Borrowing from a licensed money lender Singapore is one assured and direct route to getting loans quickly. However, you should borrow responsibly.
Sudden, unplanned expenses or the need for more money than what you have to accomplish something most of us have been in such situations, and quite frankly, borrowing can save a life.
But, while borrowing is useful, it is again a big responsibility. So, if you need to take loans from licensed money lenders, you must know how to do it responsibly and avoid the common pitfalls.
Borrow From a Licensed Moneylender Singapore
Borrowing only from licensed moneylenders is your first step toward lending responsibly. The government of Singapore has some rigorous rules to protect borrowers like you. Still, unlicensed moneylenders or loan sharks operate outside the law and can lead to harassment or other issues.
Therefore, check the Ministry of Law’s list of licensed moneylenders to ensure a lender is legit.
Understand Your Loan Options
Know what you are getting into before you write your name and sign on that dotted line. For instance, find out how much the interest rate is and how much the fees will be.
Essentially, in Singapore, licensed moneylenders are not allowed to charge you more than 4% a month in interest, whatever the amount you borrow. In addition, late fees have a ceiling to keep you from an uncontrollable debt. To understand all these, read between the lines and ask questions where you don’t understand.
Only Borrow What You Need
This is one of the most complicated rules, especially when the lender offers you more money than you need. While taking more than you need is tempting, remember that every dollar borrowed costs interest.
There, ask yourself whether you need this much. Then, in your mind, precisely structure how the loan will fit within your budget. Only borrow as much as you need and how confident you feel you can pay it off without straining to make payments.
Know Your Repayment Plan
Speaking of repayment, do not take out any loan without planning. The licensed moneylender must explain the repayment modes you shall follow, such as monthly installments due on a specific date.
Importantly, when planning to borrow and repay a loan, always compare your income and expenses to ascertain that you can pay the loan on time and as agreed in the contract. Always remember any delay in payment attracts a penalty, costing a loan more than it was. Notably, during loan repayment, keep a record of all payments made.
Avoid Multiple Loans
One of the biggest mistakes borrowers make is taking out multiple loans simultaneously. It might feel like you’re solving a short-term problem, but juggling various repayments can quickly become overwhelming.
Therefore, think twice before borrowing again if you already manage one loan. Always focus on clearing your existing debt before taking on more.
Communicate
Life happens, and you might find yourself in a bit of trouble paying off your loan. If so, this is not a time to freak out, but rather the perfect time to speak with your money lender.
Money lenders in Singapore are generally pretty open to discussing whether to relax one or two conditions. They are usually more willing to prolong the repayment period. If your financial circumstances are getting worse and you are straining to repay the loan, don’t keep it to yourself. Be open and frank about your situation.
Know Your Rights
Know your rights as a borrower. Accredited money lenders in Singapore are subject to strict regulations, such as avoiding abusive language or threatening behavior to recover debt.
Therefore, if instinctively it doesn’t feel right, report them to the Registry of Moneylenders. Your financial well-being is just not worth compromising on.
Conclusion
Making the right and informed decision when borrowing from a licensed money lender Singapore is all about your money and future. Therefore, always consider the process and borrow responsibly to meet your financial needs and avoid unnecessary stress.