Should You Take a Loan? Some Considerations

If you are looking to borrow money in Singapore, you have probably already studied the options that are available to you, such as banks and private loan lenders. Of course, there are several reasons why someone why wish to, or need to take out a loan. It can be for an emergency, a substantial purchase, or to consolidate existing loans. These are all common and valid reasons for taking a loan.

While you might feel like you need a loan, it is worth thinking about it from all angles before doing so. Failure to keep up with loan repayments can have devastating effects on you, your family and potentially your business. Here are four significant factors that you should consider before deciding to borrow money in Singapore:

1. The purpose of the loan

Before going to a bank or private loan lenders in Singapore, you should think carefully about the purpose of the loan. Is it to buy something that you can manage without or is to pay for something that you really should have saved for? If it is something that you need, then you need to consider the best options that are available.

2. How quickly you need the money

If you need a loan in an emergency, it is almost certain that you will need the cash quickly. If this is the case, you may want to look at alternatives to banks as they often take time to decide along with completing that paperwork being a laborious task. Private money lenders can usually arrange the funds within 48 hours if you meet their criteria.

3. Can you repay the amount every month?

The most significant consideration when you decide to borrow money in Singapore is whether you can afford to make the monthly repayments. It is essential that you aren’t financially crippling yourself by becoming burdened by a debt that you can’t afford. If you take a secured loan, the cheapest option, your assets, including your home, may be at risk if you fail to maintain regular payments. Your ability to remunerate the borrowed amount punctually is also something that the moneylender will take into consideration.

4. The type of loan you need

There are various types of loan available that are designed for different circumstances. For instance, overdrafts and payday loans are short-term forms of borrowing, and if misused can result in excessive amounts of interest being paid.

Personal loans are usually a fixed amount for a given period and cheaper, although they may need to be secured against collateral while car loans and home loans are for a specific purpose. An extensive range of business loans are available, designed to cover a variety of different situations and circumstances.

Loan Options in Singapore

Here at Fast Money, we offer a selection of personal loans, including home loans, car, and short-term payday loans to help with your circumstances. We also have a range of business loans available suited to both small and large organisations.

If you’d like to find out more about the options suitable for your situation, do approach our sales team at (+65) 62244746 (Yishun) and (+65) 62244749 (Tampines) to provide you with more information. For more insight on taking out loans in Singapore, do check out our blog page where we write about different kinds of financing situations!