Today, financial woes have become a very common occurrence for most people. Unless you belong to the less than 1% ultra-rich in your country, then you are very susceptible to encountering financial difficulties.That is how competitive and difficult life has become. Even if we work our hardest, there will be times when our savings aren’t just enough to fund a medical emergency or a once in a lifetime financial opportunity. And in most cases, we are left alone with no help in dealing with the crisis.
Fortunately, money lenders were introduced to help people deal with their financial difficulties. With the help of a licensed money lender, you will be able to borrow a certain amount of money that you can use in solving your current predicament.However, not all people are qualified to borrow money. In Singapore, there are certain requirements that one needs to qualify to apply for a loan.
First, they must have the ability to pay the loan such as having a stable job or source of income. Second, they must have sufficient documents to prove their identity and residence in the country. And in some special loans, there may be more requirements to qualify.
If you are interested in learning more about the loans in Singapore, then this article from our expert friends at Raffles Credit will surely be of great help.
Types of loans that you can apply to in Singapore?
To address the different types of financial difficulties that citizens encounter in their daily lives, the Moneylender Act was established to regulate the practice of money lending in Singapore. And through the act, different types of loans were developed to provide versatile solutions to different financial needs.
Payday loans or Salary loans are the most popular and common types of loans that people apply to nowadays. As the name suggests, payday loans or salary loans are loans that are taken against your incoming salary. Payday loans are designed to assist those people that entirely depend on their salaries to sustain their daily lives.
Payday loans are short-term loans that usually last from 1-6 months. And because of the nature of the loan, its’ interests are usually higher compared to long-term loans.
Benefits Of Payday Loans
- This loan is flexible and convenient to a borrower
- Payday loan has fixed interest rates
- The loan application is approved fast
- It is easy for a borrower to qualify for a payday loan.
Personal loans are another popular type of loan that people in Singapore apply to. Personal loans are simply loans that are taken against your current credit standing.
Your credit standing is based on your assets, outstanding debts, and current income. It is like the score that financial institutions use to assess your ability to absorb the debt. Thus, the higher your credit rating or standing is the higher the chances of you getting a higher amount of loan.
Personal loans have no specific purpose intended compared to Salary loans. One can generally apply to a personal loan with no apparent reason. It can be used to fund a vacation, a purchase of an asset, investment or any other financial endeavours. Moreover, personal loans can be short-term or long-term loans depending on the amount you wish to borrow and your credit standing.
Benefits Of Personal Loans
- You can borrow loan amounts up to 4 times of your monthly income
- Personal loans have fixed interest rates
- This loan has an early repayment alternative.
- The monthly repayment amount is the same every month
Business loans are loans that are designed for businesses that need additional funding for their operations or expansion. The amount an owner or manager can borrow in a business loan depends on the financial performance of their business. The larger the scale of the operations is, the larger the amount of business loan they can borrow.
Business loans are generally long-term loans. This is because, for businesses, long-term loans are more advantageous because the lower their periodic due is, the more money they can spend on their business.
Most business loans are used to fund expansions and market research. This way, the business will be able to explore potential profits while taking less risk as possible.
Benefits Of Business Loans
- Business loans are easily accessible and convenient for a borrower
- This loan type is a short term loan used to solve a businesses’ cash flow problem
- Business loans are often approved faster compared to loans offered by banks.
- This loan type offers varying repayment options.
Foreigner loans are special types of loans that were designed for foreigners. According to statistics over the years, a significant amount of foreigners that opted to stay in the country to live permanently and work encountered financial difficulties during their transition period (first few years). And since access to financial assistance is very limited for foreigners, foreigner loans were introduced to help them in their financial needs.
Depending on the income of the foreigner, a foreigner can borrow up to 6x his monthly salary.
Benefits Of Foreigner Loans
- This loan type has a low-interest rate
- A borrower receives the required loan amount fast
- When applying for this loan type, the number of documentation needed in order for your loan to be approved is very minimal
- A borrower is not subjected to detailed credit records checks.
How to Apply for A Loan In Singapore
Applying for a loan in the country can be fairly simple and quick as long as you have the necessary documents such as valid ID, proof of residence, and original payslips of at least 3 months in their work.
For Raffles Credit, one of the leading licensed money lenders in the country, clients can receive a response within the hour of their contact. They have a website where clients can fill up the necessary information and their loan officers would then process the application immediately.
And within the next hour, their loan officer would contact the client about their possible loan options and give instructions on how they can proceed with the application.
Things to Remember Before Applying For a Loan
As a final tip, always remember that loans are financial obligations that you will have to pay in the future.
Thus, always make sure that you maximize your use of the loan proceeds. If it’s for an emergency, make sure that you use the proceeds to pay for the bills. On the other hand, if it’s for an investment, make sure that your investment will be worth more than the total loan payment plus interest in the future.
And lastly, in applying for a loan in Singapore, always check for the legitimacy of the moneylender. There are many crooks and legitimate scammers nowadays that can sweet-talk their way to you and cause further financial difficulties for you in the future.
Before signing that loan agreement, do your research about the money lender’s history and verify their legitimacy from the Ministry of Law’s website.