Applying for credit is easy as different banks and moneylenders offer their products to the public. It can, however, take some research and effort before finding a lender that suits you best. These financial institutions have competitive offers, making it even harder to narrow down your choices.
The ideal thing to do is prepare yourself before applying for credit. Search for a money lender that can give you the best offer and meet your demands. Here are questions that you need to ask from the moneylender:
How Much Will This Loan Cost You?
Most lenders have their interest rates and other fees. It means if you take a loan from one company to pay for another, you will have to pay more interest in the long run. Ask what percentage of interest they charge on the total amount. Find out if there are other fees that you need to prepare yourself with when taking a loan from them.
What Are Your Penalty Rates?
Just like any credit card company, moneylenders have penalty rates. If you fail to meet your repayment or pay late, then you may have to pay a higher rate of interest next time. In case of failure in timely repayment, your loan might go into default, and the lender may pass it to a debt collector agency, as per the policies of the moneylender.
What Is The Process For Applying?
To avoid any confusion and mistakes, you need to ask how the application works. How soon can you get the money they promised? Find out if hidden fees or penalties might affect your credit or cash. Ask for guidelines as well as their support team’s hours of operation.
What Is Your Credit Score And What Does It Stand For?
Do not rely on what the lender says about your credit because they might be too optimistic. A good credit score means you can repay your loan on time or before the due date. For this reason, credit score matters when buying a UK house. So, find out how your score will affect your approval chances. Ask if there are ways to improve it because it’s better to understand their system.
What Is The Interest Rate Applicable?
Every type of loan has a different interest rate. Ask for the applicable rates, so you can at least prepare yourself whenever they change it unexpectedly. There can be an increase or drop in the future, so ask if other factors affect it before signing anything. Remember to choose a licensed money lender only as they are regulated by authorities.
Which Types Of Loans Do You Offer?
Find out if they offer different types of loans based on your needs. It is essential because you want to avoid getting into payments that you can’t afford. You may prefer a longer repayment term with higher interest instead of paying the same amount every month but within a shorter tenure. Some people can handle large individual loan payments, while others prefer smaller ones.
What Is The Maximum Loan You Can Have?
You may be able to get loans from various banks, but some may have restrictions based on your credit score. Find out how much they will offer you and who approves it. If the money lender has a pre-set maximum limit for specific client groups, then find out if you can qualify for it or not.
The eligibility requirements may depend on your age, income, and employment status, as well as other factors. Working with licensed moneylenders will ensure the best loans you can get.
What Are The Repayment Options?
If you are not sure how to repay, choose a convenient system for yourself. Ask the moneylender if they have different repayment options based on your needs. Some may require full payment every month, while others are willing to offer flexible repayment plans. Remember that even loans with shorter terms will come with higher interest rates, so plan accordingly.
Are You Licensed Under Singapore Moneylenders Act?
Remember that you cannot work with moneylenders who are not licensed by the authorities. It means they do not have a good reputation, and they may also be unreliable when it comes to getting your money back, especially if you get into difficult situations.
A good money lender will give you peace of mind knowing that someone is looking out for your best interests. They also have a professional team to provide better customer service and support.
These are a few basic questions to help you get started when you decide to take a loan from any of the licensed moneylenders around you. It is wise to prepare your questions before meeting with a lender and be confident about yourself. Remember that you always have options even if you think there is no other way out.