Taking multiple loans in Singapore

Four Things To Know Before Taking Multiple Loans in Singapore

4 min

Getting a loan in Singapore has never been faster, safer, or more secure. The government’s strict clampdown on illegal lending has partly led to a more borrower-friendly environment, while new rules on loans with interest – such as the introduction of aggregate loan caps and the provision of a self-exclusion framework – have also encouraged many average Singaporeans to consider loan applications.

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

But is it really advisable to take loans with low interest rates just because they are available? And more than one loan at the same time? In this article, we take a closer look at what you need to know before making simultaneous multiple loan applications.

Here are four factors that you should consider before taking multiple loans in Singapore:

1. It is a complex process

It is not easy to find the lowest interest rate loan in Singapore. Many licensed money lenders offer loans with low interest rates so you need to do your homework to find the best deal.

However, it is important to note that when taking multiple loans, the process goes beyond just simply finding the lowest interest rate. Each time a lender in Singapore offers you a loan interest rate and you accept, your next loan (even from the same lender) will often come with a higher rate of interest. Always make sure that you calculate the cost of a single big loan vs. taking multiple small loans.

2. It affects your credit score

The Credit Bureau of Singapore considers numerous factors to determine your credit score. 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 recent times.

If you apply for more than one loan with interest within a short duration, it will become increasingly harder for you to successfully apply again. It will also make it less likely for you to qualify for other lines of credit such as 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, much less when we are looking at how deep in debt we are.

Things can get complicated when you take multiple loans, even if you manage to secure the lowest loan interest rate in Singapore. Multiple loans mean an increased amount of paperwork that you have to deal with, which can lead to a higher possibility of you missing 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 need contingency plans. For instance, what will you do if you fall behind on payments?

Should you find yourself in a situation where you do have to default or delay a payment, make sure to choose the loan with the lowest interest rate in Singapore. It is also important to factor in the late payment fees and admin charges that lenders will inevitably add to the fee. By doing so, you minimise the penalties you have to pay and give yourself a better chance of recovering from a temporary financial setback.

In short, it would be wise to consider the above four factors before taking a loan. Sometimes, the solution may not even be multiple loans but rather, a single loan that offers you the best terms.

Our experienced loan consultants at Cash Direct are experts in financial management. Come in, speak to us, and let us help you to decide on the best course of action for your circumstances and needs.


The information provided on our website is for educational and informational purposes only and is not intended to be a substitute for legal or financial advice. While we try to ensure that information on this website is accurate, we do not warrant that the information will be free from error. We shall not be liable for any loss or damage that may arise from the use of this website.

Related Posts

Table of Content