legal lender will never message you on WhatsApp to make you an offer, especially not when you didn’t apply for a loan first! Compare all of the loans available on the market and choose the best one for you. We hope that you will use this article as a guide, and that it will help you.
