Suddenly, debts can mount up to overwhelm a Singaporean. For many such individuals, the answer will be to take some cash on loan. The loans may be to settle arrears on bills or overcome short-term cash flow shortfalls. Loans are often a workable solution in such circumstances. Nonetheless, whether you ought to borrow from a licensed money lender in Singapore is a matter of your unique circumstances. This article presents the conditions whereby it becomes sensible to borrow money from licensed moneylenders in Singapore and conditions whereby it may become prudent to wait.
Role of Licensed Money Lenders in Singapore
Licensed money lenders are licensed by the Ministry of Law to lend to the public and follow strict guidelines that ensure full transparency and fairness in their lending practices. Therefore, any borrower can feel secure while taking a loan from a licensed money lender because such lenders are held accountable by regulations designed to prevent predatory lending practices.
The first factor to consider is the compatibility of your short-term needs with your long-term repayment capability when borrowing from a licensed moneylender in Singapore. Licensed moneylenders have issued several types of loans, such as personal loans, payday loans, and business loans. Unlike illegal lenders or loan sharks, licensed moneylenders are under an obligation to state clearly the interest rates, methods of repayment, and fees involved when giving a loan. This transparency might make the choice easy for someone who knows what suits their situation.
When to Borrow
Borrowing an online money lender in Singapore can work because one will eventually be able to get money when needed and easily pay back the loan. Such cases include urgent medical expenses, car repairs which may not have been budgeted for, or pay overdue bills. In a particular case, a payday loan could be useful to those people temporarily with shortfalls in finances, such as one’s unexpected expenses before salary payment.
The easiest way to access a payday loan in Singapore may be from an authorised moneylender. Payday loans are usually issued for short-term purposes and focus on paydays filling the gap between the next dates in people’s lives. Relatively small and fast, such loans are perfect for urgent needs. However, the payday loan usually carries with it a higher interest rate because of its short-range history. Therefore, while taking this loan is okay, one needs to confirm whether they can repay the loan in totality within their next payday.
Besides, for individuals looking to roll over existing high-interest loans, a loan from a licensed moneylender is one way out. A personal loan would provide them with better interest rates compared to credit card debts, meaning that they would be able to achieve an overall easing of the financial burden. On the other hand, the loan term needs to be understood so that the monthly instalment is within the budget.
When It May Be Better to Wait
While borrowing from a licensed moneylender in Singapore can prove helpful in many situations, there will be times when you will want to wait. If you are already too stretched managing your existing debt, trying to borrow another loan to enhance your financial commitments might make things worse for you. The uncertainty of one’s ability to repay more debts can lead to financial stress and, in the worst scenario, legal action from the lender.
If you expect many challenges in repaying the loans on time, then waiting and searching for an alternative could be appropriate. You may try balancing your budget, see a financial advisor or take part in government programs aimed at helping people get out of financial tight spots before trying your luck with loans. It will help you avoid a debt trap where you continue borrowing to tackle short-term rather than long-term financial problems.
The second reason to wait before borrowing is if the need for funds is not a high priority. If it’s one of those things where delay before spending is seen as possible, taking time might pay in the long run- perhaps saving first or getting money from friends or family without interests attached. In such a case, you will no longer have interest piling up and you’ll be able to manage finances much more effectively.
Finally, if you want to borrow for discretionary spending, such as financing a holiday or the purchase of some luxury goods, you should probably wait. Borrowing to finance discretionary spending is unlikely to be a sustainable long-term source of finance because it creates no future value. Under certain conditions, it is better to save until you can spend money borrowed without capturing the actual cost associated with borrowing.
To borrow from a licensed moneylender in Singapore, you have to make a careful decision regarding whether to do so or not since your urgency or situation and need may depend on your finances. Payday and personal loans are essential sources of relief for short-term financial crises; however, they can also be dangerous if not utilised appropriately. Borrowing is proper if the need for funds is of paramount urgency and the borrower can have a clear plan to repay the loan. Waiting and searching for other alternatives might be the best course of action when the financial condition does not feel as dire and the possibility of default is high.
Being wise is more than just that because Moneyplus Capital is dedicated to assisting you in making sound financial decisions. If you ever need to borrow from a licensed moneylender, contact us here to create the options and get customised professional advice!
