When looking for a money loan, we all know how important it is to research interest rates from numerous lenders thoroughly. What else should one keep an eye out for when one takes a loan?
In this blog, we’ll delve deeper into the subject of money loans to assist you in choosing the ideal loan for your needs, as well as the measures you must take.
What is a money loan in Singapore?
A money loan is an unsecured loan that you may utilize for basically anything. You may use it to fund a medical condition, assist pay for any additional expenditures on a family vacation, or add quite so much sparkle to your wedding.
Money loans may also be an excellent strategy to increase your cash flow to overcome a short-term financial emergency. For example, if you owe a credit card debt and are being charged at least 24 percent interest per year, consider repaying it completely with a money loan, which has a lower interest rate. You can utilize a money loan Singapore as you choose, but don’t take this freedom lightly.
However, you should never take out a money loan to renovate your house. Banks provide specialized loans, such as a loan for home remodelling or an education loan, that generally have lower rates or restrictions than money loans.
Take a moment to read about money loan Singapore or what to do if and when you need them.
Here are the top seven considerations Singaporeans should make while seeking a money loan in Singapore:
How much can you borrow?
Banks examine numerous criteria when determining a borrowing limit, including your connection with the bank, the credit score, and, most significantly, your income per month. You can borrow between 2 and 6 times your monthly salary, up to a maximum of $200,000. There is generally a dollar limitation as well. What if you require a substantial loan? Some banks will lend you up to eight or ten times your monthly salary, but these larger loans are often given to customers with higher incomes.
How do I interpret the Interest Rate?
When talking about money loan Singapore, it’s unavoidable that you’ll come across the phrases Applied Interest Rate (AIR) and Effective Interest Rate (EIR). Which one should you consider when selecting which type of loan to take out?
AIR implies the loan principle remains constant during the loan term and ignores the reality that each payment reduces the principal amount.
If you make on-time payments, the EIR represents the real cost of borrowing. It is computed after taking into account the progressive reduction in principle during the loan’s term. Ensure to assess EIR based on the same loan amount and duration.
Do you fulfill the criteria for a Money Loan?
Singaporeans, Permanent Residents, and foreigners are all eligible to apply for a money loan. However, the criteria differ. If your yearly income is less than $20,000, you are unsuitable for a money loan. If you are a Singaporean or even a Permanent Resident, you should earn at least $20,000 per year.
However, if your annual salary is between $20,000 and $30,000, any loan you apply for will have a higher interest than Singaporeans and PRs earning $30,000 or more. Foreigners must earn roughly $40,000 annually to be qualified for a money loan.
How long will a money loan last?
Revolving loans should be utilized as a last alternative. With such high-interest rates, such as in an emergency where you can’t use a credit card, and you know you’ll be able to make the repayments as soon as possible. A revolving loan should not be used for long-term repayment. Term loans can last anywhere from 1-7 years. The longer the period, the cheaper your monthly payments will be, and the more interest you would owe.
Which charges should you acquaint yourself with before borrowing a money loan in Singapore?
When considering a money loan in Singapore, you need to consider more than just the interest rate. Other fees exist, and the following are a few to be aware of:
Annual fees: Several banks charge a predetermined amount each year in addition to the amount of interest you must pay. A five-year loan, therefore, might end in five-yearly fees!
Late payment fees:
If you skip any installments or pay less than the specified payback amount by the due date, you may have to face a late payment fee. This needs extra attention because lenders can be quite harsh when it comes to delayed payments.
Change in tenancy fee:
While not all banks provide this flexibility, after successfully qualifying for a money loan with a two-year payback period, but due to changes in your circumstances, the monthly payment is now more than you can handle. It would prove convenient if you could extend the payback time for a charge.
When should you expect to receive the funds?
For several borrowers, time is of the essence. When will your loan be authorized, and when will the cash be sent into your bank account? It varies greatly from lender to lender. Therefore it is critical to understand before applying. Filing using MyInfo or compiling your papers will also assist in expediting the processing of your application.
When you apply for an OnlineCredit Money Loan, cash may be sent virtually instantly into your Standard Chartered Current/Cheque & Save Account or any existing bank account of your choice within 15 minutes of your loan being accepted.
Will you be able to afford repayments?
When it comes to repaying money loans in Singapore, most banks will estimate your loan limit depending on your monthly income, but this may not be the amount you require. You must examine and estimate different expenses, such as the monthly installment on the money loan, how much do I need and can afford to return each month, and whether the remaining amount is adequate for your daily needs.
Regardless of why you want a money loan, make sure you read the tiny print and completely grasp the repayment specifics depending on your loan amount and duration. Allow us to assist you in catering to your loan commitments on time!
Find out more on OnlineCredit.