“It’s as easy as 1-2-3,” says the advert. “All you have to do is sign on the dotted line.” Personal loan advertisements will always present this particular loan as the very best deal there is, but you can’t help having that nagging feeling at the back of your mind that makes you wonder whether it really was the best loan deal in the market. In order to get rid of that uncertainty, you will have to choose a loan that fits you right from the very start. You, therefore, need to take out the loan with a trusted lender.
How does one find the right and trusted lender? For instance, in Singapore, there are over 160 licensed moneylenders. It is not easy to find the right money lender in Singapore. Some may even offer you a deal that is a downright rip-off.
Not to worry! We have put together a checklist that you can use to avoid the duds and get the very best deal out there. By using our checklist, you will avoid the many headaches that come with making a wrong choice and save yourself thousands of dollars by finding personal loan lowest interest rates. All you have to do is commit to about an hour or so of research, and you will be well on your way to getting the best available deal.
Avoid the Personal Loan Trap! Review and Use Our Checklist!
Everyone has heard a lending horror story or two. One particularly heart wrenching one was about the young man who had taken out an emergency loan in a time of dire need. He walked into his financial adviser’s office flustered and shaky, with his loan documentation in a neat envelope. Sadly, driven by his desperate need for cash, he had not carried out proper research or even read the fine print. He was stuck with a repayment schedule that was well out of his ability to repay.
There is only one way to stop such a thing from ever happening again, and that is stopping such a person before he or she actually signs the bad contract. Following our checklist will keep you protected from lenders who are more predatory than helpful, and you will be able to get the best personal loan lowest interest rates.
Possible Reasons Why We Need A Loan
Before we dive into the checklist for getting the best loan, we should first understand the type of loans available and why do people apply for loans. Is there a valid reason to apply for a loan? Are there other options available?
In many countries, there are actually different loan packages for different needs. These different loan packages may have different interest rates and loan tenures so as to better fit the needs of the borrowers. Here are a few different types of loans for different purposes:
Home Loans – Home loans are typically larger loans as borrowers need a huge sum of money for their home purchase. The loans typically last longer than other years and may even be up to 30 years. If one is planning to purchase a property, getting a home loan is the way to go. There may be floating or fixed interest rates depending on the loan provider.
Study Loans – Study loans are usually of lower interest rates as they are mainly for students who need money for their education or money to further their studies. They usually do not have an income yet. Education is costly and for some students getting a degree or a masters, they really require financial help. For example, in the United States, nearly 60% of college students take on study loans for their education. Without a stable income, lower study loan rates make the loan more affordable which encourages more students to pursue further education.
Business Loans – Business loans are specially made for entrepreneurs and business owners who are looking for funding or money to improve their cash flow. The loans usually offer money for business expansions, invoice financing or even rental and advertising. In any country, it is best to apply for business loans from banks or moneylenders. Some are known to provide fast approval business loans which give better rates and speed for borrowers. After all, timing is key when doing business.
Foreigner Loans – Perhaps one is working at another country, away from their homeland and they need some extra cash to tide over a tough financial period. For foreigners, it may be harder to get a loan from local banks because of the higher risk and uncertainty. In order to increase the chance of getting an approved loan, foreigners should apply for foreigner loans that are specially catered to them. They are usually unsecured loans that do not require collateral. For example, if an Indian foreigner is working in Singapore and needs extra cash quickly, it is better to get an urgent Indian foreigner loan in Singapore from licensed moneylenders instead of banks. Likewise, if one is an expat working in Malaysia, it will be wiser to apply for foreigner loans instead or other loans made for Malaysians.
Renovation Loans – Many people do not realise that renovation costs can be very high. Getting a brand-new home is expensive and renovations to personalize the house is not cheap either. Changing the tiles, repainting the walls, adding and/ or removing walls, building a new kitchen with an island table cost thousands of dollars. Most people will need to get a renovation loan to cover the costs. Renovations loans usually offer greater flexibility so that the borrowers can have the freedom to undertake any form of renovations they like.
Considerations Prior to Signing for a Loan
Before one signs the loan contract, these are some of the things that you should consider before signing:
- How much money do you want to borrow? You need to look realistically at your ability to pay back the money, and then figure out how much you can borrow. There are many unscrupulous lenders who will be happy to lend you more than you actually need in order to earn more interest. This will cause long-term financial problems for you if you are unable to make timely repayments.
- Applicable fees: If you are to avoid getting fleeced, you will need to do some homework. The government has given guidance on the issue of fees as far as licensed moneylenders are concerned. Be sure to familiarize yourself with these.
- Interest rates. Everyone is shopping for the lowest interest rates. Since there is actually a limit to how much interest can be charged, it is important that you ensure that you are not being charged higher than the maximum interest rate.
- Consider how much you will be expected to repay every month. It is amazing how people can become short-sighted when it comes to borrowing money. They often only see the money they will receive, and not the repayment schedule that they will have to adhere to. Be realistic in this and make sure that you are comfortable with the amount to be paid back, and the schedule of payments prior to signing on the dotted line. Some loans may require a payment every month, others every fortnight, while others may require a check on a weekly basis.
Appreciate the advertising but probe the reality. Understand that advertising material does not tell the whole story. You cannot rely on advertising information or material alone. Many times, what you see in the advert is different from the reality on the ground. Probe the reality by asking questions on important aspects of the loan.
Licensing. Any lender who is legitimately doing business will have a license. In addition, they will subject themselves to regular audits by the right auditing bodies.
By reviewing these basics, you can be sure that you will be dealing with a lender that you can trust.
Finding the Best Loan from a Trusted Licensed Moneylender
Once you have ascertained that a moneylender is indeed licensed and legitimate, you need to further ensure that they will not rip you off when it comes to the loan. Here are a few things that you need to look into in order to get personal loan lowest interest.
- The advert matches the deal. Many times a lender will put up an advert with their best deal on it so that people can come in and enquire on the same. Unfortunately, once you are in looking for personal loan lowest interest, they steer you towards a loan with different terms.
- Ensure that you clearly understand the terms of the loan. According to the law, the lender must ensure that the loan agreement is explained to you in such a way that you understand it. The language used must be a language that you can understand. If the lender uses jargon and complicated terminology to confuse you, be wary of them. On the other hand, if the lender is oversimplifying the contract and what has been said in it, you can be sure that they are trying to dodge the fine print. Should you find that you are not comfortable with the explanations given, do not sign the document. Simply walk away.
The Deal Must Work for You Too
Since you are the one that has to pay back the loan, it is important that the deal is a good one for you too. We cannot tell you in specific terms what the best deal is, simply because different people are looking for different things, and are comfortable with different borrowing terms. The guidelines should be as simple as this:
- You feel comfortable with the terms of the loan
- You know that you can make the repayments without too much strain
Do your homework so that you have a working knowledge of the law, and then make sure to also do the math for yourself. If you feel that the repayment schedule, fees and interest rate are acceptable, then you are looking at a loan that is definitely good for you.