Questions you should ask before taking out a loan from pawnbrokers – Research Snipers

Financial emergencies can happen at any time in your life, and they have serious consequences when they do occur. Loans are the option of choice in such circumstances. You can either borrow from a bank or choose a lender.

Most people prefer to borrow money from a lender when they need short term loans. There are several reasons for this, including faster approval time, lack of collateral, and flexible credit history.

However, you should always borrow money from an approved lender like Credit A1 to avoid fraud or undesirable consequences. Borrowing from unapproved lenders can cause you to lose your documents, compromise your security and even put you in more debt.

But how do you know if an agency is accredited or not? What questions should you ask if this is your first time applying for a loan? What are the red flags worth watching out for? Keep reading to find out.

What. How to identify an approved lender?

Identifying an approved lender is not difficult, provided you know what to look for. For example, you can check the Pawnbrokers Registry list published by the Ministry of Singapore and if the agency finds a mention there.

Approved agencies will inform you of the entire process and seek your approval before proceeding. They will not ask you for your password or sensitive information unless required.

Genuine lenders also operate from their physical offices or through their official websites. They avoid cold calls or reach out to you on social media platforms like Facebook, Instagram or Twitter.

What. What should you check before taking out a loan?

Before borrowing money from a lender, it is useful to be aware of the various financial assistance programs with low or no interest rates. You need to understand the language and technical details of the contract and its terms and conditions and ensure that the lender gives you enough time to repay the amount.

What. Do agencies have a borrowing limit?

Most agencies have a specific limit on the money you can borrow. In most cases, they will allow you to borrow six times your monthly income if your income exceeds SGD 20,000. However, the lender will allow you to borrow more than your payment if you choose an unsecured loan (which comes with collateral).

The specific loan amount depends on factors such as your eligibility, legal requirements, current income and type of loan. For example, personal loans range between 500 SGD and 50,000 SGD, while business loans have a borrowing limit between 10,000 SGD and 2,00,000 SGD.

What. Do private lenders consider your credit history?

Most private lenders are quite flexible regarding credit history while granting a loan. While they won’t reject your credit application because of a bad credit rating, they may consider other related factors like your income.

You can choose monthly installment loans with a low credit score to repay the loans in the absence of high interest rates. It is best to discuss your loan needs with a specialist before making a decision.

What. What is the waiting period for approval?

The exact waiting period varies from agency to agency, but some will approve your loans in less than an hour in most cases. The significantly lower wait time is one of the main reasons why people prefer private lenders over banks. Approved lenders like Credit A1 offer you short term loans without complicated approval process or long waiting period. But before borrowing money, you must check if the lenders have a license and provide the necessary information before proceeding.

She works as a writer at Research Snipers.

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