Watch out for advertisements promising quick paperless loans or claiming "blacklisted welcome to apply." These are typical signs of loan sharks operating illegally. They charge extreme interest rates and often use threatening collection methods, trapping borrowers in endless debt cycles. If a bank has declined your loan, it means they believe you cannot afford repayments – this is a sign to seek financial advice, not turn to illegal lenders.
Only borrow for assets with lasting value, such as:
Property purchases (HDB/private)
Essential Home Improvements
Necessary Vehicles
for Work
Major Household
Appliances
It's unwise to take loans for daily expenses, entertainment, or items you can quickly
consume. Instead, these should be covered by your regular income or savings.
Take a close look at your financial situation by reviewing your income, current expenses, and existing
obligations. Calculate how much you can realistically repay each month. The best protection against
unnecessary borrowing is having an emergency fund – aim to save something each month that you can
use when unexpected expenses arise.
When borrowing, always ensure you:
Watch for these warning signs:
Using more than 40% of monthly income for debt payments
Borrowing for basic expenses
Regularly missing bill payments
Unsure about your loan terms
Don't hesitate to reach out for help if you're unsure about your borrowing decisions. Contact Credit Counselling Singapore or speak with your bank's financial planning services. They can help you evaluate your options and create a sustainable financial plan.
Remember , if you cannot make your loan payments, contact your lender immediately and be honest about your situation. Most licensed lenders will work with you to find a manageable solution.
