Auto Insurance

As the cost of living in Singapore have been going up steadily every year, many of us could be caught offside when some imperative matters surprisingly surface that need money. In these cases, it's cash that you may not have but you need to have.

So you decide to borrow money. Rather than encroaching on family, family and friends, you turn to banks and approved moneylenders for an individual loan.

Lending criteria for banks and approved moneylenders:

- For annual income of S$30,000 or even more, you can apply for borrowing facilities that grant you credit up to four times your monthly salary;
- For annual salary between S$20,000 to S$30,000, you can borrow up to twice your monthly pay;
- For annual income below S$20,000, you can only borrow up to S$3,000 from approved moneylenders at maximum 18% interest per annum;
- To borrow from banks, you must have a clean credit history, as it is the first standards they look at. So if you've not been regularly servicing your credit card bills or your hire purchases, then you are disadvantaged.

Nonetheless it is kind of difficult to borrow from licensed moneylenders, as they happen to be not standardised in their dealings. Each one of the 243 licensed moneylenders (as of 1 Feb 2012) has its own set of conditions for loans, and private loans are the hottest in their business.

Things to do before seeing any approved moneylenders:

- Budget your monthly take home salary and whittle it down to your expendable amount after accounting for all of your financing commitments;
- Derive the amount you can repay in full every month from your throwaway amount, having put aside some cash for savings.

Things to ask the approved moneylenders:

- The amount you want to borrow and whether they can give you;
- The rate of interest and how it is calculated;The repayment period;
- Any other extra charges and charges that may apply.

Things to consider in picking the most preferred moneylender:

- The repayment amount matches or is less than your figured out repayment amount;
- Understand all the conditions that the moneylender put forward;
- The moneylender's demeanour and attitude.

Things to note when signing the contract:

- The contract's content matches the oral explanation by the moneylender;
- The contract lists correctly the principal loan amount, the rate, the repayment period and the repayment sum due monthly;
- The moneylender passes you the full loan amount as concluded without taking any amount for any fee, if any, must be told to you earlier;
- You are warranted you'll get a dated and signed invoice for each repayment and/or charges, as well as a half-yearly statement from the moneylender.

On your side, you must:

- Promptly pay back all monthly payments;
- If possible, pay back your principal amount earlier, if there is no clause in the contract that prohibits it;
- Keep all receipts and statements of account for future clarification if required.

Don't borrow more than you can return and keep to your repayments strictly.