Many times people need money suddenly. It may be meeting some medical expenses beyond health insurance coverage, purchase an apartment without losing time for some compulsions, or support the sudden financial crisis in business, or buying a car. It is not always possible to wait for the formalities to complete for taking specific loans. However, getting a personal loan is more straightforward than getting other typical loans provided by banks and other financial institutions. It is not always possible to stay within budget to attain the goals, and knowing the tips of how to get a personal loan in Singapore while staying in the country can be a great option to meet the ends. A borrower’s guide, especially for first-time borrowers, comes in handy while taking a personal loan.
Taking a personal loan for the first time
Before digging deep into the process, one should know about these types of loans. Moneylenders, banks, or financial institutions provide a personal loan without any collateral security. One does not need to pledge the home or mortgage gold or any precious objects or plant or machinery in case of business need to get a personal loan. In other words, we can say they are unsecured loans, and the lenders have no power to seize any of your assets or property if you are a defaulter. Therefore personal loan attracts more interest on the principal amount than conventional mortgage loans.
Getting the loan
As one applies for granting a personal loan, the processing time is reduced considerably. The lump-sum amount is transferred to the borrower’s account. The repayment schedule is decided unanimously. One has to pay the principal and the interest on it and sometimes penalty charges if any installments are skipped. The borrower has the liberty to decide the tenure of repayment, and as the repayment tenure extends more, the total amount to be repaid also increases.
One has to be above 21 years and below 65 years to get a personal loan in Singapore. Many banks and financial institutions in Singapore give personal loans only if your annual income is over $ 30,000. Again, if you are not a Singapore citizen, this mandatory annual income rises to $ 60,000.
Many private but licensed money lenders provide personal loans even if your income is less than $ 30,000 but charge more interest rate.
If you are busy with your work throughout the week and get no break from your duty schedules on weekdays, select a money lender open on Sunday. Many money lenders in Singapore remain open on Sunday to increase their business volume, knowing that many borrowers only get time only on Sundays to into their financial demands and do the needful.
Points to ponder before taking a personal loan in Singapore
- It is often impossible to plan to go for personal loans, especially to meet the urgent medical expenses. Still, otherwise, one should plan well ahead and approach the money lenders. Consider if you are already in debt with other types of loans. Taking a personal loan over and above your existing loan might burn a hole in your pocket and become tough to meet all ends.
- A good credit score is the reflection of your financial health. The lenders stay more assured about your repayment capability and history. Having a good credit score, therefore, eases the process of getting a personal loan. Always pay your credit card bills, EMI’s, if any, without defaulting. These things increase your credit score, and you are rated as a low-risk customer. All institutions or licensed money lenders prefer clients with low risk.
- It is best to manage the finances judiciously. Budget your financial capability is best before taking a personal loan. One should never go overboard and borrow massive amounts unnecessarily only because of fulfilling the eligibility criteria but borrowing wisely and just that much needed. Borrowing huge sums increase the overall repayment amounts and the tenure. Borrow the amount that you can pay back without any blues.
- While scheduled banks and financial institutions take more time to process a personal loan, the licensed moneylenders offer loans to the borrowers taking the minimum time. One can also apply online for taking a personal loan from money lenders. Visit any of the best money lenders’ websites, fill-up the form, upload some identity document, specify the loan amount and the tenure, and give details of annual or monthly salary. Your application will be processed fast, and if eligible, the loan amount is transferred to your bank account within a few hours.
- The rejection rate of loan applications to licensed money lenders in Singapore is less than that of other financial institutions. They take more risk following their own guidelines, unlike the standard operating procedure of the banks.
- They only look for repayment capacity and bother little about the credit rating, unlike the banks and other financial institutions.
- Both the banks and the money lenders charge a high-interest rate while giving personal loans as no collateral is pledged against it, and the risk factor is more. However, the processing time of the bank may be a bit long. Still, one can get a loan equivalent to 10 times of monthly salary, unlike the licensed moneylenders who only sanction a maximum amount equal to 6 times your monthly income.
Overview
Indeed at times, many people need personal loans. However, before sealing the deal, one should always weigh all the pros and cons and proceed. Any wrong move can increase the financial burden more and take you to the court of law. It is best to budget your finances wisely, plan for the future and make some savings. However, if it is not possible or any other secured loan is running, it isn’t easy to meet the ends in case of any sudden financial requirement. A personal loan can bail you at these times. Take them but do not go overboard. Borrow the amount that you can pay instead of becoming bankrupt and inviting more troubles.