Avoid These Mistakes When Taking Fast loans in Singapore
Unless you’re among Singapore’s crazy rich Asians, taking instant cash loans is inevitable. However, these swift financial solutions can also stimulate short-term and long-term problems. Pressing the wrong button while applying for fast loans in Singapore can mess up your credit score, win you mediocre loan deals, and tamper with your mental health. This is why we’ll be showing you four mistakes you should avoid when taking fast loans in Singapore in this article.
01. Don’t use a personal loan to have fun
Want to go clubbing in ZOUK, but you have no money? Feeling tempted to borrow some fast cash loan so you can give your friends a treat? Bad news: you’re halfway into a mousetrap. The thing is, washing away your high-interest loan in a tide of booze is akin to touching your eyes with poison Ivy. Please don’t do it!
While Singapore’s nightlife is inviting and serene, it majorly favors people who can afford it. Racking up debt for something that isn’t an emergency simply means you’re living above your means. In fact, loan experts affirm that using loans as a source of entertainment income can quickly spiral out of hand. These fun times are addictive, don’t generate any revenue, and are neither a matter of life nor death. One basic rule of borrowing is that you should only take fast loans for sorting medical emergencies, propping up businesses, and running household budgets.
02. Taking Lenders for a ride by lying
When applying for fast loans, you might be tempted to sneak in wrong information to strike a better deal. Well, we’re oblivious about how much of a whizz kid you are, but one thing we’re sure about is this: such tricks will blow up in your face. The thing is, lenders will smoke out your inflated income claims faster than you can say sing pass. Lying on loan application forms is generally an awful idea. Whether it’s keying in the details of a ghost employer, exaggerating your income, or claiming a residence you only dream of living in, it’s all against the law. When busted, your lenders can sue you on the grounds of fraud. And in Singapore, a fraudulent offense or forgery can get you locked up for up to 10 years. Not worth the effort if you ask us.
03. Extending your loan’s tenure
One issue that’s bound to come up is the life period of your loan. In other words: how long do you intend to take before you pay it off? Often, we see borrowers insisting on an extensive loan repayment period. Their reason being, the monthly installments are cheaper; hence they can pay their dues under less financial pressure: right track, but wrong train.
Any lender who has your best interests at heart will advise you to stick to a shorter repayment plan. Stretching out the repayment timeline means you’re accumulating more interest too. Interest is simply the price you pay to your lender when you borrow from them. This interest is usually charged monthly or annually, and it continues to accrue until the day you finish paying your dues.
For instance, let’s assume you borrow an educational loan worth $1000, and it charges an APR OF 10%. If you manage to erase the loan in one year, they’ll charge you a total interest of $100. And if you drag your payment over three years, you’ll be charged $300 worth of interest.
See? By choosing a shorter repayment timeline, you’ll save a huge chunk of your monthly income from disappearing into accumulating interests.
04. Rushing over the fine print
If you’re one of those people that checks the YES box even without reading terms and conditions, you’re in for some trouble. With instant cash loans, you have to know what you’re getting into before signing the dotted line. When your lender presents you with the loan document in the final review process, make sure you keenly go over its contents. Are there any extra fees besides the monthly payment? What are their recollection terms? Are the terms subject to change under any circumstance?
Knowing all this is crucial because it protects you from sneaky, predatory lenders. Some predatory cash loan providers may take advantage of your ignorance and switch up the loan terms without your knowledge. So to be safe, make sure you know all the relevant dates, terms, fees, rates, and other lender-defined requirements.
While getting a cash loan can be helpful, it can also be a bad idea if you’re careless. So make sure you avoid these four mistakes you should avoid at all costs when seeking fast loans in Singapore.