A personal loan for emergency medical needs or education has become very normal in the last few years. However, when trying to find a good deal for a personal loan, you should always find a good lender, irrespective of the country you are applying to. However, if you stay in Singapore and are looking for a personal loan, you are in luck. We have spent hours researching this whole week and have come up with the answers to the most asked questions about loan application Singapore. Today, we will discuss the top things you need to consider while hiring the best company for a personal loan in Singapore.
Things to consider when applying for a personal loan in Singapore
Put your money to good use
You can use a personal loan in whatever way you want. However, you should not take this freedom lightly. So, how should you fund these loans? Well, we suggest you use the money to pay off high-cost debt. If you are already paying a high-percentage p.a for a high-cost debt, you should consider getting an 8%p.a. loan and will consolidate and pay off high-cost debts. Other great ways to spend the money on your loan include medical bills, home improvement, and any financial emergencies.
Always know the interest rates. There are often two rates: the applied rates and the effective interest rate. The former assumes that the loan principal is constant throughout the tenure. This does not consider the fact that each of your repayments is going to reduce the principal amount. However, the latter will reflect the true cost of borrowing when you make the payments on time, considering the gradual reduction over the tenure. Never forget to compare the EIR based on the loan amount and the tenure. You will have a clear idea about your repayment.
Get Familiar with the fees and any changes
You should be updated on any fees or charges in the rules or so throughout the tenure of the loan. Thus, we suggest you start getting familiar with different fees and other aspects of personal loans and loan repayments. Here are a few basics to assist you:
- Annual fees
Some banks charge a fixed sum each year and add the interest you need to pay.
- Late payment fees:
When you miss an instalment or pay less than the actual repayment amount, you may need to pay late payment fees with it. As a lender, you should know this before applying for a loan.
- Change in tenure fee
Not every bank has this flexibility, but some do. You thus should be careful while choosing the bank to apply for your loan.
How much money can you borrow
This is also an important question people often ask us. Many banks have several parameters set to decide the borrowing limits of a person. These things depend on your relationship with the bank, your credit score, and your monthly income.
So, if you have met the minimum income amount, you might be allowed to borrow almost four to five times more than what you currently earn. However, if someone’s earnings are equivalent to 30,000 dollars or more, the bank might reduce this limit to twice the person’s monthly income.
How to get the funds?
Speed is an important consideration for the borrowers. How quickly the loan is sanctioned is very important for them. It will vary from lender to lender. Thus, it is important to find out before applying for the loan. The loan sanction can also be fast forward if you have the right papers.
How dependable the lenders are
Some lenders have classified this as a low-priority problem. However, you must know that it is not. You should consider a situation where you take a loan from a money lender that is disorganised and also has very poor record keeping. These situations will become tougher for you.
Check if the repayment fee is reasonable or not
You as a lender should also check if the repayment fee is reasonable or not as well. When you are repaying the loan early, the lender will lose a part of their profit. So, they would like to compensate for that with the early repayment fee. These are often calculated as a flat dollar amount or a percentage of your loan. You should make sure the prices are affordable and that repayment fee.
So, why apply for personal loan in Singapore? Is private money lending legal in Singapore? These are a few things you need to consider while applying for a loan application in Singapore. Follow our tips to find the best lender to get a personal loan that might solve many of your current problems.