How Much Can I Borrow From Money Lenders?

Money troubles have a way of creeping up on us when we least expect it. One minute you’re breezing through life and the next thing you know, you have an unexpected expense that leaves your bank account in trouble.

So where can you turn for quick financial help? For thousands of Singaporeans, the answer is licensed moneylenders. That said, taking out a loan, even a small one, is a massive decision that shouldn’t be made lightly.

By now, you may be asking how much can I borrow from money lenders? and what regulations are in place to protect borrowers like you. You’re probably curious as well about how interest rates and repayment terms vary between different moneylenders.

What happens when you need cash fast? Your mind is racing for sure as you’re considering options. A money lender loan seems tempting, but wait – before you sign any contracts, there are things you absolutely must know.

Money lenders offer so many options and all types of loans have its own quirks and conditions. You can’t just apply for the first loan that you encounter – that may get you in trouble.

As expected, not all money lenders are created equal. Some are legitimate and licensed entities, while others are shady loan sharks or ah longs.

Always verify a lender’s credibility before engaging with businesses. Check if they have a license issued by the Ministry of Law and listed in the Registry of Moneylenders. If you encounter a lender pressuring you, those are major red flags and they could be an ah long.

Only take out a loan if you truly need it and have a plan for repayment such as a steady job. Do not borrow to fund frivolous expenses or worse, things you can’t afford. Needs over your wants should be your motto. And if you do take a loan from a money lender, be disciplined in repaying. Set aside the funds every single month and pay on time.

It’s finally time to address the burning question: how much can I borrow from money lenders? Well it depends on a few factors such as your income and residency status.

Nobody wants to be caught off guard by sky-high rates that leave you in shock. The maximum interest rate that licensed moneylenders in Singapore can charge is 4% per month. This applies across the board regardless of the income or whether the borrower is taking out a personal loan or emergency loan.

The 4% might not sound like much but when you’re borrowing money but every percentage point will affect you. The monthly interest charges can add up and be very heavy over time. If you miss a payment or two, brace yourself since licensed moneylenders can give you late interest charge as well.

Before you start celebrating, here are a few things to do.

Don’t just skim through this document no matter how complicated it may seem, but take your time to understand all the details.

Creating a repayment plan may seem like it’s not needed, but you must have this if you don’t want to fall behind on payments. Knowing how much you can realistically pay back each month for your loan will help you a lot.

There are lenders that offer the option to set up automatic payments from your bank account which can be a convenient way to ensure you never miss a due date. If this is not possible, set multiple reminders.

The reality is you may fail to make your loan repayments even if you try your best. If you ever go through this situation, don’t ever ignore the problem and hope it goes away. What you must do here is to reach out to your lender as soon as possible and explain your circumstances. Thankfully most money lenders are willing to work with borrowers who are proactive and honest about their financial problems and they may give you a modified repayment plan or temporarily reduce your payments until you get back on your feet.

There are so many horror stories of Singaporeans who ended up drowning in debt just because they can’t stop themselves from maxing out their loan limit even if they don’t need it. Don’t be one of these people.

Your emergency fund should be a non-negotiable since this will give you so much peace of mind when it comes to your finances. While it may seem overwhelming to start saving up for six times your monthly expenses, there’s no better way to approach it than to start immediately. Soon enough, you’ll find yourself completing this huge milestone and having more freedom when it comes to your money.

Knowing the answer to how much can I borrow from money lenders? is not enough. If you are a responsible borrower, you must approach borrowing with an understanding of your responsibilities. When you are disciplined enough, you can successfully come out of your hurdles with your finances intact.

If you ever find yourself wondering, “How much can I borrow from money lenders?” again, always check the limits and only borrow what you can comfortably afford to repay. Lender SG can help you get the funds you need quickly and safely.