This Best Licensed Moneylender article aims to dispel misconceptions about personal loans from licensed moneylenders in Singapore.
Can I have more than one personal loan from licensed moneylenders?
Singapore is one of the most expensive countries to live in, being the third most expensive city to live in as reported from the Worldwide Cost of Living (WCOL) index that tracks personal finance statistics like standard of living and real wages relative to living expenses.
From job displacements to sudden hospital bills, unexpected cash needs compel even the most financially sound to take on personal loans to support their expenses. As COVID-19 threatens the stability we once took for granted, the question remains: “Can I take more than one personal loan?”
Personal loans are unsecured loans taken to support personal uses like education fees, bills, hobbies, and emergencies. Being unsecured financing, creditors do not have claims to your assets. As such, personal loans may be just what you need if you require fast cash for emergencies. If you are interested, you may learn more about the personal loans we offer here.
Well, can I take more than one personal loan?
The short answer is yes.However, do note that your financial standing will be put under greater scrutiny as moneylenders assess your debt servicing capabilities and loan quantum allowed. As much as we want to support your financial needs, licensed moneylenders must comply with legal requirements set by regulatory bodies like the Monetary Authority of Singapore (MAS) and the Ministry of Law (MLAW).
Beginning 1 June 2019 as per MAS guidelines, a person may only hold unsecured loans (credit cards, personal loans, and overdrafts) of not more than six times their monthly income. To illustrate, the maximum loan amount you can hold with a monthly salary of $2,000 would be $12,000.
As per regulations by MLAW guidelines in the Moneylenders Rules 2009, the maximum amount of loan we may disburse also varies depending on factors like your monthly salary.
Considerations before taking another personal loan
Although you can take up a second personal loan within credit limits, there are some questions and alternatives that you should ask yourself.
Before considering a second personal loan, you should take a step back and consider:
Do I really need this additional loan?
Well, this depends on the urgency and purpose of this second loan. Before taking up any new loan, this is a prudent question that every prospective loan applicant should ask themselves.
When the purpose of the loan is to support education fees or personal bills, a personal loan would be suitable as these are considered good debts. Covering a broad range of loans from education loans to business loans, these loans are taken to achieve long-term personal and/or financial goals like obtaining a degree or kickstarting a new business. As such, these goals (when attained) will create ample opportunities for the borrower to repay the loan.
Meanwhile, personal loans are considered bad debts when they are taken to support discretionary expenses. More often than not, these loans are taken for consumption purposes like buying the latest smartphone model or an expensive designer handbag. Besides spending beyond one’s means, these purchases are not likely to create opportunities for the borrower to repay the loan.
Although we have separated these loans into black-and-white categories, loans are never taken for the “correct” or “wrong” reason. In fact, loans are largely influenced by circumstances that drive the user to seek out a loan in the first place.
To illustrate, financing a Rolex with personal loans would be considered a bad decision in the broadest definition. However, the purchase could also be considered an investment for many. Though largely speculative, Rolex watches are seen as alternative investments as they are luxury assets that appreciate or maintain their value over a long period of time. Otherwise, these loans may also be taken to support your interests – if so, these loans may also be considered good debts as it would drive your happiness.
The point we wish to make is that personal loans can be taken for any purpose you desire, as long as you have the means necessary to repay the debt timely to avoid late interest charges, late fees, and damages to your credit score. However, if you lack the means to repay your loans timely – it may be prudent to consider alternatives to taking out a second personal loan.
Can I afford to make monthly repayments on time?
A common mistake made when taking up another loan would be overestimating one’s loan servicing abilities – often, we fail to take into consideration the lifestyle changes we have to make. Especially so for the younger demographic, statistics published from Credit Bureau Singapore (CBS) reveal that unsecured loan amounts increased by ~23% in 2021 alone. For borrowers aged 21 to 29, loan balances increased from $34,941 to $49,689 in 2021 – a 42% increase from the previous year.
If you truly decide to take up a second personal loan, you may have to adopt alternative lifestyle arrangements like cuts to discretionary spending on restaurants, hotels, and entertainment.
Are there any alternatives?
When you are not sure on the type of loan you need, Best Licensed Moneylender Pte Ltd offers a variety of loan services to fit the varying financial needs of its customers.
If you have questions on which loans are appropriate for you, please feel free to contact us or come down to our office so that our highly experienced customer service staff can advise you. Otherwise, we have prepared a few loan services for your consideration. At Best Licensed Moneylender Pte Ltd, we strive to live up to our name for customers like yourself.
Depending on your financial circumstances and cash urgency, you may also consider:
(1) Payday Loans
If your cash needs can be satisfied promptly within your next salary, you may want to consider a payday loan. With Best Licensed Moneylender Pte Ltd, taking up a payday loan saves you on interest as payment is pegged to your salary date.
If you’re interested, you may want to read up on another article written from us about payday loans.
(2) Debt Consolidation Loans
If you have too many unsecured loans across your credit cards, overdrafts, personal loans, you may also be interested in consolidating all loans into a single arrangement. Instead of troubling yourself with multiple repayment dates and amounts, you can make repayments to a creditor you trust – us!
Rest assured that by consolidating your loans with Best Licensed Moneylender Pte Ltd, we will be there for you at all times to provide support as a customer-first moneylender.
If you have questions, you can always refer to our contact page and we will assist you with your queries.
