Some people wrongfully consider credit cards as debt traps. Some view personal loans as something scary. With this, some people end up being deprived of an opportunity to maximize the benefits that they can get from borrowing money from the reputed licensed money lender Singapore. Without fully understanding the nature of personal loans from legit lenders and banks, borrowers are left with no choice. They turn back to the loan sharks and the informal moneylenders.
In this article, you will learn about the nature of personal loans so that you can have a chance to improve your finances through it. Here are some of the most common misconceptions about personal loans and the several reasons why you must never believe in them.
A High Credit Score to Qualify for a Personal Loan
Indeed, the credit scores are one of the bases for approval. However, not all lenders refer to the numbers whenever they decide that you qualify or not. There are times when your credit scores have not improved yet. This may happen even if you have a good source of income for the past two years. There are also various types of loans that the companies offer for debt consolidation. This means that the lending company recognizes your need to borrow money so you can consolidate your outstanding debts.
On the other hand, your loan approval can help increase your credit standing. Opt for lenders who do not have strict requirements. Submit your documents and get them approved. When your application has been approved, consider these chances as a stepping-stone to be qualified for higher loan amounts with reasonable interest charges.
Cannot Address Emergencies Immediately
Some people think that personal loan applications take 10 days before having a result. This is one of the reasons why some opt for loan sharks. Loan sharks offer high-interest rates but can provide the cash in few minutes only.
Alternative lenders and modern banks employ the latest technology in facilitating fast loan approval. Today, you can get feedback in less than 24 hours. You can receive your loaned amount in less than 48 hours. Lending companies have modified their loan application process to address the needs of their customers.
Personal Loans are Not Obtainable Online
Perhaps you might think that applying for a personal loan requires you to visit the lender’s physical store. Today, everything is accessible online. You can apply for a personal loan via the website of the lender. Sometimes, the website can provide you with feedback within 24 hours.
Then, you can select the loan tenure from one to five years.
Borrowers are free to select the term in settling their loans. You have the leeway on your payment schedule, from six to 36 months. The length of the loan tenure will depend upon the borrower’s preference.
The Loan Comes With Lots of Fees
In your loan amount, there will be deductions of application fees, processing fees, and other types of charges. However, these can all be waived if you apply for the loan during the promotional period of the banks. There are times when your credit score will allow you to waive some fees. As such, it is good to note that as a borrower, you have to fix your credit before applying. This will help you increase your chances of being approved for low-interest rates and waive the fees involved.
The Loan Interests are high
The personal loan interests can range from 1% to 4% each month. This depends upon the lender’s terms and conditions plus your credit standing. High-risk individuals will not be granted with low-interest charges. Meanwhile, those with good credit scores can have a low-interest loan promo.
The idea of having high-interest for personal loans started from the experiences of the lenders with people who do not pay their dues on time. Missed payments and delinquencies would often lead to high-interest charges. In this case, personal loans have grown more significant because of their interests and delinquencies. However, if you are a responsible borrower, then you need not worry about the additional fees.
Personal Loan Application is Hard
For first-time borrowers, the requirement for a personal loan application at https://lender.sg can be daunting. This is true for those who also do not have the available documents ready.
As a general rule, the licensed money lender Singapore would require a government-issued ID plus proof of income. Sometimes, they will ask for supporting documents if your proof of income indicates a salary that will not qualify you for the loan.
Gone are the days when you need to visit the store and fall in long queues just to submit your application form. Lenders have made it possible for you to apply for a loan online such as in Lender.sg.