Loans are one of those things that the majority of people will take out, but no one ever talks about. Maybe it’s a shyness about talking about personal finances, but the end result is that there is a great deal of ignorance and misinformation surrounding personal loans floating around out there. Unless you have a friend who’s a banker or in finance, it’s likely no one you know will be able to confidently talk about the process of getting a personal loan.
We want to clear the air a little bit, so we’ve rounded up three of the most common and wrong-headed myths about personal loans in our latest blog post. Read on, you might learn something!
Banks are the best place to get a loan
This is the most common one. Start talking about personal loans and someone will inevitably ask which bank you are applying through. There is this perception that not only are banks the best place to get a personal loan, they’re the only place. Singapore is a mature economy with a highly-developed finance and credit industry, so consumers have a broad range of lenders to choose from, each offering their own loan products with their own unique terms. Look beyond the banks and consider how a licensed moneylender could help you achieve your financial goals.
The application process is long and complex
If you’ve never taken out a loan, you’re likely to imagine the application process involving physically appearing at the lender’s office, waiting for them to call you, then pleading your case for a loan directly to the lender’s face. Then weeks later, you’ll find out in the mail if you were approved. An intimidating thought! Fortunately, not one that has much to do with reality. Lenders in Singapore are utilising some of the latest advances in financial technology to make the process of applying for a loan easier than ever. Moneylenders have streamlined their approach, allowing you to start exploring your options for a loan through their website, before coming down to the office to sign and fill in a paper application.
Loans always mean more debt
Many people see the word ‘loan’ and immediately have visions of their equity plummeting. You’d be surprised how wrong this is! Carefully choosing your loan product can actually reduce your overall debt pool. Think of it this way – if you’ve got several lines of credit out such as a credit card, a car loan and a mortgage, you’re paying a certain amount each month in interest that’s simply lost income. That’s money above and beyond the original loan amount that you could be saving. Choosing to do what is called a refinance – that is taking out a new loan to replace an existing loan – can actually save you money where the new loan has a better interest rate, saving you money in the long-term.
Make the intelligent financial decision and speak to the loan consultants at Fast Money and learn how a loan could help you achieve your financial goals.