Unfortunately, economic mishaps have transformed into a reality of our times. Since you are reading this post it is safe to assume you are an ambitious individual with a clear plan for your family’s financial development. Yet, whether we like it or not, the fruition of our plans is often intertwined with the cash reserves we have at our disposal. Singapore is one of the most well-developed countries in the world. In fact, it is often ranked number one when it comes to the quality of life and the development of the infrastructure network in Asia.Â
However, it is also an expensive place to live in, and it’s very possible that, at some point, your ambitions and overall well-being will require the external help provided either by a conventional bank or, more likely, by a private lender. Are you contemplating applying for a personal loan in Singapore? Well, you wouldn’t be the only one. This type of financial aid package has significantly risen in popularity in recent years, and for good reasons.
A Safe Financial Aid Package Designed for The Masses
In Singapore, the maximum personal loan interest rate applicable by banks or private lenders is limited by law. Moreover, lenders in our country must respect strict guidelines in order to obtain their official operating license.
In other words, compared to other nations, Singapore takes the security of borrowers seriously, and the authorities in our country are quick to crack down on those lenders who practice actions that go against the interests of their clients. That’s why there are only 153 licensed lenders allowed to operate here. So, if it is one country in the world, in which taking a personal loan can transform into a safe investment, that country is Singapore.Â
What Are the More Common Reasons for Investing in a Personal Loan?Â
More often than not, a medium-length personal loan is utilised as a means to gain access to fast funds, with minimum documentation required, and pretty much no questions asked. Do you need capital for a time-sensitive business investment? In that case, regardless of the personal loan interest rate, an unsecured loan with a respectable repayment duration can prove to be a wise investment. Traditional banks usually take weeks in order to process loan applications, and it’s very possible that at the very end of this waiting period, your request will be denied.Â
The keyword when it comes to private lenders is speed. Yes, in some instances, the personal loan interest rate offered by a bank will be slightly superior. But lenders are more lenient with the conditions of their credits, and instead of taking a couple of weeks to go over your application, in most cases, their positive or negative response will come in a maximum of 48 hours.
Sure, the waiting times are not set in stone, and delays can and sometimes do intervene due to external issues or more documentation required. But as a general rule, if you want fast money and you can’t wait for the response of a conventional bank, private lenders are the people who can provide you with the capital necessary for the continuation of your activities.
Sometimes, Obtaining A Conventional Loan Is Difficult
Most people need to deal with something like this at least once in life. You require fast money, with no question asked, and unfortunately, you find out that you don’t meet the minimum requirement for the financial influx you were waiting for. Conventional banks are ruthless when it comes to the lending conditions for commercialised credits. They could, for example, ask for a strong credit history, a high annual income, or collateral, all of which are things that you might not have at the moment.
The same is true if you are an SME and you are looking to obtain financing in order to expand your business operations and hire new workers. Most banks will refuse to work with you, as you will not be able to provide an ample history of your operational data, and you will have to sell your plan based on promises and future cash flow projections. A private lender, on the other hand, will be more lenient.
Of course, private lending agencies are not charities. They don’t approve any application they receive, and they can, in some cases, give the same answer as a conventional bank. Are you in serious debt and you are on your fifth loan application in two weeks? In that case, maybe you need to think of something else. That said, private lenders are more likely to work with you even if your credit balance is less than ideal, and they will at least be willing to hear you out and give you a chance with your application.
Why Not Go for Something More Flexible?
It’s perfectly understandable to first think of the personal loan interest rate when considering accessing a financial aid package provided by a private lender. But, realistically speaking, interest is only one small part of the puzzle, and on its own, it doesn’t really show if a credit package is actually advantageous for the borrower.
Maybe you found a personal loan provided by a conventional bank that’s characterised by a personal loan interest rate that’s surprisingly generous. But what exactly are the other conditions of the loan? What is the repayment plan? How customizable are the monthly payments? How strict are the documentation requirements? The services provided by private lenders have risen in popularity in recent years, mainly due to their flexibility.
For a long-term mortgage or for sums that surpass your annual wage and then some, yes, you might consider the offers of a conventional bank. But, for a personal loan, or a payday one that you are looking to repay at the end of the month, wouldn’t it make more sense to go for the services of an agency that is more lenient and willing to provide you with cash as soon as possible? Most Singaporeans say yes to that, and the financial sector of our country took notice.
