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Are you Committing these Mistakes when Taking Personal Loans?

It’s common yet regretful to make mistakes when taking personal loans. Find out if you’re one of the people who fall into this trap.

People have different reasons why they apply for fast cash loans in Singapore. Unknowingly they make mistakes that may cost money and time. However, inevitable mistakes are easy to avoid. Read on to know and understand each, so you won’t make mistakes when taking personal loans like many others.

Top 13 Mistakes When Taking Personal Loans

1. Taking the First Offer

Take your time to do some research and shop around. You are the one who needs the money. So you need to shop around to avoid those who will take advantage of your needs. You might consider taking loans from a bank. But, it will take much longer since banks usually require a lot of paperwork. Instead, try a private legal moneylender that gives more choices with terms, interest and repayments.

The money lending business is a competitive market. Therefore, you will indeed find the best personal loan that will fit your need and ability to pay.

RELATED LINK: Where to Get the Best Instant Cash Loan in Singapore

2. Not Knowing the Credit Rating

You have the right to check your credit score because getting a loan considerably depends on it. So make sure that your credit score is accurate. Your lenders are the one who updates your credit history. So make sure they include the times when you repaid on time.

The credit score reflects your credit history. There are a lot of ways to keep it in good shape. These are avoiding too many loans, paying credits on time and not defaulting on a loan. With a good credit score standing, you may have your loans easily approved and get a lower interest rate.

3. Not going to Eligible Money Lending Company

There are a lot of lending companies floating on the web (see updated licensed moneylender list in Singapore), both illegal and legal. Therefore you have to be careful when choosing a licensed money lending company in Singapore. First, find out how long the company has been in the business. A tenured company means providing quality service enough to keep them in the industry.

Mistakes when taking personal loans in Singapore


4. Don’t Check the extra Cost

When it comes to personal loans, make sure that you add the additional fees and closing costs to the total price of what you need to pay. Look at the terms carefully and ask your licensed money lender if you don’t understand some parts.

5. Rushing through Fine Prints

There will be some terms that might add some costs if you are not careful. Avoid late payment penalties and prepayment penalties.

6. Getting Emotional

When borrowing money from a lender, think wisely and do not get carried away by your emotions. Do not get too excited. Get the loan that best fits your needs and financial status. If you borrow money to help a family member or a friend, that is not a good idea.

7. Fabricating Information

Never lie about your income and credit score. Your lender will have the means to counter check your info. You might be in deep trouble if you get caught by losing your loan and paying a large penalty.

8. Payback

Be realistic. Even though you have a steady income, you may think you can easily pay off a loan. Remember that there are still a lot of expenses, bills and needs to attend to. Budget the money well and pay your loans on time.

RELATED LINK: Best Instant Loan for Low-Income Earners in Singapore

9. Skimming the Terms and Conditions

Read the term and understand the words in them. Do not rush. Read the conditions and take note of certain specifics that might cause you to lose money and end up with bad credit.

mistakes when taking personal loans: skimming through terms and conditions


10. Not Asking Questions

It is fine to talk to your lender about some vague terms. Ask away. It could save your time and money. Let them know your personal case because they are most likely able to offer you the best loan right for your needs. Each borrower is a unique case. If there is a problem, it is better to let your lender know. Do not be afraid when they try to contact you. They just want to help you pay off the loan the way you have agreed on.

11. Borrowing Too Much

Make sure that you borrow what you can pay off. If you cannot pay off the loan, you might end up defaulting. Once defaulted, the interest rates will dramatically increase, and you might lose your assets. Your bank accounts will be seized and might get closed.

RELATED LINK: Singapore Loan Shark Scams to Watch Out

12. Not Negotiating

Many do not negotiate with terms and just accept what the lenders present. Usually, borrowers can deal with terms to avoid being financially constrained. Therefore, you are getting a loan to help with your financial needs and not add to your debt problems.

13. Unnecessary Over Extending

Some lenders talk the borrowers into extending their loans. Do not be tempted to do so if you do not need it. In addition, it will only make your credit score look bad. Plus, you will end up paying much more than you had borrowed.

People apply for immediate money loans for various reasons.

They may be single moms who are stuck on a budget, want to pay off debt, buy a gadget, go on vacation, try the best steamboats in Singapore or pay a medical bill, but all need extra cash. It is tempting to have a lot of money. But, do not open a loan if you do not really need it. Be serious with the repayment schemes and never hide from your lender. Loans are supposed to help you not overuse them.