These days, making ends meet and keeping businesses afloat has become more of a burden. Thus, it is inevitable for most people to run short or be tight on the budget whatever their situation may be. This proves how much loans are beneficial to sudden bills and other financial emergencies. The only problem is, ensuring you’re availing a plan, that is legal.
What Is a Legal Loan Anyway and What Are the Benefits of Borrowing from Licensed Financial Institutions?
In Singapore, it’s said to be a microloan that borrowers may explore between two paychecks. Once you run out of cash, you can use this program to resolve your cash obligations. Lenders provide money on-demand wherein borrowers would have to eventually repay the loan plus its interest on or before its due, which could be your next income payday.
Here, we have listed reasons why you should get a loan from a legal money lender:
- Quick process and approvals. It can be noted that the usual borrowing procedure could be time-consuming, with all the visits and endless document submissions. If you are in need of instant cash, money lenders can accommodate you. Unlike conventional facilities, you will not be required to visit a lending office personal which means you can avail of a loan online or via phone call.
- Minimum lending requirements. With most legal or licensed money lenders, you need not provide a bunch of documents or requirements to grant your loan application. Normally, you just need to provide your bank details and your proof of income. However, you should be at least 21 years old and over.
- Affordability. Although not all lenders are alike, you can guarantee low-interest deals are available to cater to your financial worries. Especially, because, lenders must abide by the rules of the Ministry of Law, which declares that institutions cannot charge your loans with rates over what the guidelines set.
Where Should You Borrow Money in Singapore?
- Banks – While there is a wide selection of borrowing deals one can choose from in Singapore, many may not be aware there are actual banks offering low-interest rates in personal loans for short-term loans. Some of these institutions include Citibank, Standard Chartered, DBS, and POSB.
- Licensed money lenders – If you’re in dire need of instant cash wherein you do not have to gather multiple requirements to apply, you can easily check the list of legal lenders in Singapore that are under the Ministry of Law online to avoid potential problems in the future.
How Can I Know If a Moneylender Is Licensed?
To allow individuals to verify that a moneylender is indeed licensed, the Ministry of Law has compiled a list of licensed moneylenders in Singapore which you can find here.
Moneylenders are also prohibited from soliciting loans via text messages or phone calls, so if you are approached to obtain loans in these manners, it is likely that the moneylender may be unlicensed.
Licensed moneylenders may advertise their business only through:
- Business or consumer directories in print and online media;
- Internet websites belonging to the licensee; and
- Advertisements placed within, or on the exterior (e.g. side of the wall, door shutter, gate or window) of the approved place of business.
What Are the Types of Loans One Can Borrow from Licensed Money Lenders?
There are two major types of loans, secured and unsecured loans. As the name implies, unsecured loans have no collateral backing, thus, requires no security. Once a borrower defaults on this type of loan, the lender must initiate a lawsuit to collect what is owed.
With this, lenders will issue funds based only on the borrower’s creditworthiness and promise to repay. On the other hand, secured loans are wherein the borrower puts up their assets as collateral for the deal. With this, the lender can use the asset to repay the funds it has advanced the borrower.
Moreover, these are the kinds of loans people can apply from most lenders in Singapore:
Personal Loan & Foreigner Loan
In Singapore, this deal does not require borrowers to provide any collateral such as a house, car, or other possible assets to avail of deals. It is approved only based on creditworthiness, which depends on your credit score, monthly or annual income, repayment history, employer reputation, etc.
It can be used for multiple purposes, like meeting expenses of a medical emergency, travel, house renovation, as well as debt consolidation, etc which comes with flexible tenure either for the short term or long term.
| Features | Banks | Moneylenders |
| Loan amount | Up to 10x monthly salary | Up to 6x monthly salary |
| Interest rate | From nearly 4% p.a. | Up to 4% per month |
| Repayment period | Up to 5 years | Up to 12 months subject to the terms & conditions of the agreement |
| Application approval | A few days | Within 30 minutes |
| Eligibility | Must be 21 years old and have a minimum annual income of $30,000 for citizens and permanent residents and $40,000 for foreigners | Must be 21 years old with a minimum annual income of $24,000 for citizens and permanent residents and $36,000 for foreigners |
| Typical requirements | For citizens and PR: NRIC, proof of income, and proof of residence.
For foreigners: Passport, work permit, proof of residence, income, and employment letter In general, banks have higher requirements for you to qualify. |
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Payday Loan
Payday loans are short-term loans that can help you cover immediate cash needs until you get your next paycheck. These are typically due within two weeks—or close to your next payday. It functions differently than personal and other typical deals. Depending on where you live, you can get a payday loan through a physical branch with a payday lender.
Moreover, accessing a payday loan is convenient as borrowers only need to meet a few basic requirements, which includes a stable source of income. As long as the income is consistent, you are almost guaranteed to find a willing lender.
As the name indicates, in a Payday Loan, you can borrow up to one month’s worth of your salary to help with your short-term financial issues and repay it back on your next paycheck.
| Features | Moneylenders |
| Loan amount | Up to 1 month of your salary |
| Interest rate | Up to 4% per month |
| Repayment period | Within a month or on the next payday |
| Application approval | Within 30 minutes |
| Eligibility | Must be 21 years old with a minimum annual income of $24,000 for citizens and permanent residents and $36,000 for foreigners |
| Typical requirements | For citizens and PR: NRIC, proof of income, and proof of residence.
For foreigners: Passport, work permit, proof of residence, income, and employment letter |
Monthly loan
Similar to payday loans, this type of deal is on a term-basis. If you want to find a way to pay for your home improvements, vacations, or even pay back your car loans, this can still be the right service for you. Monthly loans are likely to offer you stability when you have a tight budget.
| Features | Moneylenders |
| Loan amount | Up to 6x monthly salary |
| Interest rate | Up to 4% per month |
| Repayment period | Up to 12 months subject to the terms and conditions of the agreement |
| Application approval | Within 30 minutes |
| Eligibility | Must be 21 years old with a minimum annual income of $24,000 for citizens and permanent residents and $36,000 for foreigners |
| Typical requirements | For citizens and PR: NRIC, proof of income, and proof of residence.
For foreigners: Passport, work permit, proof of residence, income, and employment letter |
Business Loan
Given, as the name suggests, this type of package is something you can avail in meeting urgent needs for your growing business or ventures. These are welcome for start-ups and small businesses are corporate entities.
If their commercial activities indicate their earning and growth potential, banks will quickly rally behind them. On the other hand, CEOs and sole proprietors with bad credit can always seek help from a licensed lender, who can then offer them up to S $200,000 payable within a year.
| Features | Banks | Moneylenders |
| Loan amount | Up to $500,000 | Up to $200,000 |
| Interest rate | From nearly 12% p.a. | Up to 15% per month |
| Repayment period | Up to 5 years | Up to 2 years subject to the terms & conditions of the agreement |
| Application approval | A few days | Within 30 minutes |
| Eligibility |
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| Typical requirements | NRIC of all business partners, profile, income tax notice, financial statement, utility bills, tenancy agreement, etc.
Banks may require a guarantor. |
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Bridging Loan
Bridging loans are specially designed for Singaporeans who want to purchase a new property, like a house or flat, but need to borrow additional capital to fund the purchase. These loans can help you bridge a financial or working capital gap when upgrading or moving home.
| Features | Banks | Moneylenders |
| Loan amount | 15- 20% of the purchase price of your new home | Up to 6x monthly salary |
| Interest rate | 5-6% p.a. | Up to 4% per month |
| Repayment period | Up to 6 months | Until your house completion date |
| Application approval | A few days | Within 30 minutes |
| Eligibility | N/A |
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| Typical requirements | NRIC, copy of the OTP, proof of residence, and income | |
Assurance you will get when you borrow from legal lenders:
- Reasonable rates. Given that all licensed moneylenders abide by the rules of the Ministry of Law, it is guaranteed institutions cannot charge your loans with rates over what the guidelines set.
- Fast approval. Unlike banks, with most lenders, you can quickly get what you have applied for. More often than not, you can easily have your loan approved after thirty minutes.
- Safe and transparent. As it is reminded by these legal lenders in Singapore, they only do their business according to the law and regulation set by the Ministry of Law. This ensures all transactions are secured and transparent with written terms.
- Flexible requirement. Unlike other institutions, one can be conveniently offered service with enough information from your personal documents for the application.
How to Find the Best Loan?
- Where can I borrow money in Singapore and where do I find good terms?
You can always check for the full list from the registry of moneylenders from Singapore’s Ministry of Law, just in case you would want to be sure. There, you also have the liberty to choose which ones best suit your financial dilemmas. - You can look for loan comparison sites that offer free quotes.
There are tons of reliable comparison sites offering at least three or more quotes online! This is an ideal way of ensuring your loan application will be beneficial for you. You can also guarantee that these websites are effective and transparent, which means all your personal information and details are secured.
- Use a loan calculator. With this tool, you can simply enter the loan amount, term, and interest rate to determine your monthly payment. This can save so much time and cash because you are able to prepare for your bills on or before it is due.
- You can try availing A1 Credit’s loan packages for quick approvals! You can get personal loan for foreigners, SME business loan, payday loan, bridging loan for house owners, as well as personal loan in Singapore services from A1 Credit, which is one of the most dependable legal moneylenders in Singapore. It practices full transparency and follows all the rules set by the Ministry of Law while providing fair relationships with customers.
To apply, you can walk-in or call via 6336 0833 or online! You will be given preliminary questions to determine your eligibility and will be invited to the office after. Then, you will be required to present your documents for verification and agreement signing. Once the contract is settled, you can receive your money on the spot, hassle-free!
