The best personal loan is one that’s tailored specifically for your needs, regarding repayment terms as well as your purpose.
That’s why two factors are essential:
- Your lender
- What you’re using your loan for
Let’s take an example.
If you have multiple outstanding loans with late payments that add to $5,000, you can get a personal loan that covers that amount.
After you research the 150+ moneylenders in Singapore, you can find one that offers the best repayment terms for that loan.
But that doesn’t mean you got the best deal.
That’s because you didn’t take a loan specifically designed for your purpose. If you were late on your payments once, you could miss them again. So, a better option would have been a debt consolidation loan that amasses all your loans into one.
That way, even if the sum you borrow is more substantial, you can pay it effortlessly because your monthly instalments are smaller.
And that leads us to:
The Importance Of Securing The Best Personal Loan For Yourself
Why would anyone want less than best for anything they purchase?
That goes double for personal loans, which affect your life significantly more than getting the best pair of jeans.
A loan that’s best for your needs will get you:
- Better interest rates
- A suitable tenure
- More affordable monthly instalments
- Quick financial help
- Financial assistance customised to your exact needs
These elements help you solve your financial difficulties quickly and painlessly. Besides, if you get an affordable loan that’s easy to repay, you can improve your reputation as a client.
This reputation translates into an improved credit score.
Therefore, you can get better loans in the future.
How can you get one of those loans? Keep reading below.
7 Tips To Secure The Best Personal Loan
Follow the tips below to ensure you’re getting the right one for your needs:
1. Consider A Long-Term Loan If You Need More Money
Long-term loans allow you to borrow a substantial amount.
The key here is to only borrow money for things you need. For instance, if you want to further your education or to purchase a home, this sort of loan is worthwhile.
Here are its pros:
- Reduced EMI. As a long-term loan spreads over a larger span, the principal sum is divided into smaller instalments. Remember to use a personal loan calculator to find the right tenure length for your needs. Otherwise, the extra interest cumulated over an unnecessarily long period makes you lose money in the long-run.
- Better credit score. If you pay these instalments on time, your credit score will improve because diligent payments reflect top finance management abilities. That’s why lenders regard you as a dependable potential client. Remember that 30% of your credit rating depends on your financial history, whereas 25% depends on credit length.
2. Consider A Short-Term Loan If Your Credit Score Is Low
Short-term loans have their advantages too:
- You won’t need collateral. Substantial long-term personal loans, like home loans, usually require collateral. Although short-term loans come with reduced principal sums, a reliable moneylender will help you make a suitable plan to invest your loan wisely.
- Lower interest rates. Short-term loans have more affordable interests because they’re less risky. The chances of losing your income source or getting in an accident are lower during a shorter period, and that’s why lenders don’t have to increase their loan rates to mitigate that potential risk.
- Quicker transfers. Considering that short-term loans aren’t that risky, your lender can approve them within the hour.
3. Find Out Your Credit Score
You can get your credit report on the Central Bureau Singapore website.
If your score is 1000-1723, lenders infer that you have a high risk of not being able to repay your loan.
Finding out your credit score is essential because:
- You can contest any errors on your credit report that affect your ratings, such as undocumented payments or suspicious activity on your credit cards.
- You can work to improve a low credit score. As such, you can close unused credit accounts, make timely payments, or consolidate your debt.
But what if you don’t have the time to improve your credit score before applying to a new loan?
You need a reliable moneylender that cares more about your ability to repay your loan rather than impersonal ratings.
That’s what we do.
At GS Credit, we’re currently implementing psychometric business models to assess your repayment credibility instead of relying on generic credit ratings.
Apply with us here.
4. Use A Personal Loan Calculator
There are over 150 licensed moneylenders in Singapore.
Before applying to a loan, you have to compare repayment terms, eligibility criteria, tenures, maximum principal amounts, plus rates.
That’s almost 800 boxes to compare, which translate into hundreds of hours of work.
By comparison, a loan calculator can do the math in minutes so that you can:
- Find the lender with the most affordable loan rates.
- Find a suitable repayment schedule according to the value and number of your instalments.
- Discover how to cut your monthly expenses and manage your finances wisely.
5. Limit The Number Of Applications
A lot of people believe that sending multiple loan applications increases their chances of success. But loan applications don’t work like resumes or lottery tickets.
Your submissions are logged in immediately as you send them, so financial institutions know if you’ve sent multiple applications within a short timeframe.
And this tactic doesn’t signal providence; it shows desperation.
What should you do?
Use your loan calculator to select the five best moneylenders for your needs. Browse their websites to choose the best-suited one. You can also call or write to each lender to receive expert assistance before making up your mind.
Then, apply to the lender with the best loan terms, knowing that you’ll get that amount.
6. Avoid Loan Sharks / Ah Long
Illegitimate lenders prey on people with low credit scores. They trick you into doing business with them, after which they harass and extort you for more money.
That’s why you should always make sure you’re dealing with a licensed moneylender.
Here’s how you recognise a loan shark:
- Illegitimate lenders won’t ask you to come to their headquarters for due diligence. Instead, they’ll promise to transfer the loan amount via WhatsApp or phone call.
- Loan sharks don’t ask you for the proper documentation, but they might ask you to hand over your ID or to disclose your SingPass personal information.
- Illegal moneylenders use aggressive advertising tactics, such as sending ads via e-mail or text. Conversely, licensed lenders can only advertise their business on their website, their building walls or in specialised directories.
- They harass you if you miss a payment.
- They don’t conduct their activity according to a contract. Therefore, a loan shark can increase the interest rate or demand more payment out of the blue. Your first clue is someone asking you to sign a blank or incomplete contract.
- Illegal moneylenders aren’t on the MinLaw’s database of licensed moneylenders.
7. Figure Out Whether To Choose A Bank Or A Moneylender
Analyse the pros and cons of banks vs moneylenders carefully before making your choice. Here are the essential factors to consider:
Bigger Loan Amount. Banks in Singapore usually offer more significant principal loan amounts than moneylenders. For instance, some banks can lend you up to ten times your monthly income, whereas you can only get up to six times that sum with a moneylender.
Laxer Requirements. Convenient bank loans are mostly accessible to people with top credit ratings and with steady salaries of over $20,000-$30,000/ year. That’s because banks offer lower interest rates, so they want to mitigate the risk of loan default.
Quick approval. Moneylenders approve your loan faster than banks because they don’t need to build a detailed risk profile. The reason is that moneylenders practice higher interest rates, but remember these rates cap at 4%.
Why Choose GS Credit As Your Best Personal Loan Provider
You should choose GS Credit as your best personal loan provider because it ticks all the boxes:
- You can fill in your loan application in under three minutes and receive the online confirmation within the hour.
- You can receive your money within 24 hours after we meet at our headquarters for due diligence.
- We offer more substantial revenues of up to $100,000 for unsecured loans and $2,000,000 for secured loans.
- We guarantee flexible repayment terms and longer tenures for unsecured loans.
- We offer our expert assistance for the duration of your loan to ensure you solve your financial issues.
And there’s one more unique advantage GS Credit:
Your credit score isn’t a crucial factor for us because we’re one of the six moneylenders approved by MinLaw to pilot unique business models. That’s what enables us to tailor the right loan for your needs without heavily relying on your rating.
So, if you want the best personal loan in Singapore, you can get it here.