Why Should You Seek a Personal Loan in Singapore?

Your family’s financial security is the most important thing. However, your current economic assets may not match your ambitions. Do you want to carry out maintenance work on your home, pay for your children’s education, or buy a new car? Then, you will most likely need external financial help. Singapore is a safe, developed, and stable country. However, for many people, it is an expensive nation where unexpected expenses can be a significant economic burden. Want to invest in your personal development? Improve the lives of loved ones? Then, a personal loan in Singapore should be on your radar.

What is a personal loan? In a nutshell, it is a financial instrument through which you can obtain a predetermined amount, which you will have to repay within a timeframe that you have agreed upon with your lender. Typically in Singapore, these kinds of loans are mostly unsecured and involve amounts that can be repaid in a maximum of two years. Moreover, personal credits are characterized by flexibility and can be used for various investment or personal purposes, such as covering emergency expenses or even consolidating your existing debt.

Merging your existing credits can offer cost and time efficiency. Let’s say you have used the services of money lenders in the past, and you currently hold a loan with an interest rate of 3%, which you have to repay by the end of the year. Is your financial situation going through a rough patch? Then, through a personal unsecured loan, you could merge your existing credits into a single financial package with a more favourable interest rate. In other words, you will buy yourself time, which can be essential for turning your financial situation around.

When Should You Go for the Services of Private Lenders? 

For one thing, you should consider the professional services of money lenders if you are facing a bad financial situation and you need help with your expenses. Do you need emergency dental work, does your child need tuition money, or are you facing a home renovation problem? Then, a fast personal loan in Singapore may be what you require. Personal credits are flexible financial instruments that can be used to improve your economic situation, give you breathing room, and help you make investments in your future that, in time, translate into enhanced profits.

Why use private money lenders and not traditional banks? Accessibility. The financial services offered by private lenders are versatile, are easier to access than those of conventional banking institutions, and, thanks to the Moneylenders Act of 2009, are as well-regulated and involve as little risk as those of national financial organizations. Calling on private lenders is quick, involves less paperwork, and the eligibility criteria are lenient. In other words, private lenders are the go-to solution for most Singaporeans. So, their offerings have slowly but surely become synonymous with everyday living.

What Protections Do Borrowers Enjoy? 

Private financial entities, such as moneylenders, wishing to operate in Singapore are regulated by the MAS and must follow the regulations imposed by the Moneylender Act adopted in March 2009. What are these regulations? For one thing, the maximum interest rate charged by private lenders cannot exceed 4% per month. Moreover, the administration fee of the loan you obtain from private lenders cannot be more than 10% of the total value of the credit. What does this mean exactly?

Let’s say, for example, that you borrow SGD 10,000, which you have to repay in ten months. According to the regulations imposed by the Singaporean government, at the end of these ten months, the maximum amount you have to repay cannot legally exceed $15,000. This is in contrast to other countries, where the maximum interest rates for unsecured loans are less regulated. On top of that, private lenders in SG cannot impose penalties of more than SGD 60 per month on bad debtors.

There are also limits on the maximum amounts which can be borrowed. Are you interested in an unsecured personal loan? Then, the maximum amount you can borrow will depend on your annual income. The minimum salary you must have for an unsecured loan is SGD 10,000, while the maximum amount you can borrow cannot exceed the value of twelve monthly salaries. In other words, if you earn 10,000 SGD, you will not borrow above this sum unless you provide collaterals.

What Paperwork Is Needed for an Unsecured Loan? 

Applying for the financial services provided by private money lenders is more straightforward than that for the offerings of traditional banking institutions. However, you will nevertheless have to submit a number of documents imposed by the Moneylenders Act. What are these documents? Firstly, you will need to provide proof of your residency and show evidence of income. Your NRIC and a recent bank statement or payslip are usually sufficient. However, if you are self-employed, you may be required to provide a Notice of Assessment.

If you have been employed at your current workplace for less than six months, then the money lenders you are applying to may need an employment letter and bank statements for the last three or four months. Not least, you’ll be asked to fill out an application form and must provide residential proof, such as a recent utility bill. The approval process for the loan you are interested in should not take more than 48 hours. So, if everything is in order and the amount you need is approved, it should appear in your account in less than five business days.

A Flexible Choice for Responsible Individuals

The professional services of private money lenders have become common among Singaporeans for reasons that are easy to understand. Private lenders often offer more advantageous credit terms than traditional financial institutions, are transparent with the monetary policies applied, use online credit application platforms, and have diverse financial packages that are suitable for both people who need long-term loans and individuals who are looking for short-term credits until the next payday.

The Monetary Authority of Singapore regulates private lender activity, and penalties for financial breaches are severe. Risks are primarily associated with misestimating one’s financial capability to repay. Lenders’ offerings are legally required to be transparent and described in easy-to-understand terms. Moreover, the interest rates they can charge are limited to well below those of neighbouring countries. In other words, in Singapore, the government ensures the financial protection of its citizens, and the potential for fraud is low.

About the Author

Mashum Mollah is an entrepreneur, founder, and CEO at Blogmanagement.io, a blogger outreach agency that drives visibility and engagement. He blogs at Blogstellar.

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