Can A Self-Employed Person Get A Monthly Loan From A Licensed Money Lender?

Can A Self-Employed Person Get A Monthly Loan From A Licensed Money Lender?

Singapore has one of the highest household incomes in Asia. It is actually one of the highest in the world. Singapore’s unemployment rates are low. The nation also has one of the lowest poverty rates in the world. These indices make Singapore a great place to live in. However, the income gap between workers in the nation is broad. The lower-class income earners can’t afford certain comforts on their salary alone.

Borrowing money to supplement income is a normal thing. Yet, Singapore banks and Monetary Authority of Singapore make it hard for this class to access loans as they do not want the country as a whole to be heavily in debt.

Financial services offered by the banks tend to be for a certain class of people. If you are applying for a credit card or a loan, the criteria are pretty high.

For instance, you need to earn a yearly income of at least S$30,000 to apply for a personal loan. Personal loans are probably the most common type of loan in Singapore. Your monthly income has to be at least S$2500 to apply for a credit card.

For Singaporean entrepreneurs, these conditions are stern. University graduates can rest easy. Their initial wages start from S$3000 and above. Polytechnic graduates and blue-collar workers, however, may find this difficult to afford. Their educational levels are lower than that of university graduates. Their starting wages too will be lower.

Then you take into account the fact that many young Singaporeans are becoming entrepreneurs. Entrepreneurs have it the worst when seeking bank monthly loans.

Eligibility For A Bank Loan

Before you get a loan, you have to apply for it. The banks have certain criteria you need to meet before your loan will be approved. For a typical bank, these requirements include:

For Paid Workers

  • Front and back photocopies of your NRIC
  • CPF statement for the past 12 months
  • Most recent Income Tax Notice of Assessment
  • Original, printed copy of your most recent pay slip

For Self-employed Persons

  • Front and back photocopies of your NRIC
  • Income Tax Notice of Assessment for the past 2 years
  • Bank statements for the accounts you receive payment in, for the past three months

This is just part of what is required. The requirements for self-employed loan applicants are more stringent than those for salaried workers. Banks are not very friendly with entrepreneurs when it comes to loans. When you are a start-up it is much worse. This limits your options for applying for loans. But that doesn’t mean you are totally out of options. If you are in dire need of a monthly loan, you can go to a licensed money lender in Singapore to provide you with the initial funds you need to kickstart your business ideas.

Licensed Money Lender In Singapore

Money lenders are a legal lending institution in Singapore. Due to high loan shark activity, the government made some rules to curb their activities. To legally operate as a money lender in Singapore, they have to go through training and pass a test. Passing the test earns them an operating license.

All licensed money lenders in Singapore are registered with the Registrar of Moneylenders in Singapore. They are also part of the Association of Moneylenders of Singapore.

It is easy to get fooled by unlicensed money lenders, however. No matter how hard up for cash you are, do not:

  • Reply to any SMS from a money lender. A licensed money lender will never send you an SMS
  • Give a money lender your SingPass password over the phone
  • Answer to any money lending ads on the radio or television. Licensed money lenders are only allowed to advertise on their websites and their places of business.

Getting A Monthly Loan From Money Lenders In Singapore

Despite the facelift money lending has achieved in Singapore, people are still cautious approaching them for loans. However, licensed money lenders are safe to approach. Their activities are regulated by the Ministry of Law so that your interests stay protected.

For an entrepreneur seeking a monthly loan in Singapore, you can visit a moneylender. Their loan approval rates are fast. They give you instant cash loans to settle your emergencies. They have their own requirements for loan approval, but they are more relaxed than banks. Licensed money lenders can structure loans that suit your repayment abilities as well. This keeps you from getting overwhelmed with loan repayments.

Singapore has over 160 registered money lenders. Though all of them have a few similar requirements, they also have their differences. Basically, you will need to bring:

  • Your NRIC
  • Your SingPass token to log in to CPF or HDB for validation
  • Recent proof of employment
  • Recent income statement
  • An annual income of S$20,000

If you are self-employed, not a salaried worker, you can bring your income tax returns. These should be your most recent tax returns, like the last two or three years old. These can be used to assess the loan amount that you are eligible for.

For some licensed money lenders, the absence of a credit history isn’t an issue. As long as you can prove that you can repay the loan, they will lend you the money. 

Further Options For A Monthly Loan

To ease the stress of getting a monthly loan, there are other things that you can do. If you have something for collateral, you can use it to apply for a loan. A guarantor can also make it easy for you to acquire a loan. If you have some savings stashed away, using your bank statements can help. The money lenders can work with your bank statements to give you a loan. This is if you need a small monthly loan without using your savings.

You can also approach your family and friends for a loan that you promise to pay them monthly, interest-free. If the amount is negligible, you may find that your loved ones are more than willing to tide you over the troubled times.

Although personal loans are the most common loans to take, they are one of the most expensive. Hence, before getting a personal loan, you must have a quick repayment plan in mind so as to pay back the loan in the shortest time. If you are self-employed, getting a personal loan from the bank is almost impossible. Licensed money lenders in Singapore can help you. Provided you have some proof that you can repay the loan, they will lend you the money.

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