Top Guide On Where & How You Can Get A Wedding Loan From Licensed Moneylenders In Singapore
Weddings are magical moments filled with love, hope, and nostalgia. Nagging away at this romantic picture is a little thing called money problems. There are many costs to consider, such as the price of an engagement ring, wedding banquets and more. The cost of a wedding easily starts from $50,000 and goes up to $100,000.
Not affording your dream wedding can cause a lot of frustration, angst, and fighting. Times are tough, especially with COVID-19.
That’s not the way to start your marriage.
The most practical solution is getting a wedding loan. If you’re not sure where to get the best wedding loan or how to apply for one, we’ve got you covered.
This is the best wedding loan guide to help you. Find out what you need to do before applying, how much you can borrow, how to get the best wedding loan rates and the required documents. We’ll also discuss why wedding loans are better than using your savings, the maximum fees you can expect, and how to recognise illegal situations.
What Do You Need To Do Before Applying For A Wedding Loan From A Financial Institution?
Planning a wedding is tiring enough, following this wedding guide, it takes months and months of preparation for the big day. It just gets more taxing to have to worry about money problems.
To solve money issues, couples can choose to apply for the best wedding loans in Singapore.
The first thing before applying for a wedding loan is budgeting:
– Learn exactly how much money you have in your savings account.
– Write down everything you need for your wedding.
– Prepare a list with two or three potential costs for each item. For example, a wedding dress costs $5,000 if it’s branded, $1,200 if it’s bespoke and about $200 if it’s ready-made.
– Calculate your monthly budget, analysing your expenses and income.
– Deduct your expenses (including other potential loans) from your income to determine how much money you have for a wedding loan installment.
Once this is done, you know approximately how much money you’d need and the instalment that you’d afford to pay monthly without much stress.
Now it’s time to shortlist different loan providers.
Three factors to consider are:
1. Approval rate. Some licensed moneylenders have higher approval rates than others and, consequently, less bureaucracy. If you have a low credit score and income, you’ll need a more lenient credit provider.
2. Flexibility. Make sure the loan package you’re choosing can cover everything you need. That means ensuring the sum is large enough and that there aren’t hidden conditions about what you can purchase with that money.
3. Convenient repayment plan. You want a licensed moneylender who understands that reimbursing a loan shouldn’t be a back-breaking chore. So, discuss several repayment plans with the moneylenders you’ve shortlisted. Make sure they explain everything about installments, interest rates, and tenure.
To save time, you can get free wedding loan rates via our comparison tool here.
What Is A Wedding Loan, And What Can You Use It For?
A wedding loan is a sum of money you borrow from a bank or licensed loan provider to cover costs related to your wedding. You can use this money to pay for:
– Wedding outfits
– Religious ceremony such as the Guo Da Li Ceremony
– Wedding photography and videography
– Your honeymoon
– Beauty and styling
You can only use the wedding loan for wedding-related purchases; you can’t buy a new TV set or remodel your home with this money.
This is where the line gets blurry.
For example, you can include facial treatment for acne or permanent nails in your wedding budget, but some moneylenders can consider these things not-wedding related.
That’s why you should choose a like-minded and flexible loan provider.
But there’s another issue to consider:
Can I Still Apply For A Wedding Loan If I Have A Bad Credit Rating?
Yes, you can still apply for a wedding loan if you have a poor credit rating.
Not to worry, many financial institutions will still loan you a wedding loan even if you have a bad credit rating. They will only regard your current income and your repayment ability, not your past. They even have bad credit loans to help!
The catch is to choose your loan provider carefully.
Most banks in Singapore will not disburse wedding loans or any unsecured loans to people with poor credit. Their additional conditions include a minimum yearly income of $20,000-$30,000, citizenship, or a minimum sum you borrow.
Conversely, licensed moneylenders value your current ability to reimburse the loan more than your past financial actions. This leniency translates into less bureaucracy and more flexibility. This means that you can get the best wedding loan from flexible legal lenders in Singapore.
Pro tip: Obtain your credit report from Credit Bureau Singapore and double-check for potential errors. Also, if your credit score is low because of some utility bills you’ve forgotten about or a line of credit that you’re no longer using, solve these issues asap. That way, you’re showing your creditors you’re improving your money management skills, although your rating doesn’t improve on the spot.
How Much Can You Borrow From A Licensed Moneylender In Singapore?
You can borrow up to six times your monthly income from a licensed moneylender in Singapore if you’re earning over $20,000/year. If you’re making less than that per year, you can only borrow up to $3,000.
By comparison, banks in Singapore have more stringent conditions.
Some will ask for a higher minimum income of at least $30,000. Others will only approve a 4-times-your-monthly-income loan.
Or minimum loan amounts between $1,000 and $5,000.
The list can go on. However, the advantage with bank loans is potential access to more funds with lower interest rates, usually about 3-5% per year.
If you don’t qualify or don’t want to go through this painstaking process, a wedding loan from a licensed moneylender in Singapore is a practical alternative.
Legal lenders will offer the best wedding loan packages that meet your needs. It might come with a higher loan amount and longer loan tenures. The biggest advantage is the fast approval provided by licensed lenders. You’ll be able to get your loan in hours!
This begs the question:
Why Should I Apply For A Wedding Loan Instead Of Tapping Into My Savings?
A wedding in Singapore costs at least $30,000 – $50,000, and this is an estimation on the lower end. Let’s say you have that amount in your savings account.
If you spend it all in one go, you’ll be left with zero.
And so you’ll have no more funds for that HDB flat cash deposit.
Or renovating your apartment.
Or an emergency.
Now you’re probably thinking, why not solve these problems when they arise. You can simply apply for a personal loan or emergency loan when you need one.
Maybe, but chances are you’ll qualify for a smaller loan. One reason is that other financial packages, like emergency or renovation loans, have lower maximum caps.
For example, you can only borrow $30,000 for a renovation loan that doesn’t cover the entire home makeover.
Prepare These Documents Before Visiting The Moneylender’s Office
The required documents to apply for a wedding loan include:
– Proof of identity: NRIC, passport
– Proof of income: payslips/ bank statements/ CPF statements/ Latest Tax Notice of Assessment
– Proof of residence: utility bills, phone bills, renting contract
Some licensed moneylenders will only ask Singaporeans and permanent residents to provide proof of identity and proof of income. Foreigners may need to show additional bank statements, work permit or S pass, plus proof of residence. Conversely, some moneylenders may not approve wedding loans to foreigners at all.
Pro tip: Shortlist a few moneylenders. Double-check their eligibility conditions and required paperwork on their websites if minimum bureaucracy is essential for you.
Is There A Cap On The Costs Licensed Moneylenders Can Charge? How Much Can Licensed Moneylenders Charge?
MinLaw imposed stricter conditions for licensed moneylenders in 2015. Ever since they can only ask for the following charges:
– Maximum 4%/ month interest rate. This interest is calculated from the outstanding balance. So, if you’ve paid $3,000 from your $40,000 loan, the current month’s interest rate is 4% out of $37,000.
– Maximum 4%/ month late payment interest rate, based on your current installment and not the entire balance. If your monthly installment is $1,000 and you’ve missed the deadline, the moneylender can’t charge for more than $40 late interest.
– Maximum $60 late payment fee. By comparison, some banks can ask for a larger late payment fee or even early payment charges.
– Maximum 10% admin fee. Law-abiding moneylenders won’t ask for these costs upfront, but only when they disburse your loan.
When you total these costs, they cannot amount to more than the sum you’ve borrowed.
However, if you default on your loan and the moneylender takes you to court, the judge can ask you to pay the cost of the proceedings.
How Do I Know If I’m Dealing With A Licensed Moneylender Or A Loan Scam?
Some loan sharks expertly disguise themselves as authorised moneylenders to trick unsuspecting clients. Other Ah Longs simply appeal to Singaporeans who can’t afford loans for their dream weddings.
Remember that there’s always a better solution than borrowing from illegal lenders. Co-signed loans, personal loans, or simply relinquishing useless embellishments are just a few ideas.
Licensed moneylenders will abide by the law, and they are here to run a business as well. They will offer reasonable interests for their wedding loan packages.
Loan sharks will threaten, abuse, and extort you, and that’s not the way to start your marriage.
1. Refer And Check The Ministry Of Law’s List Of Licensed Moneylenders
MinLaw lists all the authorised moneylenders here, so check your creditor’s name on this document before getting any money from them. If the moneylender’s not listed, they’re likely a loan shark, so you should contact the police.
2. Look Out For The Form Of Advertisement By The Moneylender (Such As SMS, Phone Call)
MinLaw allows moneylenders to advertise their business on:
– Business directories
– Consumer directories
– Their website
– Their building
Any SMS, phone call, WhatsApp message, e-mail, or flyer is a red flag. That moneylender can be a loan shark or one who’s breaking the law. Report them to the Registry of Moneylenders.
3. Check The Interest Rate And Fees Offered By The Lender
Remember that licensed moneylenders can’t ask for additional fees apart from the ones we discussed above. Warning signs include:
– A higher interest rate for granting you a larger loan or because your income is lower
– Higher late payment fees and interest
– A pre-loan fee for approving your loan or for lending you more
– No fixed repayment schedule
– No fixed installment plans
4. Check If The Licensed Moneylender Has A Physical Address
Google any moneylender you’re considering to see if they have business premises.
Loan sharks don’t have physical addresses because they’re operating an illegal trade. Instead, they’ll set up meetings in informal places, such as your parking lot, in front of your home, or a café.
5. They Will Ask You For A Face-To-Face Verification
MinLaw demands that all licensed moneylenders do face-to-face verifications. So, even though you get your online loan request pre-approved via a phone call, you still have to set an in-person meeting at their office.
During this visit, the moneylender will explain the terms of the contract and will verify your documentation.
What Should You Take Note Of When Dealing With A Licensed Moneylender?
Even some licensed moneylenders can break the law. Report any case of:
– Withholding personal documents such as ID cards or credit cards
– Asking for your passwords
– Illegal fees
– Any form of abusive behaviour
– Not handing you a contract or receipts for your instalments
– Asking you to sign blank documents
So, What Should You Do When Your Wedding Loan Has Been Approved?
Once your loan has been approved, make sure:
– You get a signed copy of your contract.
– You pay for your installments according to schedule.
– You receive – and keep – receipts.
– You notify the moneylender if you’re unable to reimburse the installment on time.
– You report any form of illegal behaviour.
What Should You Do If You Are Unable To Repay Your Loan?
If you can’t repay the loan, the world’s not over. Many Singaporeans get out of this situation, but the keywords are honesty and accountability. Most licensed moneylenders in Singapore are very understanding of their customers’ situation. Debt consolidation and negotiations are available.
Here’s what you can do:
Speak To Them And Request For An Extension
The best licensed moneylender will be willing to listen to you.
For example, you may only ask to repay the interest for a few months. You can also negotiate a lengthier tenure and consequently more affordable installments.
Remember that a written plan with a corresponding budget increases your chances of securing an extension. If you need additional help, organisations like Credit Counselling Singapore will assist you.
File For Bankruptcy
If your loan is over $15,000, filing for bankruptcy stops accumulating interest and stops the moneylender from suing you.
However, this solution lowers your credit score and makes it virtually impossible to get another loan anytime soon.
In Conclusion: Applying For The Best Wedding Loan From Legal Moneylenders
Before settling on a licensed moneylender, there is one important thing to do. Please read their customer reviews to find out more about their service.
Wedding loans are affordable and flexible solutions to get your dream wedding. The key is to make a careful budget and to choose the right provider.
Remember to steer clear from loan sharks and always communicate openly with your loan provider. They’ll help you with flexible payment plans, so the only jitters you’ll have to deal with are wedding-related.