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What You Need To Know Before Getting A Loan From A Money Lender

There’s a lot to find out and know before making that loan. Prior to writing this article I had my reservations and biased thoughts on the concept. I now realise that it is a means, that if managed well, could be more helpful, than detrimental. So take on these general rules and we’ll be fine.

Know your loan

This is by no means the best way out, so always consider alternatives before resorting to a moneylender. I know this sounds cliched, but there are financial assistance schemes available so this is not the road you have to absolutely take. Bear in mind that once you do though, you are obliged by the law to fulfil whatever the contract you have the moneylender entails. This is not just something you take down on your own, you put your family in jeopardy as well.

Forecast your needs

Just like currency exchange, different moneylenders have different rates and terms. Forecast your loan needs and compare rates before committing yourself to a loan. I know how this may sound ironic owing to the possible desperation and time of need, but do not rush into a loan until the terms and conditions are those you understand and can manage.

Understand how much

Loans are typically split into your secured and unsecured loans. Secured loans have no limit to how much you can borrow. For unsecured loans, an amount of up to 3,000SGD is approved if your salary per annum is less than 20,000SGD and any amount if your annual income is 120,000SGD or more. If your salary per annum is less than 30,000SGD, do take note that the interest rate is capped at 13% and 20% for secured and unsecured loans respectively.

Ensure legitimacy

Always make sure that you are borrowing from a licensed moneylender. A list of licensed moneylenders can be found by clicking here. The next obvious thing to note is when they start using profanities or vulgar language, that’s probably your cue to say no thanks. We’ve seen enough TV, you get the drill. They should also never withhold your personal document details or grant you a loan without giving you any note of the contract. Make sure you know and understand the full terms of the loan. As long as they’re licensed, it’s not all bad. Yet if you do come into contact with unlicensed moneylenders, report them to the Registry of Moneylenders.

Pay timely

This is quite the no brainer, but pay off your loan instalments in a timely fashion so you don’t rack up late payment fees or late interest rates that will bite you hard and painfully. To safeguard yourself, always keep a copy of the statement of account or any evidence of payment for documentation and verification if required.

There’s a unifying factor among people that need loans from a money lender; desperation. That desperation is driven by a senseless impulse to go through the first door that greets them, and get the loan. So here’s hoping, that this article gets in the way before getting through that first door.