Applying For a Luxury Goods Loan 2022: Why Singaporeans Seek Branded Goods

Once upon a time you might recall someone telling you: “There’s no point in carrying a branded wallet but with no cash inside”.

However, what happens if you’re able to get the best of both worlds?

Over the last few years, Asia has broken the glass ceiling and became the world’s biggest market for luxuries. No doubt, considering its status, Singapore features up there as one of the countries where the sale of luxury goods is still as prominent as ever.

Yet, most of these branded goods come at exorbitant prices and are largely unaffordable for the average Singaporean.

That said, it is unsurprising to see many Singaporeans straining their finances for something clearly against their best financial interests. Some ended up in credit card debt due to their shopping sprees and needed a personal loan to help.

Why Do Singaporeans Seek Luxury Goods?

1. Low Self-Esteem

Psychologists contend that low self-esteem amplifies one’s desire to acquire luxury items.

Because of the perceived inferiority, a number of people are driven towards buying luxury goods due to the need to feel better about themselves. By buying luxury goods, people also feel a false sense of accomplishment. They wish to reward themselves by purchasing something that they can barely afford.

2. Securing Social Status

Especially prevalent in Singapore, everyone seems to be acutely aware of status though no-one admits it.

It’s no secret that people want to earn recognition, look powerful, and to be the symbol of achievement in the society, even if it means being irrational.

For such people, it’s always been their desire to seek the finer things in life, and in the process, communicate their social status to others. Hence, luxury goods are seen as a symbol of identity and power, where some conclude that higher priced goods are that of better quality.

3. Makes Us Feel Good About Ourselves

For some, luxuries are a source of happiness due to their perceived value and the resulting sense of accomplishment. This is closely linked to the first point where a false sense of accomplishment will result in us feeling good about ourselves.

When you’re able to purchase something of high value, being logical doesn’t matter anymore. We buy these luxury goods to fit in and remind ourselves that we are better off than others, and in the process, feel good about ourselves.

4. The Media

The media is not innocent. Media portrayals of the wealthy on TV and social media have shaped consumers’ worlds by falsifying a misrepresentation of what life should be like.

This has led the society to a skewed mentality where people believe that buying luxury goods is a symbol of wealth and success.

The constant need to catch up and the fear of missing out ends up having people spending beyond their means just to ‘fit in’.

5. Deflated Egos

Some studies have suggested that a deflated ego is bad for one’s decision making and that the thirst to repair a damaged reputation could lead to scary lengths.

In the studies, test subjects were made to experience a low moment in various ways—in some cases, they took simple tests and were fooled into scoring lower than others—before being asked to pick a random product from a list as a consolation.

The results?

Individuals whose self-worth had been harmed sought solace in fancy clothing and luxurious jewelry.

How To Ensure That You Are Really Making A Worthwhile Investment On Your Purchase?

So, how can one ensure that they only make worthwhile investments amid the clamor for the conspicuous?

1. Avoid Buying For The Occasion

People often end up in monetary problems as a result of ill-advised purchases made to crown the occasion. That’s how a person who has all along been thrifty breaks the bank to buy an expensive piece that they rarely use.

For instance, an exquisite yet exorbitant dinner dress is probably not something that you’ll be wearing often. The few hundreds of dollars that you spend on the dress can be used to buy other items which you frequently use. Or even similar dresses at a fraction of the price.

2. Quality Over Quantity

Rather than buying a pair of shoes with each visit to the mall, most of which is never used anyway, it’s better and makes more sense to buy one or two favorites and stick to them.

It makes not only economic sense but it’s also logical especially since unused items just come to occupy the already constrained space in the house.

Even some retail industry and financial experts believe that the mantra “Fewer Better Things” could work for everyone.

3. European Luxury Goods Are Cheaper In Europe

Because of taxation and Forex, European luxury goods are cheaper in Europe.

It can, therefore, save money if you wait until that time you’ll be traveling there and make purchases then.

Alternatively, an interested individual would pay less if they send a friend (or use their relatives who live there) to order the item on their behalf.

Better still, some of the items  qualify for VAT/Tax refunds so the buyer should remember to ask before leaving the airport.

For goods imported via post, buyers don’t even pay GST so long as the shipment is valued at $400 or less.

4. Tax-Free Shopping At Airports

Creative Singaporeans have been enjoying duty-free shopping at the Island’s famous Changi international airport and by picking items on their travel around the World.

For local shopping at Changi, all the merchandise- and there is a whole lot of it- come much cheaper than almost everywhere else in town.

Even without going deep, products are 7% cheaper due to the GST savings. This, for high-end items like jewelry, electronics, designer handbags, and watches – mostly fixed-price items – represents substantial savings.

For example, a 7% savings on a classic $2,500 handbag would stand at $175!

5. Ignore the Crowd

According to a past study published in the popular Journal of Consumer Research, observed choices often become “choice defaults”.

In the research, participants chose products, that were brazenly inferior, simply to copy the people surrounding them.

So, rather than ask questions or take time to learn about products, people prefer the so-called “social default”.

Researchers advised that since the pressure and the FOMO (fear of missing out) can be overwhelming, individuals should evaluate matters alone before committing.

With so much said about the rationale behind seeking luxury goods, there is nothing wrong in wanting to own one or two luxury items. Here’s how you can turn your dreams into reality.

Why You Should Consider Getting A Luxury Goods Loan

It’s not wise to eat into your personal savings just to finance your spending on the luxury items that you want. At Katong Credit, we are committed to ensuring that you will be able to bag your dream luxury item home. Which is why our luxury goods loan is aimed at being a timely and reliable source of financial help specifically tailored to meet your needs.

By applying for a luxury goods loan with us, you’ll be able to enjoy a shorter processing time with less paperwork compared to taking out a loan from the bank. All you have to do is fill in the online loan application form which will facilitate the entire loan application process, making it faster and smoother. Our loans also come with flexible repayment terms to ensure that you won’t have to struggle with your finances while repaying the loan. Loan tenures for luxury goods loans vary from 1 to 5 years.

Before you find yourself applying for a luxury goods loan, do take note of the following point below:

1. Decide What You Want And When You Want It

Before determining how you will finance your dream, you should decide what luxury item you want. Be very specific. If it is a designer bag, for example, choose a specific brand and style of bag. This will help you determine just how much you will need to make your dream come true.

You should also determine how soon you want the item. This will help you decide how much you will borrow based on the amount you can save by the time you will be purchasing the item.

Deciding on the above will also help you when deciding on the terms of the loan.

2. Search For Lenders

There are various lenders that can provide you with a personal loan in Singapore. You will have to decide between taking a personal loan from a traditional financial institution or a money lender.

Traditional institutions such as banks have various restrictions when it comes to their loans. Qualifying for a personal loan from these institutions can be difficult. Their interest rates are also quite high and the terms of the loan strict.

Money lenders offer a more flexible approach to financing your dream. They offer unsecured personal loans with competitive interest rates. Qualifying for a personal loan from a money lender is also much easier. In addition to this, you will be able to access the cash much faster.

3. Compare Loan Terms

What are the terms of the loan? Are they flexible? Choose to take a loan from a lender who will allow you to renegotiate the terms of the loan in case of a change in your circumstances. You never know when an emergency may arise. You may lose your job while still repaying the loan. Your lender should be willing to renegotiate in order to make the repayment easier for you.

4. Check The Charges

Service charges can add up and make you pay a whole lot more than you expected. Be sure to read the fine print before you sign the dotted line. Check for service fees and other charges such as late payment fees, change of tenure, as well as cancellation fees.

A luxury goods loan can be your timely source of financing in order for you to bag that luxury item that you’ve been eyeing for. All without breaking your bank. Speak to us today to find out more about our luxury goods loan. Alternatively, you can also wish to fill up our online loan application form via SingPass and one of our loan officers will get back to you shortly.