At some point, you may have asked yourself, “What is the minimum income to borrow from a licensed money lender Singapore?”
Understanding the answer to this question is crucial, as it empowers you to determine your eligibility for a loan from a money lender based on your income.
Therefore, in this post, we’ll explain everything so you can make an informed decision based on your income and financial needs.
Why Income Matters to Money Lenders
Why is your income such a big deal to the moneylenders? Lending in and of itself is about risk. Therefore, before money lenders lend to you, they want to be sure you can repay the loan.
Your income is the most important barometer of your repayment ability. Notably, it is never entirely all about how much you earn but how secure your income is.
The Minimum Income Requirement by Every Money Lender Singapore
Every licensed money lender Singapore is controlled by the Ministry of Law, meaning they must observe a set of rules and regulations that favor borrowers. One of them is checking your income level to see whether it is sufficient to qualify for the loan.
It’s important to note that there’s no fixed minimum income requirement. This flexibility means that the minimum income requirement can vary from one lender to another, providing some reassurance in the borrowing process.
It depends on what type of loan you will apply for. Usually, though, all the licensed money lenders in Singapore would require at least S$1,500 a month for you to qualify for a personal loan. Overall, this will be some benchmark that, of course, the number of others fall in the higher or lower limits.
Of course, the bar is probably higher if you are a foreigner working in Singapore. By ‘foreigner ‘, we mean someone who is not a citizen or permanent resident of Singapore. Most lenders want foreigners earning at least S$2,000 monthly to get any credit or loan. This is because foreigners represent a somewhat greater credit risk to the extent that they sometimes lack years of continuous employment in the country.
What if Your Income is Below the Minimum Income Requirement?
If you cannot achieve the exact amount of profit, then that will not rule you out because others have been awarded loans from sources of other incomes or against certain assets on which this client may have ownership. For example, if you are self-employed or receiving this money by doing freelance work, then more documentation is required so that elaboration on his earnings can be evidenced.
It’s crucial to remember that borrowing, especially with a low income, carries a level of risk. You wouldn’t want to find yourself struggling to make repayments. If you’re unsure, it’s always wise to seek advice from a money lender offering financial advice or consider alternatives such as borrowing from family and friends.
How Much Can You Borrow from a Money Lender Singapore?
Your income dictates more than just whether you can borrow. It also dictates how much you can borrow. For example, the government limits how much people can borrow from licensed money lenders in Singapore. If your annual income is below S$ 20,000, you can borrow a maximum of S$3,000. If your income is at least S$ 20,000, that limit rises to six times your monthly income.
Bottom line
Based on the above, it’s evident that the more you make, the more you can borrow. But that said, just because you can borrow an amount doesn’t mean you should. It’s always essential to borrow within your means and have a clear strategy on how you will repay the loan without affecting your daily expenses or other financial commitments.
Lastly, if are considering getting a loan, shop for some reasonable interest rates other lenders are willing to provide. For instance, a reasonable interest rate for a personal loan in Singapore is around 4%. More importantly, borrowing responsibly above everything should solve your financial problem at hand and not inviting another one.