Introduction
Are you looking for a loan and wondering how effective the interest rates of moneylenders in Singapore are? You’ve come to the right place.
We’ll show you why moneylenders should be considered an alternative to banks, which can also be risky when getting a loan.
Interest rates offered by moneylenders depend on your credit history and financial situation.
If you are looking to borrow money, the interest rates offered by moneylenders in Singapore depend on your credit history and financial situation.
If you have bad credit or debts that have not been repaid, you can consider legal moneylenders, as they usually offer higher interest rates than banks.
Find out what factors influence interest rates here.
It’s important to understand that the interest rates of moneylenders are not fixed. Instead, some factors influence the final rate you will be given. These factors include:
- Your credit history.
- Your financial situation.
- The amount you’re borrowing and the duration of your loan (personal or business). For example, if you’re borrowing a larger amount for a more extended period than someone else with similar financial profiles, your interest rate will likely be higher.
- The type of loan (personal or business). Business loans generally carry higher rates than personal ones because they pose more significant risks for lenders due to extended repayment periods and lack of collateral security (such as property title deeds).
If you have bad credit or debts that have not been repaid
If you have bad credit or debts that have not been repaid, you can consider legal moneylenders, as they usually offer higher interest rates than banks.
However, if you happen to have good credit, there are also other options available for loans. Banks like OCBC and UOB usually offer loans with low-interest rates and flexible repayment plans.
Depending on your needs, they may provide different financial products, such as personal loans and credit cards.
As with any loan, you must understand the terms of borrowing before committing yourself to one so as not to end up in a situation where paying off the debt is difficult or impossible.
Alternatively
Alternatively, find a cosigner with a good credit history and past repayment records, so your interest rate may be lower than usual. This helps you to qualify for the loan even if your credit is not good enough.
You can also look for moneylenders who offer lower interest rates than banks. The reason is that they are riskier to lend to, so they need compensation with higher interest rates and fees.
Check out this infographic on how effective the interest rates of moneylenders in Singapore are.
When you take out a loan, the moneylender will usually know how much they can lend you based on your credit history.
Your interest rates will be lower if your credit history is good regarding loans and other forms of debt.
According to data from MoneySmart Singapore, the average interest rate for car title loans in Singapore is between 20% and 30%.
Conclusion
If you have bad credit or have had debts that have not been repaid, you can consider legal moneylenders, as they usually offer higher interest rates than banks.
Alternatively, find a cosigner with a good credit history and past repayment records, so your interest rate may be lower than usual.