Taking a loan in Singapore has become a way of financial management for most of the people nowadays to ease their financial woes. And to make matters easy for you, there are several moneylenders in Singapore who offer a low interest loan at attractive terms and also work out the best possible payment terms for you. If all goes well, you can get a fast loan in Singapore without any collateral as long as your credit score is good.
A good credit score is very important while applying for an instant loan in Singapore. It indicates that you have a stable financial life and a good repayment track record. A high credit score is a key factor for obtaining a loan in Singapore and licensed moneylenders or banks might even reject your application for cash loans if you have a poor credit score. Credit score not only helps in assuring moneylenders that you would repay the loan on time, but also in helping you get the best low interest loan.
Honestly, chances of you getting that urgent loan can be few if you don’t get the right guidance on time. In this article, let’s now take a look at the 4 mistakes to avoid while taking a loan in Singapore:
Not paying your existing loans and credit cards on time: Failure to repay your loan EMIs or credit card payments on time is bound to affect your credit score adversely. This might cause an obstacle when you apply for a loan in Singapore. Similarly, not repaying your credit card dues on time will also cause a problem while applying for money loans.
A very high debt-to-income ratio: One of the most important elements of maintaining good financial health is to keep track of one’s debt-to-income ratio. The calculation is easy and you just need to divide your monthly EMIs and debt repayments by your monthly take-home-salary. The lower the number obtained is, the better it is. For instance, if you have a monthly loan burden of $1000 and a salary of $5000, your debt-to-income ratio would be 0.2, and if your loan burden is $2000 then the ratio would be 0.4.
A common mistake that many people make is to take more money loans or make more purchases through credit card as soon as they get a higher credit limit or their income increases after a promotion. This leads to a rise in their debt burden and the debt-to-income ratio which might make it difficult to get another loan in Singapore.
The ideal scenario is to ensure that your EMIs for money loans don’t exceed 10% of your net monthly income. Cut down on excessive borrowings and live within your means to avoid taking loans for lifestyle needs. This will help you in keeping the debt-to-income ratio low and make it easier to obtain a fast loan in Singapore when needed.
Not doing research: When you apply for a loan in Singapore, you must do a thorough search about the lender and the money loans on offer. This will help you find a low interest loan. You can easily search for an online loan from a reputed moneylender nowadays. Further, you must find out the finer details about the loan before taking an instant loan in Singapore. You should find out what are the penalties, processing fees, interest rates, late payment charges and if there are any other hidden or variable costs. This research can let you compare different options and take the best fast loan in Singapore.
Applying for too many money loans: Last, but not the least, a lot of people apply for multiple loans as they need urgent funds for their pressing needs. This need for instant loan in Singapore might make the person apply to several moneylenders at the same time. Each of the loan requests is going to reflect on the applicant’s credit score, and if too many requests come simultaneously then it can lead to a negative impact on your credit score. Taking a loan in Singapore is not a bad thing at all, but you must be aware of these pitfalls and apply for an online loan smartly after doing all your research and calculations.