In Singapore, the long-term financial security of our loved ones is often intertwined with the monetary resources we have at our disposal. Maybe you are a hard-working individual and over time you took measures in order to be prepared for external events outside of your control. However, the truth is that most of us are always one step away from facing situations that risk affecting the long-term development prospects of our family.
Do you have high ambitions that are currently tempered by your cash resources? Are you looking to invest in your children’s educational pursuits, or perhaps delve into new avenues of monetary development? In that case, like most of our country’s citizens, you are probably considering a personal loan, and therefore, you will need to pay special attention when comparing the personal loans available in Singapore. Personal, unsecured loans are no longer just financial instruments that one can use for purchasing goods and services for subjective purposes.
Personal, unsecured loans can be utilized to consolidate your existing debt into a singular monthly repayment, are a great choice if you require an urgent cash infusion for home renovation purposes, can cover unexpected medical expenses and, of course, are also suitable if you require a vacation and you need help paying for it. When it comes to a personal loan, the keyword we are most talking about is flexibility. If you prefer in-person support nearby, working with a licensed money lender in Bedok can help you understand repayment terms clearly and choose a loan amount that fits your budget. Secured or unsecured, available from private lenders or from conventional banks, personal credits are the most popular financial instruments available in our country. That said, there are a lot of options to choose from, so it will be crucial to pay special attention when comparing the personal loans available in Singapore.
What Are the Benefits of Personal Credits Compared to Other Financial Packages?
In short? Their flexibility. A medium-length personal loan represents a versatile financial instrument that, unlike other types of credit, doesn’t usually require collateral, as long as your credit score is satisfactory and your monthly income and TDSR fall in line with the framework laid out by the Singaporean government. Practically, there is no real limit on how you can utilize the sum borrowed with the aid of a personal unsecured loan. Do you want to fund a new purchase? Then, you can do so. Are you looking to quit your job and travel the world as a juggling artist? Not recommended, but theoretically, a personal credit will allow you to do this.
Unlike home or car loans, in which you often guarantee the sum you borrow with your purchase, in a personal loan, collateral is rarely necessary, as long as you borrow less than six times your monthly income. The interest rates of these financial packages are more advantageous than those of payday loans and also, the approval and disbursement times associated with them are short, especially when talking about the financial offers presented by private lenders. Typically, with a personal credit, your application should be reviewed and approved/rejected in less than 48 hours, and the whole process will be fully online.
What About the Eligibility Conditions?
One of the biggest benefits of a personal loan, especially when provided by a private lender, is the flexible eligibility criteria of these credit packages. Pretty much any Singaporean citizen, PR, or even foreigner can obtain a personal, unsecured loan in Singapore, as long as they’re at least 21 years old, can present proof of ongoing income and earn, per month, a sum that falls in line with the minimum income thresholds imposed by the Ministry of Law. What wage are we talking about?
Well, according to the terms presented on the MLAW website, in order to qualify for a personal loan in our country, you need to have an annual minimum income of at least $10,000. This will allow you to borrow up to S$3,000. Do you earn more than $20,000? Do you have a monthly wage that’s in line with the median values for an SG full-time worker? In such a scenario, you could be permitted to borrow up to six times your monthly income. That said, this minimum S$10,000 threshold is just a technicality. In reality, most private lenders would expect you to have a minimum income that surpasses S$20k and a credit score with a probability of default of less than 0.5%.
What Are the Protections for Borrowers?
Comparing the personal loans available from the 153 private lenders active in our country will always be a good idea, as the offers you’ll find will most likely differ slightly between financial agencies. However, one thing to know is that, irrespective of loan conditions or repayment terms, in SG, there are strict limits for the maximum interest rates and administration fees chargeable for commercialized financial services. Private money lenders cannot impose an interest rate that’s more than 4% of the loan principal. Nor can they charge more than 10% as an administration fee.
On top of that, the maximum loan amounts are regulated via the framework laid out by the Ministry of Law, and the activity of private lenders is supervised via the specifications of the Moneylenders Act of 2008. Lenders in our country must be transparent with the overall terms of their commercialized loan packages, cannot utilize aggressive measures, like repeated calls in order to collect debts, can only become licensed via the processes laid out by the Ministry of Law, and cannot legally impose hidden fees beyond what’s clearly presented in the terms of the contract.
Yes, comparing the personal loans available in our country and provided by private lenders will always be a good idea. That said, no matter who you choose, you could rest assured that your rights as a borrower will be respected and that you will not have any hidden surprises in the fine print of the contract you sign. Singapore strictly limits the legal framework of private lenders, and the end result is better competitiveness and more advantageous offers for borrowers.
