How P2P Lending Works In Singapore

BY DEFINITION

P2P Lending, short for Peer-to-Peer lending, took off in 2005. It sprung due to many companies’ efforts to deviate from the financial institutions that let them borrow money. Borrowing from banks took about two to three years’ worth of records. And, many companies do not have the luxury of time. Instead, they turn to the Internet for help.

P2P websites allowed private people from around the world to lend money to various companies. For instance, you can lend S$100,000 to a company requiring money for an expansion. In return, you will receive repayments with interest from the company. P2P lending is very attractive to lenders due to the extremely high interest, which is up to 20% per annum.

SINGAPORE: THE ASIAN CENTER

Singapore reigns as a the Asian center for P2P lending due to being a regional hub for trading, a safe storage of precious metals, and a well- established economy. Singapore is appreciated for its direct approach to lending and borrowing as supervised by the Monetary Authority of Singapore. It even issues promissory letters.

Moreover, Singapore has a cash-intensive economy where a great deal of lending happens outside of the banking system and inside of the online platforms.

HOW TO START LENDING

Take Part In A Larger Portfolio

A well balanced portfolio has a mix of low-risk assets and high-risk assets. By nature, P2P lending is a high-risk asset that invites high returns. It can be used to offset the low returns from your conservative assets such as fixed deposits or Singapore Savings Bonds (SSBs).

Seek help from a qualified wealth manager to balance out your portfolio. As a rule of thumb, experts suggest that high-risk assets should not take more than 15% of your portfolio.

Invest On What You Can Afford To Lose

One of the leading advantages of investing in P2P lending is that you can take on small amounts. You can have various investors pitch small amounts of S$1,000 to fulfill your business goals.

Limit your potential losses by investing only what you can afford to lose. Do not gamble your savings away! Any amount that you cannot recoup within two months is too much.

Spread Out Your Investments

Try not to bury your eggs in one nest. As much as possible, choose to spread out your investments in a list of companies found in a P2P website.

If one company fails to repay you, the rest can do better for your account. It is less likely that every company you chose will fail to repay you. Furthermore, a company may repay you less for a long period of time. You have to get some cushion.

Sources: 1 & 2

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Don’t Make These 5 Mistakes When Applying for a Mortgage

A mortgage represents the most expensive form of credit most people will ever apply for. With house prices well above £200,000 in many locations, taking out a mortgage means taking on a sizeable debt that will take decades to pay off. As such, borrowers have to be very careful about what they do.

The good news about mortgages is that there are plenty of them readily available. The bad news is that it is easy to make costly mistakes. Recognising such mistakes is the first step in avoiding them. The second step is to employ the right strategies that guarantee things work in your favour.

Are you planning to buy a house soon? If so, do not make these five mistakes:

1. Going Directly to a Bank

Banks are the first institutions’ many people think of when it comes time to apply for a mortgage. However, going directly to a bank virtually guarantees not getting the best deal possible. Here’s why: financial institutions only offer a limited number of mortgage deals that are designed purposely with their needs first.

You might go to a bank or building society and discover you only have access to two different mortgage products. What if neither product is right for you? Even worse, how do you know that either of those two deals is really the best you can get? You have no way of knowing because the bank or building society has no incentive to look out for your best interests.

What’s the solution? Avoid banks and use a dependable mortgage brokerage instead. Independent mortgage brokers represent multiple public and private banking institutions as well as third-party lenders. If there is anyone capable of finding you the best mortgage for your circumstances, it is an independent broker.

2. Accepting an Interest-Only Mortgage

Interest-only mortgages may represent a way to get into your dream house without taking on monthly payments you cannot afford, but there’s a catch: paying only interest with your monthly payments means you are not paying down the principal. That is not a problem until you come to the end of the loan at which time a balloon payment is necessary.

If you are taking out a £100,000 mortgage with interest-only payments, are you going to have enough money to pay what you owe on the loan’s maturity date? If not, you are either going to have to take out a new mortgage or sell your house.

3. Obsessing Over Interest Rates

Do not make the mistake of obsessing over interest rates, either. Yes, interest rates are important in determining how much you will pay to borrow. But they are not the only thing to consider. Remember that lenders advertise annual percentage rates (APRs) as opposed to straight interest.

An APR represents the total cost of borrowing over the life of a mortgage. It includes interest, closing costs, application fees, and so forth. It is more important that you concentrate on APR than interest rates alone. Your goal is to get the lowest possible APR on a loan with terms that suit your circumstances.

4. Mortgaging More Than 75%

It has long been understood that home buyers will put down a certain percentage of the purchase price on a home as a deposit. The size of a deposit can vary, but the general rule is to put down 25%. Whatever you do, don’t make the mistake of putting down any less.

A deposit of less than 25% means you are mortgaging more than 75% of the value of the home. Why is this bad? There are several reasons, beginning with the fact that you will end up paying more interest for every pound you borrow. Coming in with a 10% deposit as opposed to 25% means you will be paying a lot more interest.

Mortgaging more than 75% also makes you a higher risk to lenders. That means you will get less favourable rates and terms. Also, note that higher mortgage amounts reduce the number of lenders willing to loan to you. This means you’ll have fewer deals to choose from.

5. Exceeding Your Established Budget

Finally, do yourself a favour and commit to not exceeding your established budget – not even in the slightest. Be prepared that your estate agent might show you houses that are above your budget with the hope of getting you to spend more. Don’t do it.

Exceeding your budget, even by a little bit, could cause serious financial problems down the road. You could stretch yourself so thin that the slightest financial emergency prevents you from making your mortgage payments. Miss a few mortgage payments and you could be in line for repossession.

Also, keep in mind that committing to your budget might mean that you cannot find a house you really like. That’s fine. You are better off waiting until the market improves or you have more money saved. You can never go wrong by not spending money. On the other hand, you can go terribly wrong by spending more than you have.

Now you know what to avoid when it comes time to apply for a mortgage. Good luck in your house search. Hopefully, your estate agent and mortgage broker can work together to get you into the home of your dreams.

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4 Reasons Why You’re Stuck In Debt

Are you drowning in yesteryear’s debt? You are probably pessimistic about your financial future. Eventually, all these bills may push you to your boiling point. When this happens, a fresh start is essential.

Start by being aware of the reasons why your pile of debt exists. Then, do the necessary actions to eliminate it.

YOU ARE ADDICTED TO SHOPPING

Whether you call it shopping addiction or retail therapy, you simply cannot control your spending habits. It is harmful to associate your power and confidence with material possessions. Acquiring a new designer purse may give you short-term happiness, but its price tag may bite you in the long run. At some point, your addiction may turn into financial piles of debt.

Furthermore, our society has a skewed view of what we can afford. For instance, it encourages you to purchase something as long as you can pay off the minimum amount (i.e., when purchasing a car). This mindset may take you to financial regret. You will end up spending more on a monthly or quarterly basis. Instead, do not buy things that you cannot pay for in cash.

YOUR PARTNER IS NOT ON-BOARD

Mixing finances with relationships is complex, especially if you do not see eye to eye. Differences in spending habits and financial beliefs may cause conflicts when not addressed. One of you may be fully committed to being debt-free and practical, while the other spends carelessly. To make this relationship work, you and your partner must come to terms.

In matrimony, it is solely not your money or “their” money. It is “our” money and “our” debts. You are on the same team. Please start acting like one! Plan how you will pay off each other’s debts per month.

YOU ARE UNWILLING TO SACRIFICE

One of the quickest ways to reduce debt is to cut down your expenses. If you are unwilling to sacrifice some of your wants, you will not be able to thrive. How could you possibly justify eating out four nights a week? Do you really need a cable and Netflix subscription?

When stuck in debt, you must be willing to make temporary and permanent lifestyle changes. Ask yourself on what you are willing to give up in order to build a better financial future. Or, you may start by eliminating temporary expenses.

YOU WANT TO KEEP UP WITH OTHERS

Sometimes, the social circles we expose ourselves into can dictate how we lead our lives. Constantly keeping up appearances or doing things for Instagram posting may be costly!

Image Credits: pixabay.com

Yes! Your friend just had a Euro trip with her boyfriend. However, that does not mean that you have to sacrifice your credit to do the same. Following the lifestyle of others may lead you to debt or bankruptcy. You know your financial limitations more than anyone else. Be your own critique when it comes to your spending habits.

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Tips for a Debt – Free Future

Many individuals begin their educational career repeating this mantra over and over: “I will not accumulate debt. I will not accumulate debt. I will not accumulate debt.” No matter how many times you say it, it still doesn’t change the fact that a large percentage of individuals find themselves in debt for most of their early adult years.

Investing in your education and career early on can be the difference between a long, beautiful career, and a series of short-term jobs that you “settle” on. But getting to that long-term career can be incredibly difficult when you are living with debt. This debt can come from a loan taken out to finish a master’s degree, or to open up a business, or a myriad of other things.

There are ways to avoid and subvert these debts that stick with you for years after your educational career ends. Here are some of the top tips compiled to help you live your adult life debt-free.

  1. Let Your Money Earn Money

One of the surefire methods of securing financial success is investing in yourself, which is a phrase I use to describe the act of putting money in a bank account. Taking out some low-risk investments to grow your money gradually is a great way to keep up with interest rates that are simultaneously growing your debts.

By putting your money into an account, you are able to let your money earn money for you. Saving while leading up to taking out a loan can be a great way to set yourself up for being able to pay off the loan in a timely manner. The more money you are able to save, the more that money can earn for you over time.

  1. The Benefits of Stock Loans

You’re obviously going to do some research when you take out your first loan. You’ll want to take out a loan without exorbitant interest, but that can still support the amount and duration that you need in order to effectively use that money to secure your future or your education.

Many who would like to make investment decisions risk losing money if those investments fail. This is why they make use of stock loans. With companies like Easy Stock Loans, investors can put up their stock as collateral in order to make more investments and increase their revenue without having to spend or risk defaulting on the loan.

You can find more information on the Easy Stock Loans website about how to make financial moves using your own stock as collateral. You could be making more money without even having to lift a finger!

  1. Work Smarter AND Harder

Many university students get themselves a job in order to offset the cost of tuition and fees for their education. These jobs though can end up exhausting them, resulting in less successful grades and results. The outcome is that their post-grad prospects don’t look as stellar. These jobs are also often by-the-hour jobs, meaning that better work doesn’t necessarily equal more money.

Finding a salary or commission job while in school is difficult, but not impossible. This step is a huge investment in your future, and an asset to your education and finances. Online and remote work is one of the best ways to do this. Working online also means that you can choose your own schedule, so you can work around your schoolwork and obligations.

A Debt-Free Future

While it may be difficult to utilize every opportunity to save money and remain debt-free, even just implementing one of these things can make your life much easier in the short and the long term.

You shouldn’t have to live with overwhelming debt as the price to pay for a good education, a leg up on your future, or a new business venture. We know how hard it can be to feel secure in your finances, but these few simple steps are a start toward a brighter future.

 

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5 Qualities of a Reliable Personal Loan Lender in Singapore

Nowadays, it’s easy to find a personal loan lender that can give you the financial boost that you need. However, not all Singaporean lenders have the same policies and attitudes. Some lenders are invariably better than others. To find an exceptional lender, you can benefit from a list of qualities to look out for.

Here are the Top 5 qualities of a personal loan lender in Singapore

Empathy

You may think that empathy is reserved for humans and some animals. But on a greater scale, empathy is a quality practiced by organizations, groups, and affiliations. Lenders are included among these categories. An empathetic lender doesn’t have to ‘feel’ your pain, but he must be willing to understand your situation if ever you cannot pay on time.

Of course, as a borrower, it is your primary responsibility to repay the loan without fail. Still, some life situations are uncontrollable and your finances might be affected. By looking for an empathetic licensed moneylender in Singapore like Cash Mart, you will definitely have a better time.

Excellent Customer Support

Every sector in the world today needs a reliable customer support platform. Without such platform, a company or organization will lose the trust of clients. A lending company’s customer support platform can be measured by its response speed and on-point assistance.

If a lending company keeps you waiting for nothing, dump it immediately. You are a customer or client who needs to be assisted as soon as possible.

To find the best lender with excellent customer support, you have to rely on reviews. You can find these reviews on social media pages, directories, online lists, and other community channels.

Be diligent about scouring for reviews because they are the main determiners of finding a lender with excellent customer support. You can even get a head start by gathering opinions from your friends and relatives.

Fast Transaction Process

Time is very important in this fast-paced world. A lender that doesn’t value your time shouldn’t be included in your list. Apart from customer support, the lender must have a swift transaction process that takes less than 24 hours.

If you’re certain that your credit status is okay, the personal loan lender should give you pre-approval right away. Keep in mind that transaction processes differ; bigger and more complex loans take a longer period for approval. Some of these complex loans are small business loans, corporate loans, auto loans, and other credit programs.

To find a lender with a fast transaction process, check out Facebook pages. Very likely, satisfied and dissatisfied borrowers will leave their remarks on a lender’s page. This is a great source of information that can help speed up your search.

Rewarding for Borrowers

Great lenders know how to extend their positive will and appreciation through rewards and special treatment. While lenders are not obligated to offer special rewards or incentives, doing so can make a huge difference.

Having rewards is a clear indicator that the lender is ready to go beyond the call of duty to serve the borrowers.

Aside from looking for lenders that offer rewards and incentives, you should figure out the types of rewards that they are doling out. Some lenders offer fees that will go down significantly depending on your credit score and reputation.

If you are a good payer, the lender might be considerate enough with the fees. To maximize your time and options, look for rewards that match your financial priorities.

Reasonable Fees

No sane borrower would want a loan that has outrageous interest rates and service fees – unless there’s a future bargain to be made. Paying back a loan is already a difficult ordeal. You don’t have to make it harder by securing high-rate loans!

So, you should bear this quality in mind: reasonable pricing. The lender needs to make money, but it doesn’t need to drain borrowers further. In order to find such a lender, you may need to analyze a directory of the most active lenders in your area.

Start comparing their rates and figure out which one is a great fit for your budget. Small business owners are also great sources of information. There’s a big chance that these entrepreneurs have applied for loans with acceptable fees. It wouldn’t hurt to ask them at all.

A Gentle Reminder

The aforementioned qualities are great points to consider, but you should also take a glance at hard data. You can find streams of data from social media, forums, and other communities. By combining reviews and raw numbers, you might be able to find the best payday loan in Singapore that matches your expectations.

Conclusion

It’s always beneficial to look for a lender that has the mentioned qualities. Consider the qualities as positive flags that will help you separate the best lenders from the not-so-good ones. Once you’ve pinpointed a lender that practices positive qualities, it’s time to send your loan application over!

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