The industry in Singapore has continued to provide a crucial role in extending short term and low value loans to individuals especially at times of financial hardships and emergencies. However, identifying the ideal lender to finance your loan is important as it may save you a lot in terms of costs and convenience. If you are considering taking out a loan with these loan providers, then the 4 considerations below may help you in choosing the right financier.
- Licensed Provider – The government of Singapore requires every loan provider to be certified by the Registrar of Moneylenders and to adhere to all rules and laws that govern this lending industry. You can find a list of all certified lenders at the official Singapore government website – ipto.gov.sg.
- Interest Rate – The law requires all Singapore loan providers to clearly provide the Effective Interest Rate (EIR) which takes into considerations the value of compounding thereby giving a clearer indication of how much the loan will cost. The government also caps the maximum amount of interest that can be charged to low income earners. For people who earn below $30,000, they can only be charged a maximum EIR of 13% for secured loan and 20% for unsecured. However, different lenders will charge differing interest rate within this cap.
- Other Fees and Charges – Besides the interest rate, a loan provider does charge other fees. These include late payment fee, fees for varying a loan contract, recovery charges and early loan termination fee. You also need to review such fees so as to ensure that your lender charges reasonably low charges.
- Quality of Service – Another important consideration is the quality of service provided by the loan provider. You can make a call to the lender or pay a visit to gauge the level of customer service provided. You can also research through customer reviews to get to a lender who is professional and effective in loan provision.