Corporate loan: what you need to know?

Credit can be a powerful tool to achieve your financial objectives, but it is also possible that it becomes an invisible enemy when you are not clear about the intended use. It is why we give a series of tips for you to take into account when requesting a corporate loan Singapore to acquire goods or services. Either through a credit card or a loan, it is important that you ask and understand what the commitment you are making.

Please note the following points –

When you acquire a corporate loan, you are borrowing money, which you agree to pay in a specified time and at an interest rate agreed with the entity. The cost of the loan will be affected by the time it takes to pay it off, as well as by each of the costs charged by financial entities for providing this service. Remember that the faster you pay off the debt, the less interest you will pay. When you go to apply for a corporate loan Singapore, it is important that you take the time to compare the different options offered by the market.

By acquiring a corporate loan, you agree to make payments according to an acquired commitment. If there are delays or do not make the respective payments, you will have additional charges for the non-compliance. If you do not pay on time, besides the overhead interest costs, pre-legal charges, etc., it also causes a report to the credit bureaus that affects your credit history, generating difficulties in obtaining a loan in the future.

What should you ask?

Before signing the loan papers, you must ask all the necessary questions to be clear about the commitment you intend to acquire, thereby avoiding surprises or uncomfortable situations once the loan is disbursed. Before acquiring a loan it is recommended that you ask the financial institution:

  • What is the interest rate, if it is fixed or varies during the term of the credit?
  • Credit time,
  • What costs should you bear when applying for the loan?
  • It is possible to modify the initial credit conditions at some point and what it implies.
  • Why do I have to sign a blank promissory note?
  • If you can make advance payments to the debt, are you eligible to pay a fine?
  • Can you refinance the debt amount from the same bank?

Conclusion –

If you are considering applying for a business loan, we suggest that you must be fully aware of the commitment you are making and are sufficiently informed when making the decision. Taking a corporate loan requires an accurate analysis of your income and expenses, especially the latter. Financial intermediation institutions generally look at the level of income to approve loans, when the analysis must be based on the behavior and level of spending.

On the other hand, you must take into account that the money they lend you is not yours, not even from the financial institution that disbursed it, but from its depositors, who trust that their resources will be well invested. Therefore you are in the duty to return it in the stipulated terms.