Borrowing money and lending have become accepted norms in societies like Singapore. Living in a city like SG entails higher living costs that may require financial assistance from time to time. Many folks aren’t strangers to borrowing, and most of them have achieved their life goals because of money lenders.
However, there are a select few who think that they can outsmart lenders. This raises the question of whether borrowers can truly outsmart money lenders.
Countless borrowers have devised clever and cunning ways to weasel their way out of a loan agreement. While their ideas might sound good, they often blow up in their faces because of the safeguards put in place by money lenders and the Singapore government.
Let’s take a look at some of the ways borrowers try to outsmart lenders.
1. Misrepresenting Financial Information
Some borrowers declare either larger income or lower expenses to qualify for higher loan packages. They submit falsified bank statements, doctored payslips, or made-up employee information.
Many money lenders today are quite tech-savvy and have ways of verifying financial information. Falsifying critical information not only puts your credit score at risk but is also illegal. The government can charge you with criminal offenses if you submit false information.
2. Delaying Repayments Strategically
Some borrowers make delayed repayments to renegotiate better terms or avoid penalties. They often make partial payments and request deferments.
While this might initially seem smart, it backfires on borrowers with higher interest accruals. Typically, most loans have clauses that adjust interest rates and make them higher for late payments. On top of that, there are also penalties and other charges, making the total amount owed much higher.
Additionally, lenders can take legal action against persistent delays to recover their money. Thus, “strategic” late repayments end up causing heavier financial burdens for borrowers who think they can work around the system.
3. Taking Multiple Loans from Different Lenders
Other borrowers believe borrowing from different lenders to pay off their existing loans can help them manage their debts. But that’s not true at all. What they’re doing here is simply accumulating more debt, which will eventually defeat the purpose of borrowing from multiple lenders in the first place.
Juggling multiple debts can lead to default and severe financial consequences. Borrowing money from a private money lender in Singapore to pay off your debts from a bank or another money lender may help you initially, but without the discipline and drive to improve how you handle your finances, you will end up neck-deep in debt.
4. Using Legal Loopholes
Other borrowers think they can outsmart money lenders by looking for legal loopholes in their loan agreements. These folks would exploit bankruptcy laws or restructure debt through other legal channels. However, most of them fail to recognize Singapore’s strict bankruptcy and debt restructuring laws.
Going down this route will have long-term consequences on your borrowing ability. SG authorities constantly review and close loopholes, making this strategy quite risky and unwise.
5. Changing Identity or Relocating
Rounding up this list is identity change or relocation. Some borrowers think they can outrun their debts by moving to a different location within Singapore and changing their identities. The only thing is modern tracking methods and databases make it hard for people to just disappear.
Not only are borrowers required by law to update lenders about their addresses, but failing to do so has legal repercussions.
Changing one’s identity to evade loan repayments is a criminal offense that the SG government will deal with accordingly.
Wrapping It Up
Borrowing money is a privilege that not many people have. If you have been approved for a loan, treat it responsibly. Make prompt repayments and constantly update your lenders about pertinent information. Don’t try to outsmart the system because it will affect your long-term borrowing capabilities and could bring legal consequences. Be a responsible borrower and always do right by your lenders.
