Living in a major city like Singapore can be a costly affair. Maintaining the day to day expenses can itself be a hard task. Add to this the unexpected expenses such as medical emergencies or social occasions, and you’re left with a whole lot of expenses that your monthly income might not be able to cover. To cover this fiscal deficit, the best option is to rely on a licensed money lender to cover the extra costs. Licensed money lenders are the go-to options for short term loans taken to get you out of financial emergencies. There are quite a few options when it comes to picking a private money lender in Singapore, with Crawford website being one of the premium options.
Before you take a loan, there are a few things to consider carefully, which have been discussed below.
Choosing the right type of loan
There are different types of loans available under every private money lender such as Crawford. Before picking a particular type, one should evaluate the financial requirements for which they are applying for the loan.
The following points can come in handy while selecting a loan type:
- How big is the financial requirement: the primary aspect to decide while applying for a loan is evaluating how much money you require. For large scale emergencies such as medical needs, one often needs a large sum of money to tide over the crisis. On the other hand, just a small amount of money might be sufficient to cover the costs of less serious situations. Thus, before applying for a loan, one should determine exactly how big an amount they need to borrow.
- Factoring in the repayment terms: apart from the loan amount, different private money lenders in Singapore offer loans with different repayment terms. Some loans come with a fixed terms repayment plan, while others have variable terms of repayment. Choosing the type of repayment plan that is best suited for your financial needs is important in picking the correct loan type.
- Application to the CBS: the Credit Bureau or Singapore is the authority when it comes to providing credit reports required for loan applications. On applying for a credit report from CBS, one is charged a fee of S$6 and provided with their detailed credit report. This is vital for a loan application, as a good or bad credit report determines the favorable or unfavorable terms of the loan that you’re likely to get from the moneylender.
Make sure you have the necessary documents
If you are applying for a personal loan from a private money lender in Singapore, it is most likely that they’ll go through a thorough checking of your financial credibility before approving your loan. Due to this reason, it is essential to have all the necessary documents ready for inspection. One can check the details regarding the different loan types and their eligibility criteria from the Crawford website, before choosing a loan type that they are eligible for.
Once you have applied for a loan, there are a few documents that you should have with you for loan approval. These include:
- Proof of residency
- Employment/income proof
- Bank statements
- Credit score from CBS
- Past CPF statements.
Different private money lenders have different requirements for documents, so not all documents might be required for your loan. In the event of any additional documents being required, one is likely to be informed about it while making their application for the loan.
What are the costs involved?
Apart from the principal amount to be relayed, there are some additional costs to consider while applying for a loan. These costs vary from a money lender to a moneylender, but all of them are similar since they fall under the regulation of the Singapore Ministry of Law.
The additional costs include:
1. The interest: personal loans usually have a higher rate of interest. But, in Singapore, the rate of interest for personal loans is capped at 4% per month under licensed money lenders.
2. The administrative fee: private money lenders often charge an administrative fee to cover the loan processing charges. This fee has been called at 10%.
3. Late fees: Private money lending entities are liable to charge a late fee for non-payment of premiums on time. This fee is however maxed at S$60 per month.
4. The final point to be maintained under the Ministry of Law guidelines is that the total costs covering administrative costs, late fees, interest, and any other additional charges, cannot exceed the principal loan amount.
How to choose a licensed money lender
It is always best advised to pick a licensed private money lender while taking a loan. This is because they will fall under the guidelines set by the Singapore Ministry of Law, and has to operate strictly by the law. Picking out a licensed money lender from an unlicensed once is a fairly easy task. Firstly, one can check the list of licensed Singapore private money lenders to see if their money lender is on the list. This is a sure-shot way of picking out a licensed money lender as the list is inclusive of every registered private money lender in Singapore.
Another easy way to spot an unlicensed moneylender from a licensed one is to check whether or not they are soliciting business via phone calls, which is strictly barred under the guidelines of the Ministry of Law. Licensed private money lenders such as Crawford, also provide their loan applicants with detailed information regarding their loan terms and repayment details. They will also never hold on to your original documents, such as the NRIC.
If you require money in a hurry, often taking a personal loan from a private money lender is the only viable option. Through careful consideration of the loan terms and picking the right money lender, one can get their required loan approved without much hassle. By following the above-discussed points, one should have no problem in applying for a personal loan the next time you need one.