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What Is A Bad Credit Loan

Living abroad does not have to disqualify you from getting financing. A bad credit loan is an option for those living in Singapore, who are unable to get financing through a traditional bank. There are advantages and disadvantages of seeking financing through this type of lender.

In Singapore, money lenders are licensed by the Registry of Moneylenders and must adhere to strict government regulations. Anyone seeking this type of financing should be aware of the conditions of the loan, including the interest rate and monthly repayment terms.

Usually, income is the determinant of the maximum interest that can be charged. For those making less than $30,000, the maximum interest rate for a secured loan is 13% and for a secured loan, 20%. This does not apply for those with incomes of $30,000 or greater.

There are additional fees the money lender can charge. One fee is for the original loan. Another may apply if the terms of the loan are altered. Fees for returned bank checks or for automatic bank drafts that do not clear are also allowed. Legal fees for collecting on a nonpayment of the loan and for early termination of the loan may also apply.

Those who are considering a bad credit loan should consider the terms and interest rates, to determine if the repayment terms are within the budget. This should be done before signing any loan agreement. Various registered money lenders may also charge different rates, so it may be advisable to shop around when possible.

To help people avoid financial distress of repaying a loan, there are additional maximum limits set, which are based on income. For those making up to $20,000, the maximum is $3,000. Between $20,000 and $30,000, the maximum is 2 months salary. For those making between $30,000 and $120,000, the maximum is 4 months salary. Those making more than $120,000 annually may be able to borrow a much higher amount.

A bad credit loan can be an option for those facing a temporary financial dilemma. It is not enough to finance a home, though it may help for those facing housing emergencies, who need to find a new apartment quickly. It is also a viable option for unforeseen car repairs or for other emergencies.

There are government programs available for those who need to borrow money. Often people can make use of those before considering a money lender. However, if they do not apply or are not available, a money lender can help. The key to getting the right loan is considering how much you can afford to pay back monthly and to borrow only as much as you need to cover the emergency expenses.

Keep in mind that the maximum interest rates are the most you will pay. Many registered lenders offer competitive rates. Only choose a lender that is on the registry list. Avoid doing business with companies that demand to keep personal identification and documents. Read all the fine print before signing loan documents, and take time to compare rates. Getting a bad credit loan in Singapore is possible and can be a good experience, when you do so wisely.