Do you want some cash? Maybe for renovations, holiday travel, or consolidating current debts? One of the best ways is to get a personal loan in Singapore. Unlike car loans or mortgages which require applicants to provide collateral, personal loans are unsecured.
If you fail to repay, no one can seize your personal assets. Personal loans in Singapore also stand out because you have a free hand on how to use them. If you are new to loans, here is a comprehensive guide to help you understand more about personal loans and apply.
What is a Personal Loan?
A personal loan is a type of credit provided by lenders in Singapore to borrowers who want to make big purchases or for personal expenses. Because personal loans are unsecured, lenders rely on borrowers’ credit scores to determine their creditworthiness. If your credit score is good, the personal loan you take can have lower interest rates compared to credit cards.
Today, a lot of people are using personal loans in Singapore to consolidate multiple debts, such as credit card loans, into a single, monthly payment. You can even enjoy lower interest rates by working with Lendela to compare lenders and their offers.
When to Go for a Personal Loan
A personal loan is a perfect way to get a large sum of money for a major purchase. Although it is not advisable to go for long-term financing when addressing short-term financial needs, we must say that personal loans are far better than credit cards because the latter attracts high-interest charges. Here are some of the reasons why you might need personal loans:
- Family emergency.
- Medical emergency.
- Down payment for a wedding.
- Traveling for holiday.
- Debt consolidation.
- Education expenses.
- Home renovation.
Personal Loans: How Do they Work?
When you apply for a personal loan and it is approved, a lump sum is deposited into your account and you need to repay it over the agreed period of time. The loan has a fixed repayment period and interest rate. This implies that unlike credit card loans, the repayment of personal loans is done through a pre-determined monthly amount for the entire loan term.
It is also important to appreciate that most personal loans in Singapore are amortized, implying that the fixed payments per month include the interest and principal repayment. With amortized loans, it is easier to budget because there are no balloons at the end of the loan term.
Special Benefits of Using Personal Loans
The primary benefit of using a personal loan is that it has no limitations on how to use the funds. However, we strongly encourage you to be more prudent to enjoy high-value for money. Here are other benefits of personal loans in Singapore:
- The interest rates for personal rates are reasonable.
- You get ample time to repay the loan.
- The process of application, especially if you use Lendela, is easy and fast.
- The risk to your personal assets is very low.
Applying for a Personal Loan in Singapore
Before taking a personal loan, lenders are interested in your ability to repay and the credit score rating. If the score is poor, the interest rate of the loan is likely to be high. Therefore, you might want to first check your personal credit score and improve it to enjoy lower rates. Then, ensure you have a regular income, and within the age bracket of 21-65 years.
One of the best methods of applying for a personal loan is through Lendela. They provide a more comprehensive comparison of lenders and loan offers to ensure you only apply from the best. Simply visit Lendela to create an account, fill out a quick application form, and they will follow up with different lenders on your behalf.
Once a matching lender with good interest rates and conditions for the loan is identified, you will be notified and booked for an appointment. Make sure to review the conditions for the loan and understand them well before signing the agreement.
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