Working as an expatriate in Singapore comes with many opportunities, but not every day will be a walk in the park. Just like in any other progressive city, living in the Lion City can be expensive. Expats, like locals, can also encounter financial struggles during their stay. These financial problems may come in the form of unforeseen expenses, such as medical emergencies and home repair costs. Expected expenses like credit card and utility bills may also cause financial woes. Dealing with these obligations may be harder for expats since they have no family member to immediately turn to for financial relief.
While an expat can apply for a personal loan from a bank, the process may be long and difficult. In such desperate times, securing a foreigner loan might be the most viable option. Aside from banks, foreigner loans are now available in many lending institutions as a form of financial help for foreign workers who need to raise money within the shortest time possible. However, expats should be more discerning when seeking assistance from moneylenders as ending up with the wrong one might result in greater financial loss.
If you’re an expat who’s planning to get a foreigner loan, you may need to keep these tips in mind before you apply for one.
Check the authenticity of the moneylender
As a first-time borrower, you’re knowledge of the lending business may be limited, making you an easy prey for loan sharks. Before you apply for a foreigner loan, you need to make sure that you’re transacting with a licensed moneylender. To do this, you can check the official website of Singapore’s Ministry of Law for the list of licensed moneylenders in Singapore. The list also includes money lending firms with suspended licenses.
You also need to look out for activities that fake moneylenders usually indulge in. The following are some indications that a lending company may be illegal:
- Contacts you through SMS or email
- Keeps your NRIC card and other personal documents even after the verification process is completed
- Approves your loan over a phone call or SMS
- Asks you to sign a blank or incomplete contract
- Does not explain the loan terms and conditions in detail
Assess your ability to repay the loan
When you’re experiencing financial troubles, having to allocate your earnings among your expenses is difficult enough. Now that you have a list of legal moneylenders, the next thing you need to consider is your capacity to repay the loan. You can do this by enquiring about the current interest rates and repayment methods. You also need to check if the lending firms are charging origination fees, processing fees, appraisal fees and administrative fees. While these fees will not affect the interest rate, they will be included in your monthly payments. Once you have all the necessary information on your hands, you can compute and then compare your options. This will help you select which moneylender offers the rate that is most suitable to your needs.
Understand loan terms and conditions
A loan contract is a legally binding document so it is important that you understand its contents before you sign. Signing a loan contract means that you agree with the conditions and that you accept accountability in case you fail to comply with any of terms.
Once you get approved for a foreigner loan, your next responsibility is to settle your loan payments on time. Avoid making late payments to avoid penalties – unnecessary expenses that may lead you in deeper financial trouble.