Do you know which type of loan in Singapore that’s considered the most popular option for quick, easy, and hassle-free fund access for various needs? If you answered, applying for personal loans in Singapore, you guessed it correctly!
It proves it’s famous as the primary financing option for Singapore’s community. Anyone living in the country may apply for a loan, but there are specific rules and regulations that borrowers and moneylenders must follow.
In this article, you’ll find out the legal framework tied to moneylending in Singapore, who can grant unsecured loans legally in the country, the steps for applying for consumer loans in Singapore and more.
What is Moneylending in Singapore?
Moneylending in Singapore has existed in the country since the early 1800s. The finance industry has stood against time and competition and thrives today.
The financing concept of moneylending in Singapore is easy to understand as it’s straightforward. It’s to provide borrowers with cash loans, goods or services. Included in the process of lending is the borrowers are under a legal obligation to repay the total amount they may receive from a moneylender.
Aside from the owed amount, borrowers must pay interest rates in instalments and other fees tied to their applied loan. Individuals considering applying for unsecured loans in Singapore should contact a licensed moneylender in the country for legal and legitimate financial assistance.
Who Are The Licensed Moneylenders in the Country?
A moneylending company that offers consumer loans to its clients may only be managed by a licensed moneylender. It’s their responsibility to administer, guide, and proffer assistance to the borrowers who intend to get a consumer loan from the moneylending business.
Every licensed moneylender in Singapore will comply with the rules and regulations stipulated by the Moneylenders Act and Rules. Among the laws they have to follow will cover loan limitations or capping, legal obligations to their borrowers, and avoiding any practices that would breach the Moneylenders Act and Rules in any manner.
How would you know if the moneylender you currently transact with is legitimate? The Registry of Moneylenders grants access to the country’s comprehensive list of all legal moneylenders. Thus, monitoring which lending companies in Singapore are legit or illegal is easier.
Any business that carries out or commits to lending money without certification or licence is considered an unlicensed moneylender or ah longs.
Are You Eligible to Apply for Personal Loans in Singapore?
Now that you know which financial business to go to and to whom you may apply for the consumer loan, what’s next? Since you will be sending a loan application to a moneylending business, you must first see if you are eligible.
How to determine your loan eligibility?
All interested borrowers must qualify for the eligibility criteria before sending the loan request. The eligibility standards for unsecured loans in Singapore primarily include these below;
- You must be a Singaporean Citizen, Permanent Resident, foreigner or ex-pat.
- Loan claimants must be of legal age or at least 21 years old.
- In addition, you must have proof that your annual income is at least $10,000 for a smaller loan amount receivable. If you plan to pursue a more considerable loanable amount, you must present proof of having a minimum yearly income of $20,000.
- In a country where credit score and background are essential, you must evaluate and ensure a good credit score and background.
After you have assessed these criteria and know you are eligible for the unsecured loan, it’s time to apply.
How to Apply for Personal Loans in Singapore?
Applying for unsecured loans in Singapore is easy. That is so long as you have prepared the requirements and documents. The need for paperwork is crucial in moneylending and loan requests in Singapore and the finance industry. The documents you will produce will verify your identity, employment, and more.
The several documents you have to provide upon request for a personal loan are;
These are the types of paperwork that serve as your proof of identification. You may present your National Registration Identity Card (NRIC) or passport to individuals in Singapore.
Other documents you may provide to the licensed moneylender if you are a foreigner or ex-pat in the country are your work permit, employment pass, dependent pass, and long-term visit pass.
It’s the document that verifies your employment history or validity. Presenting your proof of employment can help immensely with the loan process. Sometimes, a licensed moneylender would request the employer’s letter.
Licensed moneylenders in Singapore will ask for a borrower’s proof of income. It’s to evaluate your capacities to repay the consumer loan you are applying for, and these are usually the;
- Income tax statements:
If you are currently an employee under any company in Singapore, are self-employed or are a business owner, then this is the kind of income proof to provide to a moneylender. It should be your income tax statement for the past 24 months.
If you are employed in any company in the country, provide your current three-month payslips to the moneylender.
- CPF contribution history:
Borrowers wishing to take out a personal loan must declare their CPF contribution history for the past year.
A credit report is vital when applying for consumer loans in Singapore. A borrower may acquire the complete information for your credit report from the Moneylenders Credit Bureau (MLCB) online or in person at the DP Information Group’s Aperia Tower 2 Singapore offices or the International Plaza Singapore.
Proof of Residence
Borrowers must ensure they reside in the country to be eligible for the loan application. When necessary, you can present proof of assets like property deeds, proof of address like utility bills, and guarantor information.
To proceed to apply for unsecured loans in Singapore, you must fill out the application form. What are the questions you have to answer from the application form? These are the common queries a borrower has to respond to when requesting a loan from a moneylender in Singapore:
The questions a borrower needs to fill out from the application form. The personal information section will require your name, passport or NRIC number, gender, age, marital status, contact details, and current residential address.
Why do licensed moneylenders have to get this personal information? The purpose of these details is to validate your identity and to have access to numbers to contact you when necessary.
- Income and employment information
The following section will mainly include questions about your income and employment information. In most application forms, you may have to disclose your employment status, like your job title, the name of the company you work for, and the length of employment.
Income details must also be disclosed, including your monthly salary and any sources that provide you with income.
The critical material accessed from this section will inform the moneylender of your capacity to repay the consumer loan.
- Details for the loan
In this section of the application form, you must be specific about the amount of money you’d like to borrow, the loan terms, and the purpose of the personal loan. You may also indicate whether you have an ongoing loan with another or other licensed moneylenders in Singapore.
- Additional and supporting documents
Supporting documents may vary depending on the moneylender you’re transacting with. Usually, these would be your latest payslip, NRIC, and other essential paperwork.
At the form’s end, it’s the declaration section. Here you will sign it to declare that every piece of information you’ve written and provided is truthful and accurate. Aside from this, it would also mean that you have agreed to the loan’s terms and conditions.
The section clearly states the possibility of obtaining your credit report from the Moneylenders Credit Bureau (MLCB). Thus, it’ll need your consent to allow or permit the moneylender to do so.
When you’ve accomplished all the loan eligibility and application steps, it’s time to pass the form to the certified lender.
Likely, a legal moneylender will then ask for supporting or additional documents. Thus, be sure you already have these prepared so you won’t face any hassles.
Where Can You Wait for the Personal Loans Approval?
Moneylenders in Singapore must abide by the laws and regulations of the Moneylenders Act. One of the ordinances stated in the Act implies all borrowers should always be present when applying for personal loans in Singapore. Furthermore, they must guide and explain all the necessary loan terms and conditions details.
As a result, you have to be at the moneylender’s office while waiting for the loan’s completion. Moreover, it’ll be easier to communicate your concerns or questions to the lender when you’re at their office.
Nevertheless, borrowers may easily apply online and wait for the legal moneylender’s notification of whether their loan application’s successful or not. Due to technological advancement, legal moneylenders must incorporate to better serve and grant personal loans in Singapore.
How long is the waiting period?
It may depend on the lender. But in many circumstances, applying for and taking a loan from a certified lender doesn’t take weeks or even a whole day. It’ll take a few hours, especially when you’ve prepared all necessary proof, paperwork, or additional documents.
What Happens When Your Personal Loans Application is Approved?
If the loan application gets approved, you must sign the loan agreement. The moneylender’s legal duty is to give you all specifics about the loan agreement in the language you feel comfortable using.
Every detail on the terms and conditions has to be provided for you by the moneylender. It comprises interest rates, repayment schedule, loan amount, loan tenure, and other charges. If you are reluctant because you didn’t understand some information, let the moneylender present a more comprehensive explanation.
Ensure you understand everything stipulated in the loan agreement before signing it.
Upon signing the loan agreement, the licensed moneylender will disburse your loan to the bank account you provided in the application form. It may take 1 to 2 business days before you receive the disbursement.
Apply for Personal Loans in Singapore for Fast Funding
Applying for personal loans in Singapore may seem frightening for a borrower who has never done it before. Thus, this article provides a comprehensive guide to understanding which industry offers personal loans, the essential documents and details, and the steps you’ll need to accomplish the loan procedure.
All in all, the application can be direct via going to the legal moneylender’s office or their official website. To ensure that that’ll be your experience, prepare all essential documents. Be accurate and truthful with the details you provide; soon, you’ll get the approval fast and the funds you need.