Most people consider a personal loan in Singapore when they want to pay for something that they want.
Personal loans are often used to immediately pay for things like cars, real estate, electronics, services and emergency funds (medical bills, etc).
While the difficulty of taking out a personal loan prevents most people from considering the option, others who can qualify might feel they should take out the loan regardless of their situation.
Before you consider taking out a loan from a Singapore licensed money lender, think about it. Why? Let’s consider five things to think about before applying for a personal loan.
5 Things to Consider Before Getting A Personal Loan
Before you take on a big financial commitment like a personal loan, it’s important to think about what the terms of that loan may entail. Fortunately, there are ways you can do that
Do you need a personal loan?
Many choose to save their money, so they can eventually purchase the things that they want. Some people, on the other hand, can’t wait. For personal items like cars, electronics and even homes, they instead choose to take out a personal loan.
While it’s perfectly fine to take out a personal loan for high ticket commodities, it’s not always the best choice. If you’re planning to buy a car, it’s likely the best choice, since you can make payments. But if you’re just saving up to buy a new computer or HD TV, you can probably wait a few months to save enough to make the purchase.
Can you afford the monthly payments?
A big part of taking out a personal loan is the monthly payments. So, if you take out a personal loan, you should expect to make monthly payments and continue paying them on time. If you can’t afford the monthly payments, it’s highly advised to avoid taking out the loan and save up the cash instead. You don’t want to negatively impact your credit score, credit history or put yourself into further debt.
Is the loan I want a good deal?
You can always sign for the first personal loan that you qualify for, but it’s not the best thing to do in most cases. To start, the interest rate on the first loan you qualify for might not the best one you can get. Make sure you get a copy of your credit report to learn more about your credit history and credit score.
Do I understand the terms of the loan?
As mentioned, you shouldn’t sign for the first loan from a Singapore licensed money lender that you qualify for. You also shouldn’t sign for a loan with terms that you don’t understand—even if you have read all of them. Before you sign off on a personal loan, be sure to read and understand the terms associated with the loan. You don’t want to sign for something that might turn into a headache in the future.
Am I ready to take out a loan?
Taking out a personal loan really isn’t a last minute thing that you can do. Once you start the process of taking out a personal loan in Singapore, you have to stay committed to the process until you’re able to re-access your funds. So, keep that in mind if you want to take out a personal loan.