What you need to do and know after getting a loan approved

http://ifttt.com/images/no_image_card.png

Despite your best preparation; financial emergencies can hit you anytime. Thankfully, you can easily take a loan from licensed money lenders in Singapore to deal smartly with your emergency situation. While it could be easy to get your loan application approved, your responsibility starts right from the time you borrow money. As a financially wise person, you should take some necessary steps and know a few things after being granted a loan. Here’s a look.

Check how much they charged you for the loan approval

In Singapore, licensed money lenders are allowed to charge a loan approval fee. Your money lending company can deduct the amount upfront from your principal loan amount. However, there’s a cap on how much they can charge. As per law, the loan approval fee should not be more than 10 percent of the principal loan amount. That means, if you take a loan of $20,000, they can charge you up to $2000. Check this to make sure you received the right amount of loan from your lender.

Avoid late payments

Your money lending company can charge you up to $60 for each late monthly repayment. To avoid this penalty, make sure that you pay your monthly instalments well in time.

Collect receipts

If you are a sincere person, you are already doing this. Here’s a quick reminder. Whenever you repay in cash, be sure to collect the receipt duly signed by the reputable money lender. Also, check the receipt for any spelling mistakes. Check whether your name, date of repayment, and amount have been mentioned right in the receipt.

Keep your loan account statements handy

First, you should collect your loan account statement from your lender. In fact, your lender should send you all the details every 6 months. If did not receive the statement, be sure to contact your money lending company and collect the statement from them. Once you receive the statement, you should read the document thoroughly to check for any spelling or printing mistakes. It is also important to keep the documents handy for future use.

Know how to complain

If you borrow from an acclaimed moneylender in Singapore, you may not need to lodge a complaint. But it is always a good idea to know how to lodge a complaint if need be. In Singapore, all complaints against moneylenders are reviewed by the Registry. At this stage, they may want to talk to you face-to-face for more details. They may want to know about your loan transactions and your key concerns. There are strict laws to protect the rights of borrowers in Singapore. You can even take your case to the Small Claims Tribunal. It is also possible to take legal steps against a fraudulent moneylender under the Consumer Protection (Fair Trading) Act.

Know your legal rights, but also know that borrowing from a licensed moneylender in Singapore is safe. You just need to make sure you are borrowing from a reputable money lending company.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/26/what-you-need-to-do-and-know-after-getting-a-loan-approved/

via Financial Directory Singapore

Advertisements

2 things to know before you borrow from a moneylender 

https://www.financialdirectorysg.com/wp-content/uploads/2016/10/bigstock-Businesswoman-loans-money-in-o-120787040.jpg

Borrowing money is a big decision. Once you make up your mind for taking a loan, the next few steps are to decide how much to borrow, whether the repayment amount is well within your financial capability, and what would be the right repayment tenure for you. For better decision making, you should arm yourself with enough information. If you are borrowing from a licensed moneylender, here are two important things you should know.

How much you can borrow from a licensed moneylender

After knowing about some of the misconceptions about personal loans that has been circulating, the next thing to understand is that there are two types of loans – secured and unsecured. If you pledge any collateral for taking up a loan, it would be considered a secured loan. This means you have to put some of your assets, such as your car or your house in mortgage to the lender for getting approval to a secured loan. On the other hand, all loans taken without having to pledge any collateral fall in the category of unsecured loan.

For secured loans, there is no limit on the amount of money you can borrow. However, if you choose to take up an unsecured loan from a licensed money lender in Singapore, there could be a limit on how much you can borrow. It depends mainly on your annual income.

  • If you are currently earning up to $20,000 per year, you can borrow up to $3,000
  • If your annual income is between $20,000 and $30,000, you can borrow equivalent to your two months’ income.
  • If you are currently earning anywhere between $30,000 and $120,000 per year, you can borrow an amount equivalent to your four months’ income.
  • There is no cap on how much you can borrow if your annual income is $120,000 or more.

What service charges can they charge?

Earlier, moneylenders in Singapore were allowed to charge six different types of service charges. If you took a loan before September 30, 2015, that rule still applies for your loan. However, all loans taken after October 1, 2015, are bound by a new law, which says that licensed moneylenders can charge you only the following three types of service charges.

  • If you make a delay in paying your monthly instalment, they can charge you maximum $60 for each late monthly repayment.
  • They can also charge you a flat administrative fee at the time of loan approval. This fee should not be more than 10 percent of the principal loan amount.
  • If a moneylender files a claim for loan recovery and gets the claim approved by the court, they may charge you an amount for the costs they had to incur for legal proceedings.

Also, the total amount your moneylender can charge you must be less than the sum of interest paid, initial administrative fees, and late payment charges. For instance, if your total loan amount is $20000, your moneylender cannot charge you more than $20000 on account of interest rate, plus initial administrative fees, plus late payment charges.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/19/2-things-to-know-before-you-borrow-from-a-moneylender/

via Financial Directory Singapore

Top 5 tips on how to a get business loan in Singapore

https://www.financialdirectorysg.com/wp-content/uploads/2016/09/bigstock-Business-Loan-Business-Man-S-140400158.jpg

Cash is king in business. You need it for day-to-day operations, marketing, buying new equipment, or renovating your office building. If lack of fund holds you back from starting, running or expanding your business, you can consider taking a business loan. But wait, are you eligible for a business loan? How can you get approval for one? What are the things I should consider and know before taking the loan from a licensed money lender? Here are some useful tips on how to get a business loan in Singapore.

When was your company incorporated?

The age of your business is an important clue for the lender. Ideally, your company should be at least six months old. The older, the better. This is because more years in the business shows your stability. It is also a sign that your business is financially well-to-do. So consider running a business for more than six months, before applying for a business loan in Singapore. However, you can also apply for a startup loan – in which case, you do not need to have an established business. All you need is a good business plan and knowledge and experience in the relevant field.

Transactions in your corporate bank account

To increase your chances of getting a business loan in Singapore, you should make sure your company’s bank account is active and has a healthy transaction record. Money coming and going from your company’s bank account is a telltale sign that your business is operational and there is a good chance that such a business will be able to repay a loan.

Your company’s credit record

This is another very important factor to consider. Banks or moneylenders usually check with the Credit Bureau Singapore (CBS) to know about your credit history and current outstanding loans. As a business owner, you should maintain a good credit rating for your business. This will make it easy for you to get approval for a business loan when you actually need it. The lender usually checks whether you have a good repayment history and the total amount loan you currently have.

Number of bounced checks

Bounced checks are a red flag. If your moneylender comes to know that you have a history of more than three bounced checks in the past six months, they may be sceptical about your loan repayment capability. Sometimes returned checks are a result of poor planning. For instance, you could issue a check at an unnecessarily earlier date, without checking your bank balance. This type of mistake can be avoided with a little planning.

Where are you borrowing from?

Whether your loan application will be approved depends on whether you’re seeking the loan from a bank or a licensed moneylender. Contrary to a common misconception, the latter offers customised business loans at a low rate of interest. Borrowing from licensed moneylenders is also fast and convenient. All you need is to fill out an application form and submit all the necessary documents. A loan consultant will talk to you and quickly gain insight into you exact requirements. Then the consultant will recommend you some of the best loan solutions.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/14/top-5-tips-on-how-to-a-get-business-loan-in-singapore/

via Financial Directory Singapore

Signs that you’re dealing with an unlicensed moneylender

https://www.financialdirectorysg.com/wp-content/uploads/2016/09/bigstock-Unlicensed-101225117.jpg

Within the past year, more than 100 suspects have been arrested in Singapore for involvement in fraudulent money lending activities. There are instances where the borrower has been forced to repay more than 10 times the amount they borrowed. Illicit money lending has been a constant threat for this otherwise useful industry. Loan sharks tempt people in dire requirement of money to be partners in their activities like gambling abroad. When the borrowers are unable to pay up due to the unreasonable terms, they are harassed. This is exactly why you should avoid borrowing from any unlicensed moneylender and should always opt to borrow it from a licensed money lender. But how would you identify them? Here are some signs to watch out for.

How to identify an unlicensed moneylender?

First things first, check out the list of licensed moneylenders in Singapore. If don’t find it there, it could a warning sign to borrows. Also, check whether your lender is:

  • Asking for your SingPass password and ID. This could be to access confidential information and use it against you.
  • Talking in an abusive manner, or threatening you. It has been seen that loan sharks use other debtors’ numbers while making harassing calls.
  • Retaining the debtor’s NRIC card or personal documents like driving license or passport.
  • Asking you to sign on an incomplete/blank Note of Contract regarding the loan
  • Granting loans without providing you with a Note of Contract copy or without explaining the terms of the loan fully.
  • Approving a loan before receiving documents like salary slips and income tax assessments and your loan application form.
  • Retaining any amount of the principal.

If you notice any of these signs, report immediately to the Registry of Moneylenders with the necessary information.

Identifying advertisements from unlicensed lending companies

Licensed lenders can advertise only through the following channels.

  • Consumer directories in print media or on the internet
  • Company website
  • Advertisements placed inside the lender’s business premises, or on the exterior.

Watch out if a certain moneylender advertises elsewhere. Generally, unlicensed lenders have been found to send out flyers, text messages or emails informing you about their services. Report such companies.

Common SMS tactics

Effective from October 1, the cap on moneylenders’ interest rates is at 4% instead of 20%. This is for debtors with annual income below S$30,000. This law has encouraged unlicensed lenders to use SMS tactics to con borrowers. The attempt is to get prospective debtors to respond and deceive them into borrowing money illegally. Watch out for the following tactics.

  • You could receive a text message saying that the loan amount has been deposited to a certain account number and that you are liable for the loan.
  • You could receive a text message asking you for the amount of money you need, deliberately assuming that you did send a message asking for a loan.
  • Impersonation of licensed money lenders is also common in text messages.
  • Loan sharks also send text messages pretending to be a helpline that can help you get rid of harassment and consolidate the debt.

You could also be encouraged to respond to a number via call, text or WhatsApp to avail guaranteed approval. Watch out for any such signs.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/11/signs-that-youre-dealing-with-an-unlicensed-moneylender/

via Financial Directory Singapore

5 myths about credit score in Singapore debunked

https://www.financialdirectorysg.com/wp-content/uploads/2016/09/bigstock-Credit-Score-5429457.jpg

It is strange that most people living in Singapore, one of the world’s largest financial hubs, are often uninformed about credit score and not know the essential things to consider before getting a loan. When it comes to dealing with credit reports, people mostly manage with guesswork. And there are many misconceptions about credit scores. For instance, many people believe that bankruptcy can ruin their credit score once and for all. Here are some common myths surrounding credit score in Singapore.

Myth 1: That credit reports consist of credit score

Contrary to a common misconception, credit reports do not contain credit score. Many consumers believe that getting a free online copy of their credit report will also reveal their credit score. The truth, however, is that to get your FICO credit score, you have to shell out about $20. However, when loan applications are rejected or higher interest rates proposed, licensed moneylenders are required to provide you with a free copy of your score.

Myth 2: Personal details are included in the credit report

This is far from the truth, as only information pertaining to debt is included in the credit report. The report does contain your social security number and date of birth, but not your race, ethnicity, income, investments or criminal record. Also, the lender may not necessarily see whatever is visible to you on your credit report. Soft inquiries visible to you are not shared with creditors and hence credit score remains unaffected.

Myth 3: Your credit history abroad has an impact on credit rating in Singapore

There is no official exchange of credit data across the border. If as a foreigner, you have never borrowed money in Singapore; your credit rating will be CX, even if it was different in your native country. While in Singapore, your credit history and score will be compiled only with your first loan. However, a financial institution or bank can always check for credit reports from your native country.

Myth 4: Your credit score would be high if you have no credit history

No credit history is actually a drawback for your loan application, because the lender finds it difficult to judge your creditworthiness with any previous record. In such cases, they need to lend at their own risk. You will begin from a score of CX and will have a thin credit file. Having no credit history is slightly better than defaulting or being bankrupt but it does not equate to a good credit score. This is best seen in cases of home loans, where consumers with a credit score of CX do not receive full financing.

Myth 5: Checking credit reports frequently could affect your credit score

The truth is that you can safely view your credit reports as many times as you want, and it does not impact your credit score. However, when you allow a moneylender to access your credit reports, the hard enquiries done by them can hurt your credit score. If, however, you have been in talks with different lenders, credit agencies can gauge that and you will not lose your credit score. If your report has been looked up multiple times in a 30-day period, all the inquiries will be consolidated as one hard inquiry.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/06/5-myths-about-credit-score-in-singapore-debunked/

via Financial Directory Singapore

5 common misconceptions about personal loans

https://www.financialdirectorysg.com/wp-content/uploads/2016/09/bigstock-Personal-Loan-138650963.jpg

Getting a personal loan approved from banks can be more cumbersome than getting it approved from a licensed money lender. Banks approve loans only to borrowers with a good credit score, and they usually take a long to decide on a loan application. If you are planning to apply for a personal loan, you may want to know about misconceptions about this type of loans, so that you can make an informed decision. To know what the common misconceptions are, continue reading.

Personal loans are less expensive than credit cards

Before getting a loan, there are a few things that you need to consider. The credit card vs personal loan conundrum is in the minds of most borrowers. Many of them suppose that the repayment amount on a credit card is much higher than that on personal loans. However, borrowing smaller amounts of money for shorter periods on certain credit cards can prove less expensive. Moreover, personal loans charge 36% on bad credit, as opposed to credit cards that charge 24% to 30%. Personal loans are less expensive only when you decide to pay back the loan amount over a long period of time.

Banks are the best sources to take personal loans from

Contrary to some consumers’ perception, banks are not always the best place to get personal loans from. This is because the requirements for approving personal loans differ from bank to bank, depending on their financial strategy and risk appetite. They charge high interest rates to borrowers with a low credit score. A money lender company can be a much better choice because of its transparency with interest rates. Money lenders also make quick approvals and are not concerned about a marginally low credit score.

Personal loans do not help in debt

Many borrowers assume that getting a personal loan will only add to their present debt. This is not necessarily true, since, in situations like drops in market interest rates, existing loans can be refinanced. This can be done by getting a larger personal loan and paying off smaller loans. Debt consolidation can be a smart step because it helps to organise better and save considerable amounts of interest.

Personal loans can be taken before a major loan

If you’re planning to buy a house or a car, do not take a personal loan at least 3 months before applying for the bigger loan. This is because housing or car loans take into account the debt servicing ratio (DSR). This ratio calculates what portion of your income would go into paying the loan back, apart from repayment from other loans.

Bad credit weakens your chances of getting a personal loan

It is true that having a good credit score helps secure a personal loan at better interest rates. However, nowadays, bankruptcy or missing payments are not as much of a factor in loan approval as they used to be earlier. Borrowers with good credit utilisation ratios are likely to get their personal loans approved. Another idea is to have collateral since it will reduce the interest rate. Money lenders usually overlook credit rating for smaller loan amounts.

It is a bad idea to borrow more money than you require when taking a personal loan. This is because you will have to pay an effective interest rate of 9% for money that you don’t even need.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/04/5-common-misconceptions-about-personal-loans/

via Financial Directory Singapore

How to deal with a financial emergency

https://www.financialdirectorysg.com/wp-content/uploads/2016/09/bigstock-Dollars-and-coins-in-glass-jar-86925269.jpg

Any financial emergency is thoroughly upsetting. It can lead you into making gross financial errors, and all the panicking can take its toll on your health. However, know that such situations might not be all that serious, after all. You might have lost your job, but good planning can bail you out. There might have been an accident, or someone in the family could have gotten seriously ill, but the piling hospital bills can be met using a little assistance from a licensed moneylender. If you’re in such a situation or want to plan against one, read on to know how to deal with it.

Take stock of the emergency

Assess the situation and do not lose your composure. In order to rectify any financial mistake, you need to accept it in the first place. The reasons for your financial emergency could be a sudden fall in your income, an imprudent purchase, or a poor investment. It could also be an illness or an accident requiring costly treatment.

What expenses are your top priority?

It is true that some bills are has a higher priority than others. Gather all your bills and arrange them in decreasing order of immediate importance. You will also have to sideline certain expenses. Entertainment takes a backseat in the event of a financial emergency. The money you’re borrowing on a high-interest rate from your moneylender has to pay for rations, mortgages, house rent, and electricity bills, etc. You can cancel movie subscriptions and gym memberships for this period.

Call up your moneylender

It is no use to run away from or avoid people you owe money. In fact, the first thing you should do is call up and assure your creditors about making the payment as soon as you can. This also helps to negotiate the terms of the loan and lower the interest rate a little. If you know it in advance, it is recommended that you let your creditors know well before the emergency strikes. This is among the top tips in helping to get out of debt. The moneylender could even allow a delay in payment or programs making the payment process easy.

How to borrow more

This is not suggested in all case. However, if you can be moderate enough, credit cards with unused balance on them can be used to make payments on certain heads. The interest rate is a little high, but the terms of repayment and the approval periods are a big advantage.

Save up for emergency

Don’t wait for the emergency, instead, prepare for it in advance. There are many medical savings schemes that help Singaporeans save for medical emergencies. If you are self-employed, make sure that you are subscribed to one such saving scheme. Another place where you could deposit money as emergency funds is the Singapore Savings Bond. It offers a relatively low ROI (2.5%) but is different from an FD in that it permits monthly cash withdrawals.

from Financial Directory Singapore https://www.financialdirectorysg.com/2016/10/03/how-to-deal-with-a-financial-emergency/

via Financial Directory Singapore