A loan advisor explaining how multiple loans in Singapore can help you achieve home ownership.

4 things to know before taking multiple loans in Singapore

4 min

Getting a loan in Singapore today is faster, safer, and more secure than ever before. This borrower-friendly environment is partly the result of the government’s strict clampdown on illegal lending. The new rules on loans with interest have also encouraged many average Singaporeans like you to make a loan application.


The most obvious advantage of taking multiple lines of credit is that it will (generally) give you access to more money immediately. It may be the best way to go if you need a large amount of cash and no single lender is willing to give you the entire sum. With loan interest rates in Singapore being generally low, this can be a tempting choice.


But is it really a good thing? Should you take loans with low interest rates just because they are available? More importantly, should you take out more than one loan in Singapore at once? In this article, we take a closer look at whether you should make multiple loan applications at one go.


Consider these four factors before going into debt with several creditors.

1. It is a complex process

Finding the lowest interest rate loan in Singapore is not simple. Many licensed money lenders in Singapore offer loans with low interest rates. As a borrower, you will have to do a lot of homework to find the best deal. 


However, taking more than one loan is not just a matter of finding the lowest rate once and thinking it will stay the same. Each time a lender offers you a loan interest rate in Singapore and you accept, your next loan (even from the same lender) will often come with a higher rate of interest. You may want to calculate whether getting a single big loan will be better in the long run than multiple small loans.

2. It affects your credit score

The Credit Bureau of Singapore, the organization that determines your credit score considers numerous factors. Among those is how often you make a loan application and also how often you apply for a credit check. This means that your credit score can drop even if you have not defaulted on a loan in the recent past.


If you apply for more than one loan with interest within a short duration, it will become increasingly harder for you to apply successfully again. It will also make it less likely for you to qualify for other lines of credit like an overdraft account, credit card, or car loan.

3. It is harder to keep track

When was the last time you really looked at a bank statement or any other financial document? Most of us have trouble keeping track of our financial status because staring at pages full of numbers is not interesting, and it is even less pleasant when we are looking at how far in debt we are.


Things are no easier even if you get the lowest loan interest rate in Singapore for multiple loans. It will just increase the amount of paperwork that you have to deal with, and make it more likely for you to miss critical payment deadlines. Before you take multiple loans, ask yourself if you have the discipline to keep up with the increased responsibility.

4. It pays to plan

Almost everyone who takes a loan with interest from a licensed money lender in Singapore plans to pay it back on time. However, if you are applying for multiple loans, you will have to plan for contingencies. What will you do if you fall behind in payments?


Remember, if you do have to default or delay a payment, do it with the lowest interest rate loan in Singapore. Also, factor in late payment fees and admin charges that the lender(s) will charge. That way, you minimise the penalties that you have to pay and give yourself a better chance of recovering from a temporary financial setback.


So, how did you do? Will you be able to manage these four factors if you apply for more than one loan? 


Sometimes, the solution may not be multiple loans at all but a single loan in Singapore with the best terms that you can negotiate. The experienced loan consultants at Cash Direct are experts in financial management. Come in, speak to us, and we will help you to decide on the best course of action for your circumstances.