Everything you MUST know about getting a foreigner loan in Singapore
Working and settling in a foreign country can be quite challenging especially if you are traveling to a country far from your home. Countries like Singapore has one of the highest numbers of expatriates who come here to work every year.
Expensive and Lucrative Lifestyle in Singapore
Being among the top economies in the world mean that it is also home to some of the most expensive places globally. In fact, Singapore is among the most expensive cities in the world which means that if you are coming here to work, you need to manage your finance very well. In other words, you should have a substantial amount of cash in order to have a head start, especially in the first few months at least. How then should you start? Here are some pointers:
- It will be some time until you get your first-month salary, so it would be good if you have some savings to bring with you
- Get a loan – But having been here only for a few weeks, you do not have enough credit history for banks to justify their lending
- Registered Moneylenders – You can meet with the moneylenders and present your case.
- Get a foreigner loan – This is perhaps your best option as they are catered for expatriates who have just arrived here
Loans to get you started as expatriates in Singapore
There are many loans that are offered in the market for foreigners. These packages are designed to offer to those who come to Singapore either on a student or working visa. So, what’s the difference?
First things first, it is almost impossible for you (as a foreigner) to get a loan approved in the first few months. This is because you do not have the resources to support your application. In other words, besides your monthly salary, you might not have any collateral that can give the bank the confidence that you are capable of paying them back. Hence, you might want to consider getting a foreigner loan from moneylenders (registered).
Trust the Registered Moneylenders
Singapore, unlike other economies, have a structured and legitimate moneylending market. foreigners would be able to obtain a loan from moneylenders as this is easier to apply as compared to a conventional loan from a bank or financial institution. What you must take into account is that:
- You can apply for a foreigner loan as it is easier with lesser procedures (and less stringent)
- Interest rates could be higher considering the risk the moneylender is getting into
- Repayment period – For foreigners, this could be shorter because it might depend on the duration of your visa.
What you MUST to know about documentation?
Depending on who the moneylender is, the paperwork required for your application will differ. However, most moneylenders will need you to provide the following documentation:
- Your passport
- Work Pass
- Letter of appointment your employer
- Proof of income
- Travel documents like air tickets
If you are applying for a large amount, more documentation might be required. The moneylender might ask you for evidence of where you are staying as well as the credit history from your home country. Some might even require you to provide them with a letter of guarantee from your employer.
Exactly WHEN do you need a loan?
It is no doubt that Singapore is an expensive place to live in. If you are here on your own, the costs could still be bearable but what about if you are coming here with your family? Your cost might just skyrocket! The quality of life here itself is enough reason for you to come here and probably settle down. So, getting a good head-start would be extremely important. You will need a loan to at least get everything in order. This includes:
- Basic needs – A place to stay, acceptable attire for work and play, communication devices, etc
- Furniture – for your accommodation
- Schooling for your kids – This might be the highest in terms of commitment
- Transportation – Not getting a vehicle per se but to help you get around
When you approach the moneylenders, check their reputation and credibility, ensuring that they are registered and are legitimate. Then, approach them and have a conversation. Remember that there is no obligation in having such discussions. If you are not comfortable, then do not commit. You only decide to borrow money from them in the situation where you are able to accept the terms and conditions imposed as well as with the interest rate and repayment schedule.