Sometimes, personal finances need a boost that allows us to make ends meet smoothly or continue with our dreams without financial hardship. Borrowing is for that.
The steps to obtain a loan in Singapore are very simple. Not only because you can order it online, but also because you don’t have to worry about anything else once requested.
Do you need liquidity to buy an asset, but you don’t have all the necessary capital available or you don’t want to affect your savings? The answer is a personal loan. A solution that more and more people and families are choosing.
The reason for requesting a loan varies according to age, but what encourages each question is the growth of the opportunities made available by the consumer loan. For anyone who needs help realizing their dreams or needs, here is a list of useful tips to know before applying for a loan or borrowing.
Tip 1: Compare the loan offers from different credit companies in Singapore
For a long time, Some credit companies set the tone for lending. However, legal money lenders that can only be reached via the Internet or by telephone and that do not have an expensive branch network are on the advance. The cost advantage is also reflected in the conditions for your loan. A fact that you should take advantage of. Even small differences in interest rates have an effect, especially with higher investment sums with longer terms. Over a term of 5 years, with corresponding loan amounts, differences of 0.5 percent can quickly add up to a four-digit amount. You can often apply for personal loans from direct credit companies online.
Tip 2: Calculate the free household income
Before you take out a loan, you should calculate exactly what monthly burden you can bear without difficulty. Determine your monthly income and expenses. Subtract your expenses from income. How to find out what amount you have freely available each month. However, do not put all of your free income into the loan installment, but also think about sufficient financial leeway for unforeseen expenses. Realistically estimate what amount you can raise each month before taking out a loan.
Tip 3: What are the requirements to apply for it?
Each credit company in Singapore adopts its strategy and rules regarding the granting of loans but, in general, personal loans can be requested by the public, state, and private employees, by retirees and self-employed workers, who are between the ages of 18 and 75 years (end date of the loan).
Tip 4: What documents do I have to present to obtain it?
Nothing simpler. To obtain the loan, simply present to the credit company in Singapore: a valid identity card; tax code or health care; last paycheck, single model or single certification, or last pension slip.
Tip 5: The more flexible, the better
When comparing the offers, do not only pay attention to the APR. This is important because it represents the total cost of the loan. In the case of similar interest rates, other contractual modalities, such as free special repayments, must also be observed. For example, using unexpected funds such as tax refunds, inheritances, or bonuses to repay faster can reduce the overall cost of the loan. Some banks even waive the compensation for special repayments. You can also increase the installments to pay off the loan faster. Are you now getting more money every month thanks to a raise in salary, a part-time job, or by returning to work after parental leave? Put the financial plus in your loan. In this way, you can pay off your debts faster and save interest. Information about a personal loan is available here.
Tip 6: When is the loan refused?
This question cannot be answered unequivocally but, in general, the loan is denied in the presence of doubt on the actual ability of the debtor to repay the requested sum. Other elements that can lead to the refusal of the request are the presence of a large number of existing loans; registration in the public register of protesters or the presence of unpaid overdue installments and other negativities in private databases (SIC); excessive incidence of the installments on the income received.
Tip 7: Which items should you pay particular attention to in the contract?
First of all, you need to pay attention to the items related to management costs and interests. Also pay attention to the exact amount disbursed, the amount of each installment, the payment date, and the expiry and termination dates of the loan. Without forgetting to be well informed about the guarantees required.
Tip 8: Speaking of interest: what are TAN and APR?
These are two calculation parameters that make it possible to develop the value of the installments to be repaid, representing the cost indices of the loan. When a loan is requested, TAN (Annual Nominal Rate) and APR (Annual Effective Global Interest Rate) allow you to evaluate its convenience: the first represents the annual interest rate applied to the financed capital; the second is the percentage indicator of the overall cost of the loan (includes the costs applied for opening and managing the loan).
Tip 9: Look for a loan that gives you special repayment rights
With special repayments, you are free of debt faster – a noticeable relief in times of crisis, when debt servicing threatens to become an obstacle. If you can repay loan financing in economically sound phases, you create security for yourself. It makes sense to look for loans that contain a special repayment right from a credit company in Singapore. The latter enables repayment outside of the agreed installments.
Tip 10: Are there forms of loan protection?
At the time of signing the loan agreement, it is possible to associate an optional insurance policy to protect the credit. This coverage can protect the applicant, based on his working status and the basis of the specific conditions of the policy, in the event of events that compromise his ability to repay the amount due.
Tip 11: Once the loan has been obtained, what happens if I miss the payment of one or more installments?
In the event of non-payment, inaccurate or delayed payment, the credit company is obliged to report a bad payer in the databases consulted by the same during the assessment of the customer’s creditworthiness and contributed during the amortization of the loan request. The provider may also request reimbursement of expenses incurred for any postal or telephone reminders, any home interventions, and/or legal fees incurred by the same.