Before you consider taking a loan, be it for education, a house, or for hospital bills, you need to consider a few factors first.
There are several institutions in Singapore where you can go to borrow money for whatever reason you have, but you need to be smart about it, so as to best protect your interests. Banks, house loans, and moneylenders are all sources of loans. If you want to get a loan quickly and with little fuss, a moneylender would be your best bet.
However, moneylenders get a bad rep when it comes to their contracts, fees, and interest rates, despite the fact that the Ministry of Law has set up rules and regulations to make sure that their dealings are straightforward and cost effective.
- Study other agencies that offer loans before you settle on the moneylender. There are several options available, including financial assistance programs that are granted by government agencies. You can contact these agencies directly and find out about the schemes they have available, and which is most appropriate for you and your needs.
- If you have decided to go with a moneylender, make sure that they are licensed. You can check the list of licensed Singapore moneylenders to know who is and who isn’t legitimate.
- Not all moneylenders have the same terms and conditions. Check several moneylenders to know their policies, their terms and conditions, before settling on one. Taking a loan is not a decision to be rushed into, so take your time and do your research.
- The moneylender should give you a copy of the loan contract once you apply for a loan. This contract is important so that you will know what their terms are for repayments and the like.
- The moneylender should be able to explain the contract to you in words you can understand. The terms and conditions, repayment schemes, late fees, interest rates, and other fees need to be clearly explained to you while you go over the contract.
- Go over every minute detail in the contract before taking a loan. Make sure you understand everything stipulated in it and ask for clarification when you don’t understand any detail. Even though the Ministry of Law is making great strides in monitoring the activities of moneylenders, some unscrupulous elements still slip through the cracks, and it will be up to you catch them to justice. If you get into even more financial trouble after agreeing to a contract you did not understand, you would be the one to blame. Be on your guard.
Know your credit score, your income, your expenditure, and everything about your financial status. This is so as to ensure that you can actually work according to the terms of training loan contract you are taking. If the contract stipulates a monthly repayment of S$500 at the beginning of the month, while you collect a paycheck of S$500 at the end of every month, those terms may not be ones you can fulfill. Be sure that you can abide by the terms stated in a loan contract before you take it.