Moneylending FAQ

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Q1 | What kind of loans do you offer?

We offer secured and unsecured loans. 

Most of our secured loans are mortgage loans, which are short term loans secured by properties. As a lender, we will have the first legal mortgage on the subject property.  The borrower may later choose to refinance the property with long term conventional financing or to sell the property in order to pay off the secured loan.

Q2 | How is your mortgage loan different from those offered by the banks?

Alternative financiers like us are able to approve and fund a loan much more quickly than a bank and do not require as much documentation. Approval and funding from us can be completed within a week or two.  A loan from a bank will take at least 30 to 45 days.

We are primarily concerned with the value of the real estate that will serve as collateral for the loan and the loan to value (“LTV”) ratio, while the banks focus on the borrower’s credit rating and income.

Q3 | What are some of the benefits of getting the loans from you?
  • The application process is quick and easy.
  • The loan can be funded very quickly, usually within 14 working days (for unencumbered properties).
  • A borrower can still obtain secured financing from us even if they have issues such as low credit scores, insufficient income history, or without a steady income.
Q4 | Why do borrowers choose VM Credit?
  • The borrower doesn’t want to go through the lengthy application process at a bank.
  • A bank has already denied the borrower’s request for a loan.
  • The borrower needs funding quickly.
  • The borrower has issues with their credit and income.
Q5 | What are the disadvantages?
  • The interest rates on loans from alternative financiers are usually higher than conventional bank loans.
  • Our secured financing facility is usually meant for short-term use.
Q6 | How does one get the loan from you?

After contacting us, the prospective borrower must complete a loan application with their personal information and information about the subject property. We will quickly review this information and determine if the loan is feasible.

The credit of the borrower is of some importance but the most important factor is the loan to value (LTV) ratio based on the property to be mortgaged to us. The subject property will then be appraised by a independent valuer. Once this is completed, we will move forward in processing the loan and funding can be delivered in a matter of days once the necessary paperwork is done by the lawyer.

Q7 | What happens if I cannot service my loan obligations?

When a borrower defaults on a hard money loan they are in danger of being foreclosed upon and losing the property or properties which they used as collateral to secure the loan. Foreclosure is not the desired course of action for us, as we would much rather prefer to be paid back in full for the balance of the loan without any additional hassle. When a borrower begins to miss payments, we will reach out to them and try to work out a mutually acceptable solution. Foreclosure is the absolute last resort.

Q8 | How are you regulated?

We operate under the rules and regulations of the Singapore Moneylenders Act.

Q9 | How long does it take to receive funding from you?

Our loan can be funded within two weeks.  This is a huge benefit to using alternative financiers like us as banks could take 30 days or longer to fund the same loan request.

Q10 | Why are your loan interest higher than loans from a bank?

Banks hold money from their depositors and pay them an extremely low interest rate. The bank can thus afford to lend at a  lower interest rate. We get funds from private investors (or fund the loans ourselves) who expect a higher interest rate due to the increased risk taken on by the lender.

Q11 | Can I still get a secured loan with a bad credit history?

Unlike the banks or other conventional financing institutions, we are much less concerned with a borrower’s credit and Credit Bureau (CBS) scores. We instead focus on the value of the property being purchased or refinanced. Credit scores alone should not prevent a borrower with bad credit from obtaining a loan from us.

Q12 | Does your loan come with lock in period or prepayment penalty?

Our secured loan facility may or may not have a prepayment penalty depending on the specific loan scenario.  It is always a prudent practice to check with us upfront on the prepayment penalty when making the initial enquires.

The following table summarizes the key differences in terms of mortgage loan features between a conventional financial institutions and us.

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Basis for loan approval Income, credit score, credit history etc Value of Real Estate
Minimum credit rating BB Use credit rating for reference only
Documentation Significant Minimal
Property Types Typically residential and commercial All except HDB and JTC properties
Loan Tenure & Repayment Structure Rigid Flexible
Approval Process A few weeks Within 2 weeks
Loan Disbursement 3 months from approval Within 2 weeks from approval