On The Money

Planning to Apply for a Personal Loan? Facts You Need to Know

Personal Loan in SingaporeNeed some cash without going through a complex documentation process? Applying for a personal loan in singapore can provide the relief you need. At the same time, you do not need to explain why you need the loan, unlike other forms of credit like mortgage or car loan.

What is a personal loan?

A personal loan is a form of credit extended by a bank or lenders to a borrower that is not secured against an asset. In other words, collateral is unnecessary for this type of loan. The bank or lender will likely depend on your credit history when approving you for a loan. As Sgreliablemoneylender.com notes, applying for personal loans in singapore requires thorough planning and a clean credit background.

How can you get the best deal?

Everyone want to get the best deal when taking any form of credit. To ensure you get the best terms for your personal loan, ask the lender to lower the interest rate. In most cases, the lender will quote a higher interest rate to allow some room for negotiation. Do not just accept the first interest rate quoted by the lender. It will also help if you shop around and find out what other lenders are offering. This way, you can better weigh your options.

Are there secured personal loans?

The answer is yes — you can still secure your personal loan against an asset. The advantage is that you can easily qualify for the loan and get a higher limit, unlike in unsecured lending options. The disadvantage of a secured personal loan is that you need to sell or use your asset as repayment for the loan if you miss the payment schedule consecutively.

What benefit do you get for taking a personal loan?
  • Quick funding. The process of taking a personal loan is easy; in some cases, you will get the money on the same day you applied. This makes it possible to pay bills and late debts.
  • Flexibility. Personal loans are multipurpose, unlike mortgages, student loans, or car loans. This means there is no restriction on how to spend the money you get.
  • Fixed rates. Once you agree on a certain interest rate with the lender, it does not change for the entire life of the loan.

Taking a personal loan gives you an opportunity for your credit. Nonetheless, it is important you go over the terms of your financing option to determine if this applies to your case.