Welcome, dear borrower! Today, you will go for a trip into the vast world of personal finance and explore a question that has sparked curiosity in many borrowers’ minds: can you take a considerable personal loan from a money lender in Singapore, and how many can you apply for?
It’s a query that isn’t as simple as it could appear at first glance. Still, by the end of your voyage, you’ll have a firm grasp of the intricacies and, more crucially, the necessary information to attain conscious conclusions.
Begin your journey on this wave of knowledge!
Can You Take Multiple Personal Loans in Singapore?
In the finance universe, details, details, details are the key. Yes, taking multiple personal loans from money lenders in Singapore is possible.
Nevertheless, the “yes” does not exist in a vacuum. Instead, it’s bundled with caution, prerequisites, and exemplary notes.
Here’s the simple truth: Multiple personal loans are like multiple dishes at a feast. You have permission to acquire it all, but can you handle it all?
How about two or three if you can pay for one personal loan from a money lender? It’s time for your to find out.
Examining the Money Lender’s Perspective
The first step towards securing multiple loans is understanding how lenders think. Remember, lending is not a charity act; it’s business, with its underlying principle being profit. When you approach a personal loan from a money lender, they will evaluate specific factors before granting you the approval:
Income: The higher your income, the better your capacity to repay loans.
|Personal Loan Types||Singaporean & PR Income Eligibility||Foreigner Income Eligibility|
|Personal Instalment Loan||Minimum $20,000 annual income||Minimum $45,000 annual income|
|Personal Line of Credit||Minimum $30,000 annual income||Minimum $60,000 annual income|
|Debt Consolidation Loan||Minimum $30,000 annual income||Minimum $60,000 annual income|
Credit History: It tells a tale of your past dealings with credit. A clean credit history works in your favor.
Existing Financial Commitments: It includes all your current debts, including credit card debts, car loans, mortgage, secured and unsecured loans, etc.
Singapore’s legal money lenders utilize such a trinity of information to gauge your creditworthiness. Their perspective is clear: if the evidence suggests that you can manage the responsibilities of another loan, they’re more likely to grant it.
The Power of Credit Scores to Take Out a Personal Loan from Money Lender
A credit score is a number that can open the gateway to financial freedom or bolt it shut. Think of it as your monetary report card – a noteworthy, comprehensive indicator of your creditworthiness.
In the island city, the Credit Bureau Singapore (CBS) generates your credit score, which ranges from 1000 to 2000. The accompanying risk grade goes from AA as the least risky to HH as the most high-risk. A higher score closer to 2000 represents a lower risk for lenders, increasing your chances of securing multiple personal loans.
A few factors impact this score:
Payment History: Pay must be on time, leading to a higher score.
Credit Exposure: The higher your current debt, the lower your score.
Credit Account History: The age of your oldest credit account.
Recent Credit Applications: Too many applications in a short span could lower your score.
These factors together tell a story about your monetary behavior. Consistent payments, controlled credit exposure, and a long history of good credit management may lead to a good credit score. With an excellent credit score, getting various personal loans at once becomes more attainable.
The Consequences and Benefits of Obtaining a Personal Loan from a Money Lender More Than Once
Like most monetary preferences, multiple personal loans have pros and cons. Understanding these will help you make a balanced judgment.
|Flexibility: Multiple personal loans can help cover several monetary necessities simultaneously.||Higher Debt: More loans increase your total debt, leading to larger repayments.|
|Potentially Lower Interest Rates: Once your credit score progresses better or is excellent after taking the first loan, subsequent ones might have lower interest rates.||Potential Credit Score Impact: Each loan application can negatively impact your credit score.|
|Possibility of Longer Repayment Periods: Spreading out different loans might give you more time to repay.||Risk of Overborrowing: More access to credit can lead to unnecessary borrowing.|
A Peak into the Personal Loan from Money Lender’s Land
As you continue your voyage, it’s the perfect time to peek into the regulatory land of a personal loan from a money lender in Singapore. The island city’s Monetary Authority of Singapore has imposed unyielding laws to defend borrowers and maintain a healthy monetary environment.
For instance, under the MAS regulations, your Total Debt Servicing Ratio (TDSR) should stay within 60% of your gross monthly income. It includes all your monetary obligations – personal loans, credit card payments, car loans, mortgages, etc.
‘Debt Servicing Ratio’ and What it Means for You
What is a Debt-Servicing-Ratio you just read? Think of it as a yardstick measuring your capacity to handle debt. The Debt-Servicing-Ratio calculates the proportion of your gross monthly income for servicing your debt responsibilities.
In Singapore, lenders typically look at your Total Debt Servicing Ratio (TDSR), which includes all debt obligations. MAS has capped TDSR at 55% of your gross monthly income. So, if your monthly payment is $5000, all your monthly loan repayments shouldn’t exceed $3000.
TDSR is a critical factor that lenders consider when you apply for multiple personal loans. If taking another personal loan from a money lender causes your TDSR to exceed the 55% limit, your application could be denied.
Cautious Considerations: The Risks of Multiple Personal Loans
It’s vital to remember that while multiple personal loans can be a tool, they can also turn into a trap. The lure of easily accessible cash might lead to overborrowing, pushing you into a debt spiral. It might lead to a decreased credit score, making future borrowing more difficult and expensive.
Additionally, taking another personal loan from a money lender means keeping track of diverse repayment schedules, interest rates, and terms, which can be challenging and stressful.
Lastly, defaulting on loan repayments could lead to severe consequences, including legal actions and a substantial blow to your credit score.
Steps to Take Before Applying for Another Personal Loan from Money Lender
Before taking multiple personal loans, one must undertake some essential steps. The chart below presents you with a simple guide on what to do before applying:
|1||Evaluate Your Needs: Understand why you need multiple loans and whether they are necessary.|
|2||Review Your Credit Score: A high-level credit score increases the possibility of getting loan approval and better loan terms.|
|3||Calculate Your Debt Servicing Ratio: Ensure your repayments do not exceed 60% of your income.|
|4||Research Lenders: Compare various lenders’ loan terms, interest rates, and fees.|
|5||Plan Your Budget: You can repay the loan without straining your finances.|
Taming the Financial Tsunami with a Personal Loan from a Money Lender
Taking one and another personal loan from a money lender in Singapore is a possible venture that needs careful planning, evaluation and a good understanding of your monetary background. It’s not about treading away from the waves but learning to surf them to your advantage.
And remember, in your finance journey, always choose a licensed, reputable lender like Accredit. That’s your best lifejacket in the sea of credit.
Accredit Licensed Money Lender
Got more questions, or ready to take that financial plunge? Contact us, and we, Accredit Licensed Money Lender, are prepared to serve you today.
Our team of experienced professionals will help and guide you through your loan process and corroborate you will make the best decisions for your monetary journey. Ride the waves to financial freedom now!