You’ve just purchased your HBD flat, made the renovations to make it your own and suddenly, you realize just how drab your old furniture is. A beautifully renovated home filled with old, drab furniture loses its luster.
With new beautiful furniture, your home will feel more comfortable and become more welcoming which will help you enjoy it even more. You know you need it, but you can’t afford it.
To the surprise of many, more and more Singaporeans actually take on two or more loans. Common loans are home loans and car loans while there are individuals who take on personal loans for general spending as well.
Did you know that with a furniture loan from Horison, you will be able to bring home all the furniture that you need? If you find that your current furniture isn’t to your liking and that you are on a tight budget, Horison’s furniture loan can help you out.
Available Options To Fund For Your Furniture Purchase
There are several options available when it comes to purchasing the furniture that you need:
1. Short term loans – These loans tend to have shorter tenures of about 3 months and above. Depending on the loan provider, shorter loan tenures will bring lower interest rates. Your credit limit and annual income are the main considerations for this loan. Be careful not to overborrow and always make punctual repayments.
2. Unsecured personal loans – Loans that do not require collateral. There is a myriad of licensed moneylenders in Singapore who offer this type of financing. Because the loan is unsecured, you don’t have to worry about the furniture being repossessed. However, because it is unsecured, the interest rates may be higher than those of a secured loan such as the furniture store loan. Licensed moneylenders usually offer loan plans of greater flexibility.
Reviewing The Available Loan Options
Prior to putting in your loan application, you will need to compare the pros and cons of all the furniture loans that you may be interested in. The loans should be judged on the following criteria in order to ensure that you do not end up with a dud.
1. Eligibility – Consider what the requirements are early on so that you do not waste your time applying for a loan you do not qualify for. If your credit is borderline or simply bad, be sure to find out what their policy is when it comes to people such as yourself. People with good credit will have a higher chance of loan approval. Not to worry, because depending on the situation, there are still licensed moneylenders who are willing to work with applicants with bad credit.
2. How much you can borrow – You want to make sure that you have a working budget when it comes to purchasing furniture. This means that you shop around for the furniture you want and calculate the figure that you need. This way, you will know how much money you need to borrow to fit your needs. This is the best way to avoid overborrowing. The figure is important because you can also use it to match up with lenders who are willing to give you the said amount. Some lenders will be happy to give you as much as 6 times what you earn every month, while others may cap it at 3 or 4 times.
3. Loan tenure – This is important because loan tenure will often dictate how much you pay every month. Depending on your current TDSR (Total Debt Servicing Ratio), you should ensure that your furniture loan does not get you over the 60% cap that has been put in place by the Singaporean Government. Either way, no licensed moneylender will approve a loan that will get you past that figure. It is important to remember, however, that the longer the tenure the more you pay in overall interest.
4. Charges and fees – The total cost of the loan includes charges, fees, and interest rates. You must look at all these in order to get the very best deal. Some loans will offer low interest rates upfront, but the fine print will reveal exorbitant charges and fees or high processing fees. Find out how much they charge in late repayment fees, loan processing fees, and even early settlement fees.
5. Interest rates – This is obviously the biggest concern for most people because it generally forms the largest cost of taking a loan. Of course, the lower the interest, the better. However, one should look at the entire package on offer, and not just the interest rate. Calculate the costs and monthly payables in the long run to make sure that the loan is manageable.
What To Keep An Eye Out For
Not every loan is ideal and everyone has different needs. Before signing the loan papers, check through these two points to avoid pitfalls.
1. Taking more than you can afford to pay back – Generally, a licensed moneylender will do their homework to ensure that you can pay back the debt you take on, but if there are hidden circumstances that can interfere with repayment, it may be best not to take on the loan just yet. If you are very close to the 60% TDSR cap put in place by the government, a good lender will turn you down, or give you less than you request to avoid putting you in too much debt. Any lender that offers an amount you cannot afford to pay back should be avoided.
2. Promotional rates – Many times, a store or a lender will offer a great interest rate for a particular period of time. Once the promotional period elapses, normal rates are put back in place. Don’t fall for the promotional rates without finding out what the normal rates are.
Applying For A Furniture Loan With Horison
We understand that everyone has their dream homes which has different requirements. Regardless of the items to be purchased or the materials needed, Horison offers furniture loans with one of the lowest interest rates in Singapore. Taking a furniture loan allows one to buy all the furniture they need in one go, so that they can enjoy comfortable homes and make affordable monthly repayments. We want to help you build your dream home, without having to worry about the costs. Speak with us today!