Singapore has one of the fastest-growing economies in Asia. The cost of living is relatively high as well. With these, it is almost inevitable that Singaporeans would approach banks or moneylenders to aid them with their financial needs.
Credit scores play an important factor in getting a loan. Most money lending services are available only to those with a good credit score. Fortunately, there are still loans available even to those with a low or bad credit score.
In this article, you will learn where to get a loan if you have a low or bad credit score. Information on how to improve your credit grade is likewise provided. This article aims to help you find the loan that may work on you despite your credit history.
In terms of money lending services, popular choices are banks and moneylenders. Both offer similar services. However, owing to the differences between the two, their services’ features are not the same.
In Singapore, moneylenders are businessmen. Through the Registry of Moneylenders, the state gives license to business people to operate as a moneylender. The regulation also puts limits as to the services they can provide.
- Loan Amount: In terms of the loan amount, licensed moneylenders offer smaller amounts than banks. This is one of the big differences between the two.
- Approval of loans: Licensed money lenders approve loans faster in as fast as an hour because they require fewer documents. For banks, loans are approved much longer. It takes days. This is because banks are much stricter and ask for more documents.
- Interest rates: Moneylenders in Singapore charge up to 4% interest rates monthly as compared to banks. Most of the time, banks’ personal loans charge from 4% per annum.
- Credit scores: When it comes to credit scores, money lenders are more lenient. Even if you do not have an average credit score, you may still get loans from money lenders. Banks require you to have a credible credit score.
As mentioned earlier, a low credit score makes it impossible for your loan application to be approved. While you may still get a loan, there will be higher security imposed in the agreement. These may not help you get an ideal loan arrangement.
If you have a low credit score, you may still be granted loans. The agreement will likely have a high-interest rate, lower credit limit, and shorter credit terms.
If you think these are burdensome, you may consider getting a secured loan and getting a guarantor to increase the loan amount. Loan providers will be amenable to this since there is security to the loan despite the low credit score.
Fortunately, there some moneylender loans in Singapore that don’t require high credit. You may also avail of these loans for you to repair your credit standing. The terms and conditions of the loan agreement may vary on a case-to-case basis. Generally, the characteristics of moneylender loans are as follow:
- Uses: It is a short-term loan that may be used for making big purchases. The loan may be used for home improvement, vacation, and purchase of a car, among others. Education loans may also be offered under a personal loan.
- Features: Personal loan has a low-interest rate from 1%-4% only. These rates are lower than the interest rate of a credit card. You may borrow an amount which is up to 6 times your salary.
- How to apply: You may apply using moneylender’s online facilities for a hassle-free loan application, or you may talk to a loan officer. You will be scheduled for an appointment to discuss the terms and conditions of the loan agreement, and then you will receive the cash as soon as the agreement has been signed.
- Uses: Many foreigners are living in Singapore. To help them adjust to the cost of living in Singapore, foreigner loan may be availed of.
- Features: There is no credit score checking. Loan still has low-interest rates from 1%-4% only.
- How to apply: Same as above.
- Uses: Whether you would like to put up a business or expand your existing business, business loans are available. A business loan may also be used when your business is currently experiencing turbulence. The usual requirement is the continued operation of the business for 1 year.
- Features: There is a flexible repayment tenure. The loan term for business loans may be adjusted.
- How to apply: Same as above.
- Uses: This may be used as emergency cash or quick cash. If there is an unexpected expense and insufficient funds, then a payday loan may be the solution. This loan is available to local and permanent residents with a minimum salary of SGD 1,500. It is also available to foreigners with a minimum salary of SGD 2,000.
- Features: There is no credit score checking. You can also get the money fast.
- How to apply: Same as above.
- Uses: In Singapore, monthly repayment loan is being offered under personal loans. It allows you to borrow up to 6 months worth of your income. This is ideal for your long-term commitments and more affordable than line credits.
- Features: It has low-interest rates from 1% to 4%. There are repayment plans.
- How to apply: Same as above
Indeed, it is easier to get a loan from a moneylender when your credit is bad or low. However, it is still important that you deal with a reputable moneylender. To help you find the best moneylender, there are things that you need to consider.
- Determine if the moneylender is licensed. The list of licensed moneylenders in Singapore is published on the website of the Ministry of Law. The Registry of Moneylenders of Singapore regulates licensed moneylenders, so it is safer to transact with them.
- You can only look at how long they have been in the industry. The reliability of moneylenders may also be determined through their years in the industry. Having health with clients for a reasonable amount of time shows that the moneylender is reputable.
- Lastly, look at customer satisfaction. This may be done by reading clients’ reviews of the services of moneylenders. No doubt, good customer service is crucial in selecting a moneylender.
One of the most reputable licensed moneylenders in Singapore is GM Creditz. GM Creditz was established in 2009 and has helped many individuals, even those with bad credit rating –as long as borrowers have proof that they have the ability to repay the loan on time.
All is not lost when you have a bad credit score. There are different ways you can repair your credit grade. A repaired credit score can help your loan application be approved.
- Number one, pay your bills on time. Faithful and on-time monthly repayments of your dues will be reflected in your credit rating. As such, it will show that you are responsible for the borrower. Borrowing small loans and paying them on time may help you build your credit score fast.
- Avoid using your existing credit lines unless necessary. Bear in mind that it is also important to maintain a credit utilization ratio of 30–40%. This will help you manage your existing credit efficiently.
- You also need to avoid applying for many credit lines in a short period of time. This behaviour may show that you are currently having trouble with your financial needs. It signifies that you lack funds and eager to get a cash loan.
- Lastly, avoid closing credit accounts, especially older ones in good standing. An older good standing credit account may help you get higher credit grade. If you have a credit account in good standing, it reflects that you are a responsible borrower.
These are just some of the things that may help you build your credit score. Remember that a credit score shows your credit history. In case you default in your personal loan or other types of loan, it will be recorded.
Thus, if there is one advice that will surely help you, you will ensure that you pay all your dues on time. A record of no default will give you a high credit standing. Manage your resources well.
Taking a loan in Singapore, you have to make sure that you maintain a good credit score. It opens your door to a lot of financial benefits. If you apply for a loan with low or bad credit, there is a higher chance of being rejected. In case you trip and get a bad or low credit score, worry not.
To help you repair your credit grade, consider applying for a loan from a licensed moneylender. This will help you settle your existing debts and needs. However, make sure to comply with the payment schedule of your loan and pay them on time.
If you have a bad credit score, but in need of cash, check out how GM Creditz can help you. GM Creditz is a licensed moneylender in Singapore that offers loans to individuals regardless of their credit history.