A lot of people rely on taking a quick loan in Singapore to finance their education, marriage, start-up, home, vehicle, and medical expenses. While personal loans may seem like the best and most reliable loan option with no collateral requirements, not everyone is eligible for it. Depending on the moneylender you choose, the time taken for your loan application approval can vary from 24 hours to 5 business days.
If you are taking up an instant loan, you must be aware of how you’re using this amount. Otherwise, you are putting your money and assets at stake. Here, we’ve gathered five mistakes every borrower should avoid while taking out a loan.
1. Borrowing Too Much
Do you know why some borrowers end up in a financial disaster? They borrow too much. Before you even consider taking out a loan, ask yourself these questions:
- Can I repay the loan with my current income?
- Is the loan amount too much to be paid within the given period?
- Can I pay the loan with an interest rate?
2. No Long-term Repayment Plan
The last thing any borrower wants is to hurt their credit score just because they couldn’t pay the loan on time. When there’s an urgent requirement of money, people don’t think about repayment plans. They take out a loan from licensed money lenders in Singapore. However, they end up getting stuck with a lifetime burden. It is, therefore, essential to make a long-term repayment plan before you take out the loan.
3. Incomplete Document Submission
Just because you are taking out personal loans doesn’t mean there are little to no documentation requirements. You must complete all the paperwork to ensure that your loan application gets approved quickly. Be sure to read all the terms and conditions before applying for the loan.
4. Borrowing at High-Interest Rate
Many companies provide quick loan solutions at high-interest rates. It is not advisable to borrow from these companies, since the higher the interest, the more difficult it is to repay your loan within the given timeframe. This can eventually hurt your credit score if you don’t repay the amount and interest on time.
Therefore, it is important that you conduct some research beforehand to find the most reliable and affordable lender to cater to your monetary requirements.
Choose the right moneylender and an affordable loan option that requires a low-interest rate.
5. Incomplete Disclosure
Do you think you can get a loan with false or incomplete information? By not disclosing the required information, you are committing an offence that can take you to court. The licensed moneylender can sue you for fraud and slap a criminal case on you.
If you are being asked to disclose a piece of information, you must submit the details honestly. If you face any problem with revealing the information, contact the licensed moneylender, and they’ll certainly be glad to offer their help. However, you must never fill in and disclose false information.