Homemakers (or housewives) are the backbone of any community but their efforts are seldom recognised beyond the household. Because of that, it can be very difficult for them to get a loan in Singapore.
Can a homemaker or housewife get a loan?
It is hard for homemakers to get a loan from banks because major lenders generally do not view the average homemaker as a reliable debtor.
The main reason is that homemakers often cannot provide a formal record to demonstrate income. Unfair as it is, fresh graduates in their first job will get a loan more easily than a homemaker who has been managing their family finances for decades.
However, there are some ways around this. Homemakers usually receive money from their spouses even if the amount varies from month to month. If they can show bank records of regular monthly deposits, legal money lenders may be willing to consider it as proof of a steady income.
Another way is to get a co-signer for the best loan in Singapore that lenders offer. Licensed moneylenders prefer this arrangement because it spreads the risk to someone with established creditworthiness.
One thing that every homemaker should avoid is borrowing money from loan sharks. Unlicensed moneylenders find easy prey among homemakers who do not qualify for loans from legal lenders. However, the consequences of being in debt to these dangerous people are simply not worth it. Avoid them at all costs.
Let’s take a closer look at some of the best loan in Singapore which housewives and homemakers can qualify for.
The 3 best ways for a housewife to secure a loan
Homemakers have three main options for a loan.
1. Through a co-signer
A co-signer is someone who agrees to be responsible for repaying a loan even if they do not receive the money from the loan. Most co-signers are often close friends and family. For a homemaker, that may be a husband, son or daughter, and/or a sibling.
In this case, the lender will perform a credit check on the co-signer instead of/as well as the actual applicant (the homemaker). This credit report will determine the maximum loan principal, the length of the loan term, and the interest rate charged.
2. Secured loan
A ‘secured’ loan is approved based on an asset placed as ‘security’ (or collateral) with the lender. This may be a property title, vehicle ownership, or jewellery. The principal of the loan will match or be slightly less than the value of this asset.
Secured loans are a convenient way to obtain a large amount of cash against something that the applicant does not use often. However, it can be unwise because the borrower risks forfeiting the entire collateral even if they miss only one payment.
3. Informal income
Some homemakers may earn additional income from a small home-based business, insurance payments, or interest from fixed or regular deposits. Besides this, they often receive an amount every month to run the household from family members who work.
It is a good idea to not deal in cash but to have all such money deposited into a bank account. This creates a paper trail that can be useful when applying for a loan. Lenders will compare the incoming amount against the expenditure. It will give them a good idea of how much the homemaker can afford to repay.
What are the loans available to homemakers in Singapore?
Almost all good licensed moneylenders in Singapore will be willing to extend a loan to a homemaker. In most cases, the loan will be one of the three that we touched on above: a co-signed loan, a secured loan, or a loan based on informal income.
96bm Credit offers all three of these loans, as well as other personal loans for homemakers. If you are unsure about which one(s) you can qualify for, speak to us. Our team of expert loan professionals will assess your requirements and eligibility immediately at no extra cost.
The best loan in Singapore that homemakers can get is waiting for you at 96 BM Credit. Why not contact us now?