The cost of living in Singapore has constantly been on the rise and with the job market so tight, many of us have found ourselves in debt. Especially if you have not been frugal with your expenses and saving money, you indefinitely need a loan. There are several directions you can go in under such a circumstance – you can ask your friends and family for a loan and pay them back as and when you can, you can go to bank or you can approach a licensed moneylender. Most of us take the route to the bank because banks have been slashing their rates with increasing competition in the financial market.
Is your annual income more than S$20,000?
To get a loan from a bank (at least at decent interest rates), more often than not Singaporean citizens and Permanent Residents must earn at least S$20,000 per annum. If you are a foreigner, it will make it more difficult to get a personal loan in Singapore because many banks do not offer personal loans to foreigners. Additionally, you may be required to earn a minimum of S$45,000 per annum to be eligible.
How much can you borrow?
Banks are very reluctant to offer personal loans to customers whose annual income does not exceed S$20,000 simply because personal loans are largely unsecured loans making them ‘high risk’ in nature. And if you throw your less than average annual income into the mix, you are seen as flight risk to them.
But let’s say your annual income does not touch the S$20,000 mark. In that case, moneylenders in Singapore can legally lend you up to S$3,000. On the other hand, if you earn more than S$20,000 per annum, they can offer you a loan up to 2X to 4X your salary.
What kind of loan can you expect from Moneylenders?
The lender policy varies between different lenders. For instance, some lenders can offer you more flexible personal loans when compared to others and can even be tailored to suit your financial requirements. The interest rates and the terms of your loan will help you distinguish between different moneylenders. The loan amount that you are eligible for can also depend on the repayment tenure that you choose.
How to choose a moneylender?
How do you choose the right top, the perfect bag or the best restaurant to dine in? You window shop and do your research until you find one that suits you and your wallet. That is exactly how you need to look for a moneylender as well. Shop around, speak with different customer service agents of different moneylenders you are interested in and pick one that offers you the best deal.
Beware of Scams
There are many online as well as offline moneylenders who are unlicensed and scammers that are just waiting to loot you out of your hard earned money. This is where your mad research skills will come into play. All licensed moneylenders in Singapore need to pass the ‘Moneylender’s Test’ conducted by the Registry of Moneylenders. Upon passing the test, if the Registry of Moneylenders deems the business fit for the moneylending industry, they will have to apply for the money lending license. You can find the complete list of licensed moneylenders on the official Ministry of Law website under “List of Licensed Moneylenders in Singapore”. Be careful when making a deal and make sure you are not being cheated. If the package offered to you is too good to be true, that may well be the case.
The upside to all this is that the government has come down heavily on such scam artists and have also heavily fined licensed moneylenders who employ similar techniques with expletive content and SMS sent out in bulk to Singaporeans.
So there you have it – don’t be disheartened if your bank loan application has been rejected. There are always other legal institutions such as licensed moneylenders you can approach for extra cash with security.