Many Singapore banks and money lenders offer personal loans to their clients. These however are among the most difficult loans to qualify for as the money lenders are very strict on the criteria for choosing those who qualify. What are these personal loans and what do you need to know about them?
A personal loan Singapore is a type of loan offered in Singapore that allow one the flexibility of using the money borrowed as they may wish. Unlike a business loan or a home loan which provide financing for strictly business and home investments respectively, personal loans can be spent on virtually anything. The money lender does not even ask why you need the funding. It could be for leisure like going on a vacation you have been longing for or for more official use such as clearing credit and advancing education. Whatever you intend to use it for here are a few things you need to know about it.
Security
Most personal loans offered by money lenders in Singapore are unsecured but some are secured. Some lenders offer both options and allow the borrowers to choose whatever they want. A secured loan means that the borrower offers certain property as collateral. When the loan repayment is not done in time, this item is seized by the lender. While secured loans have low interest rates, you stand the chance of losing your property if you do not pay up on time. On the other hand, unsecured personal loans do not require the borrower to provide any collateral. There is no chance of losing any property when you default the payment but the interest rates are quite high. Other actions can however be taken against you if you do not pay including filing a lawsuit.
Interest
Like all other loans, a personal loan Singapore will attract a certain amount as interest. The amount of interest charged will differ from one lender to another and will depend on several factors. Short term loans to be repaid in less than a year will be charged lower interest than long-term loans. Those with great credit history are offered personal loans at lower interest rates than those who have been notorious with their credit in the past. Most of the time, the interest on personal loans is fixed but it could be variable, that is, it changes with time. Be sure to read what your money lender’s terms are before taking the loan. No matter how much hurry you are in to get the money, read through every word and get clarifications so you do not regret in future.
Other Options
Though a personal loan Singapore will help you get money when you need it, it is a debt and may land you in trouble if you are unable to repay it on time. If you are in need of a quick loan and you are capable of paying it back within a month or so, a payday loan is a much better option. You could also opt to borrow from friends or relatives but this can get very ugly if you do not pay back or are unable to agree with their terms. A personal loan can be of help to you no matter what you intend to use it for but when choosing the lender to borrow from, choose wisely.
