31 Jan When Should You Get a Foreigner Loan
As a foreigner, any emergency that strikes can place you in highly unfavourable circumstances. Be it a road accident or an illness, you could be placed out of work for some time. During which, you will have no reliable source of income and yet still be burden with increased debt.
At which point, you will certainly need a sum of money to tide you over this unfortunate period. Yet, addressing your financial woes is anything but straightforward.
The need for a Foreigner Loan
Unlike locals, you will often not be able to simply take out a personal, medical or business loan. Instead, you will likely have to rely on a variation of the product, known as a foreigner loan. Foreigner loans cater to foreigners living and working in Singapore. You can simply think of it as a personal or cash loan intended for solving foreigners’ financial needs.
This type of loan is needed as mostly banks and other financial institutions will not extend personal loans to you.
Foreigner loan requirements and conditions
Foreigners have to undertake stricter eligibility conditions when requesting for a personal loan. In particular, you will need:
- An employment pass of 1 year validity
- 3 months’ pay slips
- An annual income of $40,000 to $60,000
- Residence tenancy agreement
- Employment letter form your current company
- Age between 21 to 55
These criteria are employed by financial institutions as a safeguard against bad debt. Afterall, when extending you a loan, these organizations take on the risk of you failing to pay back the loan. As such, it is natural that they take precautions against the chance of you choosing to flee instead of making good on the payment.
Getting a Foreigner Loan in Singapore
At this point, it is important to point out that plenty of entities offer foreigner loans. However, you should only solicit loan offers from banks or a licensed moneylender in Singapore. These institutions are regulated and thus ensure that you will not run into illegal trouble. In particular, you can expect:
- Reasonable loan interest rates
- Proper repayment schemes offered
- Proper debt collection procedures
No matter how attractive the terms from an unauthorised moneylender is, you should not accept them. These moneylenders operate outside of the law and thus may bring harm to you.
Interest rates to expect
Foreigner loans do indeed come attached with higher interest rates. You can expect these rates to vary between 3% and 10% per annum or even more. These rates are highly dependent on credit history and employment status. As such, when applying for a foreigner loan, you should prepare all documentation to prove your legitimacy in these two areas.
How long will you need to wait?
Upon applying for a foreigner loan, the financial institution will ask for the aforementioned documents. Thereafter, they will request for your credit score and report from a credit company. Should everything checkout, you can expect a loan approval within a day or two.
However, we should mention that every lender has different processing procedures. As such, you should research on the waiting time to expect from any one lender.
What to Consider when Comparing Loan Offers
As covered earlier, it is important to never accept a loan from an unlicensed moneylender. This will help to keep you safe from scams and harassment. Other than this, there are other factors to also consider:
- Interest rates
- Secured or unsecured loan terms
- Early repayment terms and conditions
Interest is charged by lenders for loans for two purposes. Firstly, it represents the risk and opportunity cost incurred by the lender in extending you the loan. Secondly, it allows the lender to remain profitable. As such, you can expect higher interest rates from lenders who are more sensitive to risk or when you have a less than solid case.
In essence, interest rates correlate to the overall cost of the loan. Higher interest rates translate to more cost on your end, subject to the time taken to repay the loan. As such, most lenders at the very least make a comparison of interest rates between loan offers.
Secured or unsecured loan terms
A secured loan refers to a loan that has a piece of collateral attached. Commonly in the form of a car or house belonging to you, the lender can seize ownership of them if you fail to repay your loan. Given that these properties offer a form of guarantee to lenders, secured loans typically come with lower interest rates. Conversely, unsecured loans required higher interest rates in order to encourage the lender to make you the loan offer.
Where no form of collateral is available, you may be instead requested to provide a guarantor. As the name suggests, the person acting as the guarantor of your loan will be liable for repaying it should you fail. In this way, loans with guarantors will likely have lower interest rates too.
Early repayment terms and conditions
As alluded to earlier, the longer you take to repay the loan, the more interest you will have to pay off. It is always in your favour to pay off your loan as soon as possible to avoid interest build up. However, naturally, this limits the profits of the lender from the loan. To meet in the middle, foreigner loans may contain early repayment penalties. Simply put, should you opt to pay off your loan earlier than the predetermined date, you would have to pay a penalty.
Trust JD Credit for Your Foreigner Loan
With a foreigner loan from JD Credit, you will be able to support your family overseas or settle urgent financial obligations without having to wait for your local salary to clear.
JD Credit is a licensed moneylender in Singapore with many years of experience in the industry. We are committed to achieving excellence by providing the best information and finest customer service. Our vision is to be a leader in the moneylending industry in Singapore. Contact us to apply for the best foreigner loan in Singapore today!