Financial emergencies can happen at any point in your life, and when they do, the consequences are dire. Loans are the first choice in such cases. You can either take out a loan from a bank or go to a money lender.
Most people prefer to borrow money from a lender when they need short-term credit. There are several reasons for this, including faster approval times, no collateral, and credit history flexibility.
However, you should always borrow money from a licensed lender A1 credit to avoid fraud or unwanted consequences. Borrowing from unlicensed lenders can result in you losing your documents, jeopardizing your security and even getting into further debt.
But how do you know if an agency is licensed or not? What questions should you ask when applying for a loan for the first time? Which red flags are worth paying attention to? Read on to find out.
queue How do I identify a licensed moneylender?
Identifying a licensed lender is not difficult provided you know what to look for. For example, you can check the list of moneylenders published by the Singapore Ministry and see if there is a mention of the agency.
Licensed agencies will familiarize you with the entire process and get your approval before proceeding. They will not ask you for your password or sensitive information unless it is necessary.
Authentic lenders also work from their physical offices or through their official websites. They avoid cold calling or contacting you on social media platforms like Facebook, Instagram or Twitter.
queue What should you check before taking out a loan?
Before borrowing money from a lender, it helps to understand the different financing programs with low or no interest rates. You should understand the language and technical details of the contract and its terms and conditions and make sure that the lender gives you enough time to repay the amount.
queue Do agencies have a credit limit?
Most agencies have a certain limit on the money you can borrow. In most cases, if your income exceeds SGD 20,000, you will borrow six times your monthly income. However, the lender will let you borrow an amount that exceeds your payment if you opt for an unsecured loan (which comes with collateral).
The actual loan amount depends on factors such as your eligibility, legal requirements, current income and the type of loan. For example, personal loans are between SGD 500 and SGD 50,000, while business loans have a credit limit between SGD 10,000 and SGD 2,00,000.
queue Do Private Lenders Consider Your Credit History?
Most private lenders are quite flexible in terms of creditworthiness when lending. While they won’t deny your loan application because of bad credit, they might consider other related factors like your income.
You can choose low credit monthly installment loans to repay the loans without high interest rates. It is better to discuss your credit needs with a specialist before making a decision.
queue What is the waiting time for approval?
The exact waiting time varies from one agency to another, but some will approve your loans within an hour in most cases. The significantly shorter waiting time is one of the main reasons why people prefer private lenders to banks. Licensed moneylenders like A1 credit offer you short-term loans without complicated approval processes or long waiting times. Before you borrow money, however, you should check whether the lenders are licensed and provide the necessary information before proceeding.
She works as an editor at Research Snipers.