July 22, 2024
Multiple Loans

To say that the post-pandemic world is financially tough would be an understatement. Even after four years, the world is still reeling from the effects of lockdowns while trying to navigate the future of both business and employment. 

With the current economic situation, many people have to look for a licensed money lender in Singapore to make ends meet. Some households find it hard to get by with just one income. Some people even find it challenging to afford necessities even when they already have a loan. The monetary infusion brought about by the loan proceeds is easily spent when there are a lot of pending bills due or if the financial difficulty is due to illness. As a result, the relief that one feels in having enough funds to cover the essentials is also fleeting. This vicious cycle can create anxiety and mental stress.

Why Multiple Loans are Becoming Common

While many make efforts to improve their financial health, various factors can significantly hamper them. 

Sometimes, one has no choice but to avail of a loan especially if there is an emergency or a drastic change in one’s employment status. When the bills continue to pile up even after loan proceeds are released, the next step is to apply for another loan. Sadly, this has become the status quo for some.

Here are the usual culprits behind the uptick in multiple loans:

1. The rising cost of living

It’s no secret that almost every country in the world is experiencing high inflation. Financial experts have feared that a recession is unavoidable. Although the cost of necessities such as housing, food and education has been rising for years, the pandemic has certainly made matters turn for the worse. As expected, people will have to turn to lenders to assist in covering their regular expenses. 

2. The availability of credit

Many businesses, including financial institutions, lending companies and banks experienced uncertainty during the pandemic. There were a lot of restrictions on work, travel and business. Measures were carried out to contain the virus. So much so that these restrictions led to low to zero sales and income while the expenses needed for technological infrastructure for remote work and to support employees steadily increased. It created a fear of closure. Some establishments actually succumbed to closures. 

Hence, once the restrictions are cleared, the goal is to close as many deals as possible. This is only natural given that the demand for lending is high. Lenders are now more willing to lend money than they were in the past, and they are offering a wider variety of loan products. This makes it easier for people to get the loans they need.

3. Not enough financial education

Although information is now readily available on the internet and many social media influencers focus on financial wellness, many people still do not have enough financial education to make informed decisions regarding money. This may be due to a lack of interest or lack of awareness on how much financial know-how can help them in their daily life and in achieving the life they dream of. 

Unfortunately, not everyone knows how important it is to set up an emergency fund or have an additional income, especially a passive one. When their income is no longer enough, their automatic reaction is to borrow money from family or friends. When that does not work out or if they have exhausted this method, they look for lenders. Often, this leads them to desperation and they will no longer look closely at the terms of the loan. This can also lead them to take on too much debt or to borrow money on unreasonable terms.

4. Lack of a Strategic Financial Plan

Without goals, it is easy to be reactive and directionless. This also contributes to negative financial behavior and uncontrolled spending habits. It would be difficult to control impulsive buying if you do not know where your money should go.

On the other hand, having financial goals but no strategy can lead you down a slippery slope. Say you plan to purchase a house although you do not have any savings. So you applied for a housing loan and since you have a stable job, your application was approved. After a few months, you set your eyes on your dream car. Once again, you have to purchase that car. It has been in your bucket list for far too long after all. You apply for a car loan which was again approved. Now you have multiple loans without a clear plan on how repayment will look like. Once your regular amortization starts and your cash flow is not enough, you will likely resort to a personal loan to pay your other loans.

5. Changing Attitudes Towards Debt

Due to inflation and the rising cost of living, more people need cash assistance.  It is no longer enough to have a good-paying job. The instant funds that loans provide have become crucial in surviving inflation. 

As multiple debts become normal and people no longer see borrowing as a lack of discipline or financial plan, more people will resort to this option. It can be both a good thing and a bad thing. If people become more financially literate and view loans as tools rather than burdens, they are more inclined to strategically use various loan instruments.


Having debts need not be a bad thing. It can be a tool towards financial wellness. If used strategically, it can help one achieve life goals and milestones faster. What is crucial is to be able to track one’s obligations and loans and to come up with a viable repayment plan for each obligation.

When you have a lot of loans, you have to deal with increased financial complexity. Be proactive by planning out how you can repay these loans while exploring other financial options.