Why do you need finance?
The obvious answer is to fulfil your personal or business requirements. Everyone is looking to get loan, either you are looking to fund your education, buy a home, meet business expenses or buy a car. Whatever the reason would be there is dire need of funds to fulfil your needs and dreams. To take loan from bank or any other source is a big liability and of course a major responsibility. Once you have taken loan, you have to pay back it within given time period. That’s true in every sense that getting loan will affect your lifestyle both ways (positive and negative). There are many things that one should consider while looking to take up a loan in Singapore. These are few questions that you must ask yourself before getting a loan.
What is your credit rating or credit score? You should consider this first before applying for loan. This will affect the amount of loan and your cost in future. If your credit rating is low then you should try to improve it first and then apply for a loan. Pay the debts and get the credit score increase and make timely payments.
Is loan secured?
You shall also give consideration to security. Is your loan secured or not. Mostly banks and legal money lender are giving loan against something kept as security. Keep in mind that whatever you are going to pledge against the amount of loan, the bank will have option to sale it in case you didn’t pay back the amount of loan.
What will be the interest rate?
What will be the rate of interest against the amount of loan? The rate of interest will depend on time period of loan an amount of loan. The higher rate of interest means that you will be bearing more cost. Payday loans and mortgage loans are considered as low interest rate loans. Make all calculate before taking up a loan from a licensed money lender.
What will be the repayment schedule?
You have to give consideration to payment schedule. Are you taking short term loan? If yes than the amount of loan you have to pay back with interest will be higher and you have to pay back this loan in short time. Higher time period for loan means that monthly payments will be less but higher rate of interest will make this loan costlier.
What will happen if you are unable to pay back?
What will happen to you if you are unable to pay back the amount of loan in give time period? You shall give consideration to this as well. What will be the penalty, what will happen to your collateral and security in this regard? You need to keep everything in mind before making a final call to take up a loan. To conclude we can say that, a loan is a big responsibility, you have to apply for a loan if you have solid plan to make payments on time. Otherwise you will be in trouble.