With the economy picking up slowly but steadily for sure, banks and money lending institutions are kickstarting their lending business in an aggressive manner. Prior to the launch of the Do Not Call (DNC) Registry, most of us even we at Empire Global gets multiple calls from banks promoting all the different loans and throwing in all sorts of freebies to sweeten the deal.
You might have even received cheques that state a pre-approved loan amount and all you need is a phone call to the respective company. Well all these have been cut short and certainly much lesser seen now.
You might wonder why personal loan are effective for short term too? Let us tell you more.
There are many specific loan types Eg. Education loan, renovation loan, car loan. Unlike these categories of loans where the usage of funds is clearly defined, you get much more flexibility on the usage of spend with a personal loan. It’s a sum of cash that you can use it for any purpose. When you take up a car loan, its strictly meant for the purpose of financing a car. Furthermore, specific loan types are usually paid directly to the seller and you won’t have access to the physical cash on hand.
Coming up Short on Cash? Use a Personal Loan.
A Personal loan act as temprorary bridges if you are coming short on cash. For example, you are awaiting a home sale proceeds or pending an investment fund release of cash. These are uncertain periods of time whereby you might be short on cash. Personal loan are ideal for those who have temporary shortage on cash. Like a pending home property sale of their current apartment and not wanting to miss a good property in the market. A personal loan comes in greatly to make up for the shortage in cash-flow and offering reasonable interest rates.
Having said this, personal loan should be used with caution and not for luxury purchases and splurges. A personal loan like any other loan is to tide over a certain period of time for a certain cause and not for an individual to indulge which will result in large repayments if one is careless.
Another great example is that you can use this amount of cash flow to generate new funds . Then a personal loan is a great and convenient way to bridge this kind of short-term financial requirement.
Loan ceilings are typically large than payday loans. As payday loans ceiling largely depend on an individual salary income.
Some side advice if you are selling/buying a new apartment; use a cash cheque instead of credit cheque and ask for some benefits from the property agents. They would be more than happy to do so
Learn how to Be a Good Borrower
Personal loan come with slightly lower interest rates and unsecured nature provides a good way to teach someone to be a good borrower.
Fixed repayments each month makes the borrower repay a fixed a amount on the stipulated date. Furthermore, timely repayments of loans ensures that it maintains your good credit ratings.
Previously we mentioned on checking your own credit ratings with a $5 quick check in the Credit Bureau
Approval is fast as Always.
As with loans, personal loan are one of the fastest to be approved. Be it from banks or money lenders. This could prove to be an attractive offering for you if you need the loan amount fast. Time to be approved can be further discuss with the loan officers too. This is one of the highest request we get at Empire Global.
Get a Personal Loan If You Need One
Having mentioning some of the benefits of personal loans, they are only good if you don’t live beyond your means as it can be disastrous if you fall into a debt trap. We as moneylenders wouldn’t want that too!
Be confident and sure of your financial status. Ensure you repay back the repayments on time and you will be safe! Next up we will look at the Personal Data Protection Act and how it is shaking up the industry and why you should be aware of your rights.
Still stumped by interest rates of personal loan in SG? Need to get a personal loan in SG? Personal loans are at times referred to as unsecured loans which are personal loan without the need for security, collateral or guarantors. There are lots of personal loans providers which include banks and lending companies like us at Empire Global. So what are the few ways that one can get a personal loan in SG for fulfilling all your dreams and desires that you put on hold?
Understand first. Why you should care about Personal Loan rates?
Like we have explained previously, interest rates can get quite tricky and can slip pass the mind of borrowers. Borrowers might have gone on the urge of borrowing and forget to calculate the effective interest rates of the loan amount. One should fully understand the loan repayment amount and the effective interest rate of a loan sum. This will enable them to make better judgement of their own financial standings.
For example, if you plan on getting a renovation loan do look for a provider of renovation loan package instead of taking up a personal loan in SG. What’s the difference you may ask? It’s most advisable to go to the most specific loan type that you need. This usually results in a better interest rate or something better to match your needs. Why so? This allows lenders to “think less” about your repayment and the terms and conditions of a loan plan. The more specific you are with your money needs, the easier life the lender has.
There’s intense competition amongst lending institutions here, hence the interest rates, repayment policies and the many applicable terms and conditions vary greatly. So do shop around to find one that best suits your needs.
Check your own Credit Rating
One of the basic thing you can do prior to borrowing is to check your own credit rating. This is usually applicable to those who have defaulted on payment terms of bills, loans, credit cards or those declared bankrupt or cleared of bankruptcy.
If you have repaid properly, the credit rating should be good still. However if you are still servicing those payments, it is most advisable to check your credit rating and ensure that you are at least eligible to borrow.
What determines a Borrower’s eligibility?
If you are applying for a personal loan in SG, the biggest ranking factor to determine the loan amount a borrower is eligible for is their source of income. Typically in general, most banks will lend up to four times the amount a borrower earns on a monthly basis.
Get Personal Loan from Banks
There’s a big competition between the different banks providing personal loan services. Some have created apps for borrowers convience. A frontrunner in using technology for loan services is the new Dash Advance app created by Standard Charted providing personal loan in SG. This shows how competitive the industry is.
At times borrowing from banks can get tricky too. Why so? A simple thing like a late repayment penalty is often overlooked by borrowers. This is because no one wants to pay late. And this is where the institutions can play it up to their advantage. Mess up a repayment once and you just might get your interest rate increased . Late fees can be quite substantial too. It is totally unlike a credit card late fee of $50; the penalty might be much steeper.
When banks that you have shortlisted are offering comparable packages, you should next look at their penalty fees and administrative fees. Basically pick the lowest interest rate provider and if there’s a tie, pick the one with the less “painful” penalties.
A basic set of information is required such as your NRIC, income documents (CPF statements, income tax statements) should be readily at hand before approaching these institutions.
Get Personal loan from Licensed Money Lender
With major financial institutions providing personal loan in SG, there are another group which are the licensed money lenders providing an alternative for borrowers. With much lesser fine print and more straight forward loan application process, borrowing from licensed money lenders can at times be a wiser choice.
The loan process is much faster and usually hassle free. Interest rates are highly competitive too and some of the best options are their flexibility in repayment plans. You can talk to the loan officer to draft a repayment policy to best suit your needs. Approval rates are typically higher and at times you are able to receive the cash amounts in a day or two.
However as there are quite a few unscrupulous lenders out there, it is a necessity to have a copy of the contract or loan terms when you sign up for a loan. Avoid those that easily approve your loan application without any legal contract. You can also check the company’s license by visiting IPTO. Money lenders who violate the laws set upon have their license revoked almost immediately. This ensures that the licensed money lender industry is kept legit and safe.
Getting it right for a Personal Loan
As repayment periods are usually longer with personal loan in SG, one has to be careful in borrowing and be clear about financial repayments needed. Loaning money is not a way to cover luxurious lifestyle. Identify the loan package that best suits your current financials and the lender. The loan process can get frustrating and your application might even be rejected, but do be careful when applying for a personal loan in SG. Ask questions and clear as many doubts you may have before signing up for a personal loan in SG.
Not to forget, too many loan applications can ruin your credit and obliterate your chances of getting one in future as it affects your credit ratings. Having too many applications makes you look desperate or in financial difficulties. As a result, lenders will see you as a credit risk and less likely to approve you.
All these financial terms! Frustrated?
Getting a personal loan? Stumbled by the many jargons used by banks and money lenders? Heard of “Effective interest rates (EIR), Annual interest rate (AIR)” Well, let us at Empire Global take you through the many different terms used in personal loan and how you can get the appropriate loan type.
Rule of thumb: BE SMART and careful when you apply for a personal loan, you would not know when the interest rates hits you hard.
As money grows tight in a rapidly growing economy, people starts to take up loans for themselves. Personal loan, payday loans, home loans. However, it is often common that borrowers take up the wrong loan type for themselves or signed off a loan too early which they can’t repay well. Well, today we talk about personal loan and how you should really be careful about the terms spelt out.
What Borrowers Should Learn about Effective Interest Rates (EIR)?
As a borrower, one should be concerned about EIR for your personal loan. When analysing a loan, it can be difficult to get a clear idea of the loan’s true cost based on everything the bank provided.
There are several terms used to describe the interest rate, including effective rate, nominal rate, and more. Amongst all these, the effective interest rate (EIR) is perhaps the most useful, giving a relatively complete picture of the true cost of borrowing (which is why at times its seldom advertised too!)
To calculate the effective interest rate on a loan, you will need to understand the loan’s stated terms and perform a simple calculation. In short, effective interest rate attempts to describe the full cost of borrowing. It takes into account the effect of compounding interest which is usually left out of the nominal or “stated” interest rate.
For the mathematical inclined!
A typical case scenario is when you have a loan with 10 percent interest compounded monthly. But in face, it carries an interest rate higher than 10 percent, because more interest is accumulated each month.
Let’s Break Down Effective Interest Rate Further
1. Determine stated interest rate & number of compounding periods
Firstly, determine the interest rate that is quoted to you and the number of repayment periods. Stated (nominal) interest rate will be expressed as a percentage.
Compounding periods will typically be monthly, quarterly, annually, or continuously.
Stated interest rate = ___%
monthly = 12
quartely = 4
annually = 1
2. Making use of the Effective Interest Rate Formula
The effective interest rate is calculated through a simple formula: r = (1 + i/n) ^n -1.
r = effective interest rate
i = stated interest rate
n = number of compounding periods per year
3. Performing calculation of Effective Interest Rate
For example consider a loan with stated interest rate of 5% that is compounded monthly.
Based on the formula yields: r = (1 + 0.5 / 12)^12 – 1, or r = 5.12%
Another example if it was compounded daily.
Based on the formula yields: r = (1 + 0.5/365)^365 – 1, or r = 5.13%
Note: Effective interest rate will always be greater than the stated rate
Considering home loans? Read more on: http://www.stproperty.sg/articles-property/financial-guide/home-loans-how-to-compute-their-effective-and-nominal-interest-rates/a/119694
2 Main Factors to Check before getting a Personal Loan
Singapore has a huge range of banks and lending companies to choose from. It’s little wonder with the intense competition that personal loan interest rates sway greatly every time. Hence it’s best that you do your research and shop for the best persona loan at the time you need it.
One of the basic reason why interest rates fluctuate so much? Banks make money from charging interest rates. Depending on the popularity of personal loan in the market, they can charge lower or higher. You remember those free gifts and luggages when you sign up for a personal loan?
Well, that’s a marketing perk that banks try to get you to signup with their personal loan and take your attention off the high interest rate on offer.and banks can get desperate.
2. Show me the money
As a borrower you would want to pick a loan type to best suit your financials and repayment ability. Some companies will include additional fees such as processing fees, insurance fees which will unknowingly add to your total repayment.
Hence be a smart financial shopper. Be savvy about it. You want to borrow when the the banks are low on clients.
Enough of bank interest rates & terms!
There are many ways out of financial problems. All that is required is to seek professional advice from the right people. When you are shopping for a loan, be mindful of the different rates that a bank or institution quotes. Always ensure you understand which rates they are quoting and then compare the equivalent rates between alternatives.
These article is just an overview of effective interest rate. Look out for our next article when we go in-dept on personal loan and all the interest rates terms. Leverage on the proper loan by picking the one that suits you best for your situation. In short, do your research well!
Empire Global is a licensed money lending company in Singapore. We place great emphasis on dishing out proper financial advice to our customers before they sign on the dotted line.
Think World Cup makes you Rich? A look at Problem Gambling
Seen the problem gambling advertisement by Singapore? It has gone completely viral and people from the USA has seen the ad. Most of us at Empire Global are glad we supported Germany! Some of us have won quite a bit. Of course we bet from licensed source – Singapore Pools.
And who could forget dynamo Germany win over Argentina in the World Cup finals! 1-0 and that sealed the deal for the campaign.
Here’s the ad done to resolve problem gambling
Problem Gambling in Singapore
We probably should have heeded Andy’s dad advice to support Germany isn’t it? With Germany’s win over Brazil (7-1 trashing), our hearts wished we had bet big on Germany. Wouldn’t you?
Although the memes and the jokes that people made over the ad made Singapore famous indirectly but the underlying message is important. Which is why the government agency will not yank the advert out from our tv viewing commercials.
With the increase takedown on illegal gambling dens and illegal moneylenders, it shows that Singapore is taking a strong stand on illegal activities.
Read more on: Singapore cracks down on illegal gambling dens
Borrowing Legally and Illegally
With World Cup this year, moneylenders has seen a spike in customers who are borrowing. Some of them had gambled heavily on underground gambling dens and needed financial assistance immediately. Some had turned to loansharks to borrow to pay off their debts. We speak to such customers every so often and at times we had to turn them down too.
The benefits and low risks involved for borrowing from legal lenders far outweigh those of illegal lenders. Harassments, high interest rates, SMS spam are the things you would want to avoid when you want to take up a loan.
Read more on: Why borrow from Licensed Moneylenders
Financial institutions and legal moneylenders have regulatory compliances and legit licenses to provide personal loan. Furthermore, with Budget 2014 there are new changes to the moneylending industries. Tighter rules and regulations are being carried out with more crackdowns on moneylenders who fail to compile within the rules. Moneylending licenses are getting lesser too. Which means those licensed moneylenders you see now are pretty much doing a great job.
Moneylending rules are under review which was announced during the World Cup period. Borrowers would have better financial education and interest rate caps. We expect this will be done across the board soon and the stop to new licenses for moneylenders since 2012 goes only to show that the government would only want good moneylenders to remain in the industry
Read more on: Moneylending review this World Cup
Getting a Personal Loan
You may need a sum of money urgently and you have exhausted all avenues to look for. This is when people turn to licensed moneylenders as it offers a form of unsecured debt financing solution. A Personal loan might be a good choice to look at. Plus moneylenders are able to release funds on a shorter term notice.
Personal loan issued by moneylenders are unsecured meaning that you don’t have to vouch so strictly for your credit rating or income as opposed to by banks and other financial agencies. However by saying so, ensure that you are borrowing from a licensed moneylender or else you might end up in debt with extremely high interest rates.
Most of the time, one will need to handle a stack of paper work and provide assurance to lenders in order to receive a personal loans. Whereas with moneylenders, this step is greatly simplified. You would not need to have a perfect credit rating or high salary to cover the personal loan.
Read more: Personal Loans Information Guide
5 Important Considerations before getting Personal Loan
1. Have you thought of all other alternatives before approaching a licensed moneylender? Do you have reserve funds somewhere? This is because personal loans bring another form of debt towards your financials.
2. Personal loan contracts are legal and borrowers are to ensure that they are able to meet the repayment terms and contract requirements. Ensure that you are able to meet the repayments set out and double check in on your financials before signing on the contract.
3. Borrow only what you need and what you can repay. Do a financial calculation of your outstanding debts, income and expenses. Gauge your debt servicing ratio, and borrow only what you can mange with. This is to avoid unwanted interest repayments.
4. Ensure that moneylenders or financial officers explain the financial and legal terms that are bounded in the contract. ALWAYS be sure that you know and understand the personal loan contract term. For personal loans, keep in mind the basics which is repayment period, repayment schedule, interest rates and other fees that could be incurred.
5. Be sure of yourself that you have made an informed decision about taking a personal loan from a licensed moneylender. Go with a licensed moneylender that you are comfortable with. Check their reviews online and compare them. Do not rush to take up a personal loan. Do through research for yourself.
At the End of the day
Regardless of whether you are borrowing from banks or licensed moneylenders, ensure that you have done adequate research and comparison on the loan contracts.
Personal loan are contracts made between you and the lender, understand the legal terms and the repayment contract that is set out. Caculate the interest rates and the repayment amount for the full loan term to ensure that you are borrowing within your limits.
Stay tuned as we bring more articles on personal loans and how it affects you. We look into interest rates offered by banks and the many financial terms and buzz words commonly exchanged between them to confuse borrowers.
Empire Global is a licensed money lending company in Singapore. We place great emphasis on dishing out proper financial advice to our customers before they sign on the dotted line.
Here’s the new ad done by NCPG to save themselves. Some find it a good one. Some not so. You have the final say.
According to an article published on The Straits Times on 1 August 2013, Singaporeans are loading up more and more on debts and many are taking up multiple loans.
This is also made evident in the Yearbook of Statistics Singapore 2013; it shows that the number of pledges received at pawnshops and the numbers of loans have shot up significantly between the years 2011-2013. Obviously, this has shown that Singaporeans may have difficulty in managing debts and require help to manage debts.
As it’s becoming easier to apply for credit options such as credit cards, credit lines and loans, the number of young adults running into debts are increasing as well.
6 Tips to Manage Debts Better
So how should you ensure that you don’t end up being buried under a mountain of debt?
Here is a simple video by Institute of Financial Literarcy that shows us how you can learn to manage debts, and some take-away pointers from us at Empire Global SG.
1.) Don’t take up loans that you Cannot Afford
Before you get too excited about taking up a loan for your new Porsche or Ferrari, please bear this in mind – higher debts equals higher repayment terms which leads to lesser ready cash for your other expenses.
As a general rule of thumb, your total monthly servicable should not exceed 35% of your gross income. This is to ensure that you will be able to repay the loan with ease and not create a pit-hole for your future.
2.) Be interested in interest rates
Is it true that you should take a package with a lower interest rate? If you agree with that statement, you are probably paying more interest than necessary.
Effective interest rates reflect the true cost of taking up the loan as it takes into consideration the frequency and amount of the repayments.
This could means that although you are servicing a smaller amount of monthly repayments but you are actually paying more than one who pays a larger monthly amount.
Advertised interest rates on the other hand, are typically nominal rates, which have not taken the amount of loan and period of repayment into consideration.
Therefore, next time when you are offer an attractive loan rate, do not be too hasty to take up yet.
Ask the bank for the effective interest rates as well; calculate the exact amount that you need to repay after taking into consideration the amount of loan and the frequency of repayments before you decide whether to take up the loan.
Hence, if you are keen to manage debts, make sure you have adequate knowledge in the different interest rates and be very clear of what you are landing yourself into!
3.) Read Everything before signing anything
Unless you are a superstar who needs to autograph for 5000 fans within 2 hours, take time to study the contract carefully. Understand your rights and obligations before you sign.
If in doubt, question every term and jargon that you don’t understand. Know that you are the customer and have the right to know every detail thoroughly from the service providers.
Once you have signed on the contract, you are legally bound to the terms and conditions stated.
To manage debts well, do not make the common mistake that most people do when taking up a loan deal. Not reading the fine print!
4.) Don’t Borrow to Pay a Debt. Ever.
We cannot stress on this point any further – Never Ever Borrow to Pay a Debt. Do this in order to manage debts better!
If you need to borrow to pay for a debt, it shows that you are already having problems to manage debts.
Stop before you dig yourself into another hole! Look at some of the Stupidest Ways Singaporeans Deal With Debts and don’t follow in their footsteps.
If you think you can manage debts yourself, by doing so, you are totally wrong. Wouldn’t it be worse to have one more debtor coming after you for repayment?
Here are some steps from MoneySense to help you understand how you can become debt-free as soon as possible.
5.) Stay on track with the big picture
Are you getting confused over the different debts that you have? Are you unsure of what debts you are paying for every month and when are the repayments going to end?
To manage debts well, come up with a spreadsheet to have a better overview of the outstanding debts. It will also help you to prioritise which debt you should repay first.
As a general rule, you should always pay off the debt with the highest interest rates such as credit card debts.
This helpful infographic will show you 5 tips to save yourself from the credit card debts.
6.) Consolidate and save
Are you suffocating from the different debts that you need to repay every month? Perhaps it’s time for you to speak to your lender on the repayment terms.
Trust us; the situation will just get worse if you try to avoid payments. Have a good control over your financial situation; ensure that you do not have too many late repayments to prevent incurring more interest.
Your lender may be able to help you to restructure the loan. After all, all lenders would want their money back.
Don’t try to avoid your lender just because you are having problems with the repayments. Be open to them. Ask for help.
At the end of the day, the best way to prevent you from getting unhealthy with debts is to be able to manage debts well. Understanding your needs and wants, be able to differentiate between the two.
Focus on your priorities in life. Understand your needs and reduce on your wants, you will naturally be able to reduce your debts.
Before taking up a loan or swiping your credit cards for your next purchases. You should look at your monthly income, expenses and budget them accordingly.
Do you have the capability to support that new purchase? Ask yourself the questions before committing.
Therefore, as much as possible, we should try our best to manage debts before it gone badly and enjoy our lives within our own means.
If you can only remember one point, just remember this – Spend within your limits and plan wisely. Speak to the friendly loan officers at Empire Global SG for advice and assistance if you need further information.
In our fast-paced society and growing needs, it has become a stage whereby most people would have debts. Be it a home loan, mortgage, personal loan, car loan or credit card bills. Most importantly, one should pay off one’s debt as soon as possible to avoid incurring unknown expenses. It will save you lots of hassle and money in the future.
It is important to understand that getting into debt is a major responsibility. Too much debt can easily get us into trouble. Ask yourself the following questions before making a commitment to borrowing.
6 Big Questions before Borrowing & getting into Debt.
1. Do I really need it in the first place?
Many a times we tend to buy things we do not need. Getting the latest iPhone? Getting new clothes because of an event? A growing number of people are now buying things that they don’t really need, but due to the people around them or society itself we make the purchase on the item. We love ‘the thing’, hence we need ‘the thing’. Sounds familiar?
Many of our purchases are due to our inability to resist the temptation for instant gratification. We are turning into a first buy, and then pay for it later lifestyle; without knowing whether we can earn that money in future! Be very careful of instalment plans on purchases. It’s easy to underestimate the small weekly payments as it can add up to a whole lot more. Avoid being rash in purchase decisions and check the terms and conditions of any such instalment policy.
Start simple. Assess whether the purchase decision is a need or a want. Determine whether if it’s something that you can wait. Then save up for it and make the purchase later. Buy when you need it, not when you want it.
2. Is there another way I can pay for my items?
Sometimes, there are subsidies and grants for items. Some of the easiest way to pay for a new item is to sell an old one. At least this reduces your purchase price of the item or even make a profit out of your sale.
Try making a bargain on your purchase items or check out online marketplaces for cheap deals and second-hand purchases. Many a times, we seldom need items that are brand new. Pre-loved items are currently in trend now as it sharply marked down from its usual price.
Stretch your dollar on your purchases. Singaporeans are embracing the second-hand market and its a fast booming economy.
3. I already have other monthly expenses. Can I still afford it?
Track your budget. Use a budget tracking app or even an excel spreadsheet to understand your financial standing. See how much you have left after your monthly expenses, borrowings and savings. Look at the amount at the end of the day and determine whether it is still advisable to buy it or to put off the purchase.
Here’s a quick video on managing your debt in Singapore.
4. How much should I borrow?
Always try to make a larger downpayment that you can afford or go with a repayment policy that is bigger and shorter within your means. Go for loan plans that can be paid off earlier than the set period so as to avoid incurring further interest on your debt.
Borrowings should always be kept within the repayment limits; too much or too little can be restricting in their own way.
5. How much do i have to pay every month?
To keep your financial status healthy, you should not fork out more than 35% of your gross income on your total debt that you have.
6. How long will it take to pay off my loan?
The longer a loan period is, the more you end up paying. Ask for a comparison of loan tenures across different loan packages that loan companies offer. Look for the interest rates and cumulative interest rates as this will help you in making an informed choice to decide on a comfortable repayment period for your debt.
Ask the loan officers for a manageable repayment period within your means. Understand the different undertaking of each loan types from them too. Payday loans, personal loans, housing loan or even renovation loans are different terms that a loan officer will use. Choose one that best suits your situation.
The whole point here, is that we don’t think much about long-term aspects of our spending and hence make bad financial decisions that land us into debt. Always spend within your means.
Ask yourself repeatedly; Do i need this? Can I afford this? How can I pay for it?
Know your own financial ability and borrow the minimum you need. All these will allow you to have a peace of mind and be financially sound. And finally, always be prepared for life’s “What if’s”. Have emergency savings to fall back on to cover against life’s ups and downs.
- Instalment plans add up to a whole lot more
- Money Book for you
- Spoiled Tweens want instant gratification
Singapore — Followers and friendship is cheap. Recent article on the May 11, Sunday Times 2014 showcasing the bloggers community in Singapore. Highlighting that there is an increasing number of people buying “likes” on Facebook, Instagram and other social platforms. People have been boosting their online popularity by paying for “likes”, retweets and followers. All these for a small price. True? Totally.
Now there are modern bots who are very good at emulating human interactions and these are developed by service providers who all want to earn from a person’s or company’s ego. Some companies are known to using these providers to give them an edge in the market.
“Stronger” social community means the company has some good PR with the customers right? Well, don’t be too easily deceived by it. Having higher numbers of ‘Likes‘ or ‘Followers‘ does not necessary tell you anything about the person or business. Believable? Up to you.
Moneylenders giving a bad name to themselves
It has come to a concern that in our community of licensed moneylenders, there are an increasing number of companies using link networks and providers. Unlicensed moneylenders or some legit lenders even, have used similar offerings to promote their website. All these are done in order to attract and achieve more sales for the company. However, most of the services provided by them are like just to close sales and increase loans take up rate rather then sincerely there to provide good services and advice.
Some of these loan information are grabbed from other websites that are not even relevance to Singapore. Marketing firms have been arguing about this practise stating that these providers are providing dishonest means to convince their customers.
Paid articles or blogs to popular bloggers made by moneylender firms are increasingly misleading and the competition is heating up. With strict laws made by the government, some moneylenders are now using these methods to give themselves good online reputation.
As consumers, always do your research and check out the reality of the information and accuracy. With the internet providing vast amounts of information, it’s now much easier to make your choice. Look out for legit reviews and always check out the competition.
Online popularity the right way
Our practise as legit moneylenders, we want to provide sound advice to borrowers. We understand the borrowers mindset, that they want quick solutions to solve their financial woes. This is why we have heavily emphasized on the “what to avoids” inborrowing.
We want to the educate the borrowers first and provide the most updated information to them.
Therefore, do not be shy to pick up the phone and call the licensed moneylenders and enquire for more details before taking up a loan. Pay a visit to the moneylenders office and find out more information and ensure they are legit and sincere loan providers before signing on any loan document.
Doing all the necessary checks and finding out more information do not only ensure you are borrowing from the right source but also ensure you get the best available loan as well as the right loan package that you are able to service and solve your financial difficulties during tough times.
Singapore — Unlicensed moneylending services have been creating issues for long in Singapore and recently efforts have been ramped up to deal with such occurrences.
Although with additional efforts to handle unlicensed moneylenders, there has been a debate to make moneylending from such lenders a crime. This is done in order to further reduce moneylending harassment issues.
Head of Unlicensed Moneylending Strikeforce, Superintendent of Police Aileen Yap mentioned in an article on ChannelNewsAsia 11 Oct “Singapore has zero tolerance for unlicensed moneylending activities resulting in harassment acts that threaten the safety and security of our community.”
The benefits of borrowing from licensed moneylenders have long been accepted by the community at large. This is shown by the thriving popularity of legit moneylenders setting up shops in the neighbourhood. People have grown to accept such licensed moneylenders which set themselves aside from illegal lenders as they provide a form of legit lending services for those in need. The increased supply due to rising cost of living have led to people turning to such businesses to apply for personal loans.
Avoid the bad stuff early!
Avoid harassment methods by properly borrowing from legit moneylenders. In Singapore, moneylenders have to adhere to strict policy of different moneylending laws laid out by the government and if lenders fail to abide to one, they will face harsh punishments such as fines or revoking of lender’s license.
More professional licensed moneylenders would also advise borrowers on a feasible repayment scheme which they can manage their money properly.
Avoid extremely high interest rates met out by unlicensed moneylenders. Moneylenders are licensed by the “Registrar of Moneylenders” in Singapore, meaning there’s restrictions in place on the different fees, maximum interest rates they can make and the maximum amount they can lend out.
With the new rules mentioned in this year Budget 2014, tighter control over licensed moneylenders shows the government interest in this business and ensure it does not go beyond control.
Avoid SMS spam from illegal moneylenders tempting you to borrow from them. Licensed money lenders are by law not allowed to tele market or send advertisements via SMSes to potential customers. One can report them to IPT as they have violated the personal DNC act and moneylenders act.
Avoid illegal means of people obtaining your personal information. Bad moneylenders have been touted to use one’s personal Singpass login details to obtain personal information. This piece of information can be wrongfully used. Hence legal lenders will only do Singpass verification checks when one is obtaining a loan at the office. This is usually to check on your previous salary to issue you the appropriate loans that one can service.
Borrowing from moneylenders. What’s better?
On the whole, it’s much better that borrowing is not criminalized, but addressed through educating people on borrowing from different sources.
Loan advisers are now equipped with proper knowledge to dish out proper loans to borrowers. They are usually trained by licensed moneylending firms and they adhere greatly to the rules enacted towards the company.
By borrowing from legit licensed moneylenders, they offer short term payday loans and personal loans that ease up one’s financial burden. Aside from that, it is better knowing that these businesses have a regulatory compliance and legit licenses to provide loans.
This form of security is a huge advantage as compared to borrowing from unlicensed ones. One can save their own trouble and borrow from legal providers instead.
Singapore – If you have been researching and comparing credit card cash advances and payday loans, you might get confused between their various offerings.
Credit card companies are stiffening up the competition as they compete amongst themselves and the different moneylenders to offer fast cash loans to people.
Getting loans is easy in Singapore with different schemes for different package offerings. Banks, licensed moneylenders and a variant of loan companies all offer a type of loan for different consumers. So let’s narrow down to the loan types of payday loans and credit card cash advances.
Let’s look at payday loans
Basically, when you are looking for personal loans in general, you might have seen different terms used interchangeably; payday loans, personal loan, cash advance, fast loan. In this article we make reference to payday loans which is part of a personal loan type.
The definition of a payday loan – A payday loan is referred to as a short-term loan that allows a person to take up a loan amount based on their salary. There’s a minimum monthly income cap depending on the moneylender rules and borrowers who have a much higher verifiable income salary would be able to borrow more money.
Payday loans (also called “payday advances” and “personal loans”) are a subset of unsecured loans, meaning there is no collaterals needed. Payday loans are granted based on your income and are tailored to the borrower’s ability to pay back in a certain timeframe. Sometimes payday loans can be paid back in multiple split payments, but are required to pay back the entire amount with the agreed interest.
Licensed moneylenders provide payday loans and the interest rates may vary accordingly. One of the greatest advantages of payday loans would be negotiable or adjustable repayment plans. This will greatly help you in terms of money management as one can better plan their finances.
Another great advance that legit moneylenders offer are simple policies on their rates. Only an interest rate is charged on your loan amount with zero hidden charges.
What about credit card cash advances?
Credit card cash advance is based on your available credit limit on a credit card rather than your monthly income. A credit card cash advance is generally treated like a purchase made with a credit card and the repayment terms are strict.
A cash advance on a credit card may or may not offer you a better deal than a payday loan depending on your own credit ratings and whether you are credit qualified. Some credit card companies charge higher interest on cash advances as compared to payday loans offered by moneylenders.
Cash advance loans comes with your monthly credit card bills and are to be repaid accordingly. Interest is compounded daily and they require a substantial application fee when you request for a loan.
There are hidden charges on loan amounts which could be transaction fees, late payment fees, card fees, withdrawal fees, setup fees, bank service fees which the borrower might not be aware of.
To make matters even worse, many credit card companies require you to pay off any existing non-cash-advance balance (the normal purchase you make) that you might be having on your card. This means that they force you to pay up the amount with lower interest rate first, while the cash advance balance remains untouched, with the amount owed increasing and compounding interest.
Ever received a “credit card cheques” from credit card companies in your mailbox? Cheques offering a big lump sum to you? This is one of the biggest misconceptions faced by people. These “cheques” are treated as credit card cash advances by credit companies and it comes with all the accompanying disadvantages. People will feel it’s easy credit, but not realizing the multiple charges on such a loan.
In Singapore, credit companies cap the maximum loan amount based on their credit limits. Cash advances charge hefty interest or finance charges from day one of the loan till the day payment is made in full.
They do have their advantages, whereby the borrower can withdraw cash at the credit company’s ATM or request for loans to be transferred to the borrower’s own bank account. Some offer loan application via phone (cash-on-call) or SMS.
As a rule of thumb, hefty charges can be avoided if you pay the full amount on your credit card statement every month. Ask your card issuer to explain how interest is computed and to provide you with a case study loan amount.
Comparison and Outcome. Choose Wisely.
So what’s the best course of action for a borrower? At times, payday loans could have higher interest rates than credit card cash advances. This is due to moneylenders face higher risks of not being repaid.
However, if you have been a repeat customer with a great history of prompt repayment, licensed moneylenders would usually offer a better rate or repayment policy for you. You could also discuss with the loan officers and they will advise on a repayment plan for you.
Payday loans offer great flexibility in terms of repayment policy and if repayment time periods are a consideration for you, you are much better of with payday loans. Payday loans also offer no hidden charges and allow lower-income people who cannot get a credit card to take up a loan.
Choose wisely based on your loan requirements and make the right choice for you. Regardless of which loan offering you are after, do your research wisely, check reviews and check out the competitors.
Should you require better advice or have any doubts on loan offerings, feel free to drop a message to us or a phone call and our friendly loan officer will service you.
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