Nowadays, it is important that you have a ready cash in hand for any eventuality that may happen. Even if you try your best to save up and prepare for these eventualities, it may not always be enough considering the changing prices of services and commodities every month or quarter.
In Singapore, for instance, it is important to have enough funds to sustain the expensive quality of living in the country and other important payments that may spring up. In order to make up for their financial problems, they seek out personal loans to make up the funds they need.
Several facilities offer personal loans and they include banks, financial institutions and moneylenders. However, which firm should you go to when you really need the money?
Why Not Banks?
Since time in memorial, banks offer a variety of financial services for their clientele to fund whatever it is they need and this includes offering personal loans. However, banks are quite notorious when it comes to personal loans and here are the reasons why people who need instant cash avoid them:
- Tough Requirements
When you apply for personal loans in banks, you are expected to produce a lot of documentation that would reflect your capacity to pay. A majority of banks and lenders require potential borrowers to have a yearly income of at least $20,000 to $30,000 if they are employed or up to $40,000 if they are foreigners, self-employed workers or freelancers.
You must also show your income sources, from your employment details and the amount you make each month. It is uncertain as to what the minimum employment duration is when applying for personal loans in banks, but they do consider how long you have been working for the company or business. If you are self-employed or get your income from commissions, you need to show where these funds are coming from.
- Strict credit assessment
When you apply for a personal loan in banks, they will look at every aspect of your credit history to see if you are not a high-risk applicant. Your credit history will detail every financial activity you have every month or year. If you have late payments on your credit card bills, high credit card usage defaulted payments and closed accounts, everything is listed in your credit history. If you have defaulted payments and bankruptcies, it will be a black mark in your credit score and history and that may raise warning signals to banks.
Some banks would even go ask your family and friends to know more about you and see if you can be trusted with the loans.
- Amount You Can Loan
If you do pass the other requirements, you are only allowed to borrow a certain amount based on your income. If you are a self-employed individual or a business owner, your allowable personal loan amount can be lower than what you expect. Typically, personal loans through banks compute your allowable loan amount by checking your monthly income and multiplying it four times.
- A long duration of approval
Banks will take a long while to approve applications because they will comb your application to see if you will be a good client. As a result, you can’t depend on them when you need the money the next day.
If banks or financial institutions do not approve your loans or you have to wait for days or weeks to get your loans approved, you need another way to get funds in the quickest time.
Fortunately, the solution is simple and they are moneylenders.
Here are the reasons why they are best when it comes to instant cash loans:
- Minimum documents required
When you apply with moneylenders, they won’t ask you to submit a variety of papers that would prove your capacity to pay, your background history and other documentation. To apply, you simply need your NRIC card, income tax and CPF statements and you are ready to go.
- Online applications
In banks, you have to visit the branch to apply for a personal loan although there are some banks offering online applications.
For moneylenders, you simply have to apply online, wait for the call and head on to their branch for final details.
- Lenient credit assessment
Whether you have a good credit rating or bad credit rating, moneylenders would still accept your application. They will only check how much you earn to determine if you can be eligible for a loan.
When you apply for a personal loan with a moneylender, they can be very flexible when it comes to loan tenures and repayments. In banks, you are only allowed to borrow a certain amount and given a certain loan term for repayments.
- Fast approval
When you submit your requirements to them in their office once you are asked to come over to review the loan details, the moneylender will immediately print your contract and give you the money without questions asked. Some moneylenders will even approve your applications on the same day so you can get the money immediately.
While moneylenders can provide instant money once they approve your applications, there are some things you need to remember before you sign up with these groups.
- Personal loans from moneylenders are quite expensive when it comes to their interest rate. When you do fail to pay on time, you will need to pay a 4% interest rate aside from the late payment fee.
- Not all moneylenders in the country are approved by the government to offer personal loans. You can double check their credentials by checking the list at the Singapore Ministry of Law Website.
Before you check out moneylenders to get a personal loan for instant cash, it is ideal you do your research and pick the one that offers a loan that you can easily pay and have smaller interest rates. When you selected the moneylender that offers the best rates, apply online and speak to them about their terms and conditions. Make sure everything is in order before you sign up because once you sign up, the terms can be very hard to modify when you meet problems.