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When you haven’t attained financial freedom, it can be easy to take up loans. However, there are some considerations that you need to make before taking up a loan. When you need money you can easily fall victim to loan sharks. Therefore, consider being careful before agreeing to any terms. Also, you need to know how to differentiate between legit moneylenders and loan sharks who at times don’t even care about your well-being. They only care about you agreeing to take the loan and then demanding it aggressively afterward. To be on the safer side always take up a loan from a licensed moneylender like SU Credit company. Do thorough research to settle on the best moneylender with the best interest rate and repayment plan. 1.      Your Credit Score Your credit score or credit history gives any lender confidence that you can be able to pay up a loan on time without any kind of delays. The better your credit score, the better chances you have of getting the loans. Therefore, always strive to take up a loan from one money lending company and pay on time. At times, if you take up too many loans from different money lending companies you may be termed clumsy. The interest rate will increase with time, and you might even find it hard to pay it back on time. You can also consider debt consolidation to have all your debts in place and pay them one by one. Also, when you get a loan, always check the interest rate so that you can determine whether you can pay the loan on time to prevent loan defaults that will affect your credit score. If you have a poor credit score, discuss with the moneylenders to give you a loan regardless with enough evidence that you will pay on time. 2.      Current Income Before taking up a loan, check your income. Can you comfortably pay up the loan and have enough money left for your monthly expenses? If the money is too little, then consider taking up a smaller loan that will make it easier for you to pay it without straining too much. Also, if you have just lost your job, don’t take up a loan that you know you won’t be able to pay on time if you don’t get a job soon. You will also need to provide proof of income before you are given a loan. Therefore, ensure you provide enough proof for the company to trust you. The bank statements will play a huge role in showing your income range and the moneylender will have confidence in you. 3.     The Debt Payments Requirement It is vital to settle on the debt payments that you will need to make each month. Therefore, try and evaluate different licensed money lending companies and the repayment period they give for their loans and the interest rates. Most loan application processes are simple, and you won’t sweat when doing it.  You can choose from different loan types like personal loans, business loans, and unsecured loans. Also, try to check the terms and conditions on the website so that you don’t miss out on an important detail that may be used against you when you default payment. 4.      Interest Rates If possible, before you take up a loan try and use a calculator to see the amount that you will pay when you take up a loan of a certain amount. This is to prevent you from being caught off guard. Also, don’t be in a rush to just settle on a moneylender, do your research well to get the best deals in your region. Just ensure there are no hidden fees. Good money lending companies will show you the fees that you will pay upfront before getting the loan. So it will be easier to make a decision. Also, check the length of the loans to see whether your financial position will allow you to pay the debt on time. It also depends on your financial position. In the case that you took a student loan, you are assured that you will be given a longer time to pay the loan unlike when you get a loan when employed. Also, try to check whether the company offers any sort of interest discounts and at what point. 5.      Your Financial Situation Another thing to consider is your financial situation. What amount do you need to cater to your needs? It won’t be fair if you take up a loan that won’t cater to all your needs. Try to have a write-up of all your financial needs so that when you request money you get the whole of it. That’s why it is important to know how much you use in a month to make it easier to know the money you need for a certain period. Also, what are your monetary habits? Are you the kind who pays loans on time? This will help make it easier to pay for loans on time. Also, try to avoid excessive use of credit and maintain a low balance. Furthermore, always review the credit reports regularly and dispute any issues on them. Conclusion A moneylender always checks your credit, income status, employment status, debt to income ratio, the value of the collateral if you are taking up a secured loan, and any other assets. Therefore, if you have expensive assets, consider thinking twice before actually taking a loan that may make you lose a really valuable asset. These assets may include a car, home, business assets, and other valuable equipment. Therefore, always ensure you consider everything before approaching a reliable money lending company. Also, research is really important if you want to get the best deals and associate with an amazing money lending company.

People take loans for several reasons — from financial emergencies to medical expenses to home renovations to honeymoon budgets. If you’re taking a loan, it’s probably because you’re low on your savings. However, it should always be a kind of loan you are in a position to repay. When you take a loan, repaying it is usually the last thing on your mind. Even moneylenders in Singapore make your loan approval process quick and convenient these days. However, just because you get loans in Singapore easily doesn’t mean you can afford to be careless with them. While defaulting on your loan may look like an easy way out (thanks to the wrong portrayal in movies and shows), it is a major financial headache in real life. In all seriousness, not repaying your loan can affect your life goals. In this blog, let’s go over what happens if you don’t repay your loan in detail. 5 Serious Consequences of Not Repaying Your Loan 1.    Legal Proceedings You sign a contract when you get a loan, and that is a legally binding contract that holds you obliged to repay the loan. So if you fail to repay your loan, your licensed moneylender can take legal action against you. They can issue letters of demand from a lawyer or file a lawsuit suing you for the outstanding debt. Financial institutions usually initiate legal proceedings if they suspect you have the money to repay but are willingly becoming a defaulter. If your loan payment instalment is due for more than 30 days, you will first receive a legal warning. Institutions can take action against you sooner if they think you’re up to something fishy. 2.  Collateral Loss If you took a secured loan, such as home mortgages, car loans, or business loans, you pledged your valuable assets as collateral to the financial institutions. If you fail to repay your secured loan, moneylenders may seize your collateral to recoup their losses. 3.  Money Seized from Account If you take an unsecured loan, you don’t have to pledge collateral. Thus financial institutions can’t seize your assets. However, if you have money in your bank account, the institution can seize that and use it to repay your loan. However, it largely depends on the financial institution in question and the terms and conditions involved. Therefore, before you sign off on your loan documents, check the details and read everything. 4.  Employment Issues Your credit reports show everything about your loan history. If you didn’trepay your loans, it will show that. If your debt was written off and you didn’t settle it, the default will be on your credit report forever. Generally, potential employers cannot check your credit report. However, they can request to see it. Lately, finance companies have been doing so to ensure they do not hire people who are in debt or didn’t repay loans. It is either seen as a sign of irresponsibility or suggests your finances will affect your work efficiency. 5.  No Future Loans Banks go through your entire credit report before providing you with a loan. Unlike banks, moneylenders do not base your loan approval solely on your credit score. Still, failing to repay your loan can affect your probability of getting a future loan. Every loan application has to go through the Moneylender Credit Bureau (MLCB). It stores information, such as your borrowing limit, unpaid loans, and repayment history. The database will show your missed loan payments. If your data shows a long history of failing to repay your loan on time or still having outstanding debt, the moneylender is likely to reject your application. What Can Moneylenders Do? Loan sharks are quite prevalent in Singapore. Several times, people take loans from unlicensed and illegal moneylenders in emergencies. Since they have unusually high-interest rates, borrowers often fail to repay their loans. As a result, loan sharks take to illegal ways to get their money back. Therefore, it is vital to know what licensed moneylenders can do in case you fail to repay your loan. Have a look – Moneylenders can mail you a letter of demand for the missed instalments. They can visit your home (and as a last resort, your office) to deliver a letter of demand. During reasonable hours, they can try to contact you by phone or text message. They can take legal action against you. What Can Moneylenders Not Do? When you research the best moneylenders in Singapore, ensure you shortlist the licensed ones. Licensed moneylenders are governed under the Moneylenders Act. Thus they need to abide by certain regulations and laws. They cannot resort to illegal activities, unlike unlicensed moneylenders. Oftentimes, moneylenders hire debt collection agencies to collect money owed to them by the borrowers. However, even agencies have to comply with the regulations. Here is a glimpse of the code of conduct and good practices that licensed moneylenders and debt collectors have to comply with. They cannot – Try to injure you Intimidate, threaten, or harass you, and/or your family members Stalk you or your family members Assemble you unlawfully Damage or vandalize your personal property If you face any kind of harassment, you are within your rights to take action against the moneylender. You can – Report the moneylender to the police Complain against the moneylender to the Credit Association of Singapore Make a complaint to the Ministry of Law’s Registry of Moneylenders. We agree that all the consequences above make it look like everyone should stay away from loans. It’s true to a certain extent — loan repayment is not as easy as it looks. If you don’t have the money now, you need to map out how you will repay the loan. Therefore, before you commit to a loan, understand the basics of budgeting your expenses. Otherwise, you would land yourself in debt and possibly bankruptcy. Also, it’s vital to understand the difference between good debt and bad debt. Strategic use and proactive planning will help you sail through the