Questions You Should Ask Before Taking A Loan From Moneylenders
Financial emergencies can occur at any point in your life, and they have serious consequences when they do. Loans are the go-to option under such circumstances. You could either borrow from a bank or choose a money lender.
Most people prefer borrowing money from a lender when they require loans at short notice. There are several reasons for that, including faster approval time, no collaterals, and flexibility of the credit history.
However, you should always borrow money from a licensed lender like A1 Credit to avoid fraud or unwanted consequences. Borrowing from unlicensed lenders might cause you to lose your documents, compromise your safety, and even get into further debt.
But how can you know if an agency is licensed or not? What questions should you ask if this is your first time applying for loans? What are some red flags worth looking out for? Continue reading to find out.
Ques. How To Identify A Licensed Moneylender?
It is not difficult to identify a licensed lender, provided you know what to look for. For instance, you could check the Registry of Moneylenders list released by the Ministry of Singapore and whether the agency finds a mention in it.
Licensed agencies will acquaint you with the entire process and seek your approval before proceeding. They will not ask you for your password or sensitive information unless required.
Authentic lenders also operate from their physical offices or through their official websites. They avoid cold calls or contact you on social media platforms like Facebook, Instagram, or Twitter.
Ques. What Should You Check Before Taking A Loan?
Before you borrow money from a lender, knowing the various financial assistance schemes with low or no-interest rates is helpful. You should understand the language and technicalities of the contract and its terms and conditions and ensure the lender provides you with sufficient time to repay the amount.
Ques. Do Agencies Have A Borrowing Limit?
Most agencies have a specific limit on the money you can borrow. In most cases, they will let you borrow six times your monthly income if your income exceeds 20,000 SGD. However, the lender will let you borrow an amount exceeding your payment if you choose an unsecured loan (which comes with collateral).
The specific loan amount depends on factors like your eligibility, legal requirements, current income, and the type of loan. For example, personal loans range between 500 SGD to 50,000 SGD, while business loans have a borrowing limit between 10,000 SGD to 2,00,000 SGD.
Ques. Do Private Lenders Consider Your Credit History?
Most private lenders are pretty flexible regarding the credit history while giving a loan. Although they won’t reject your credit application because of a bad credit rating, they might consider other related factors like your income.
You can choose monthly installment loans with a low credit rating to repay the loans in the absence of high-interest rates. It is better to discuss your loan requirements with a specialist before making a decision.
Ques. What Is The Approval Waiting Period?
The exact waiting period varies from one agency to another, but some will approve your loans within an hour in most cases. The significantly less waiting time is one of the top reasons people prefer private lenders over banks. Licensed money lenders like A1 Credit offer you loans at short notice without a complicated approval process or a lengthy waiting period. But before borrowing money, you should check if the lenders have a license and provide the necessary information before proceeding.
She works as an editor at Research Snipers.
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