A personal loan is a type of loan you can borrow in Singapore. You will have to borrow a certain amount from a licensed moneylender or a bank. It can help you cover different expenses, including debt repayment, education expenses, vehicle costs, and medical emergencies.
A personal loan will enable you to meet your long-term and short-term financial needs. You can apply for any personal loan from a moneylender who will assess the suitability for your loan. If the loan gets approved, the lender will provide you with the necessary funds. In this article, we will tell you how personal loan in Singapore work.
How Personal Loan In Singapore Works?
When you get a personal loan from Singapore, you will receive a certain amount that you will have to repay over a certain period. Most personal loans come with a fixed rate of interest and repayment period. This will mean in comparison to a credit card debt; you will need to repay the personal loan by making monthly repayments within your chosen tenure.
Personal loans in Singapore have monthly repayments. They comprise principal repayment and monthly charges. You can budget them easily as there is no expensive payment at the end of the term period. Once you decide to get a personal loan in Singapore, you can learn how to check licensed money lender in Singapore.
What Will You Need To Apply For A Personal Loan In Singapore?
The personal loan application process differs among money lenders and banks. You can apply over the phone, in-branch, or online. Some of the most common documents that loan providers generally ask for during the loan application process are as follows.
- Proof of Address
You will have to provide your mortgage and utility bills with your full name and residential address.
- Identification Card
It can be your NRIC, passport, or employment pass.
- Proof of income
For this, you will require your latest twelve-month Central Provident Fund contribution history statement or latest Income Tax Notice of Assessment.
Things You Need To Know Before Taking A Personal Loan In Singapore
A few things that you need to be mindful of before you take a personal loan in Singapore are as follows.
- Make sure that you can pay back your loan before deciding on borrowing. If you default on a personal loan, it can affect your credit score. So, borrow for a vacation or a wedding only if you can make the necessary repayments.
- You can borrow to consolidate debt. If you require a fixed monthly payment at affordable rates to pay or manage your debt payment, personal loans will be of great help.
- In case you have a proper credit score or a good relationship with your bank, you can ask them for better alternatives if you think you cannot afford a personal loan in Singapore.
Different Kinds Of Personal Loans In Singapore
- Balance Transfer
It is a loan that enables you to transfer outstanding loans you have already into one place. Some moneylenders will provide you with a term period of six to twelve months, during which they do not charge any interest. These loans will help you consolidate the debt into a manageable account with a fixed monthly payment that you will be able to budget.
- Debt Consolidation Plan
In the debt refinance program, you will have to consolidate your unsecured credit facilities from different financial institutions under a single institution. However, it excludes certain kinds of unsecured loans from this program. These comprise the following.
- Credit facilities for business and business-related purposes
- Renovation loans
- Joint accounts
- Medical loans
- Education loans
- Credit line
A credit line helps you borrow money at your convenience. Normally, your moneylender will decide the amount you can borrow from your credit line at a given point in time. You pay interest only on the duration and amount you have borrowed. Once you pay the amount back, you will not have to pay anything until you borrow from your moneylender again.
- Personal Instalment Loan
These loans offer a lump sum amount of cash up front. You will require paying that amount back overtime every month. It is the most common type of personal loan that people take for weddings and emergencies.
What is the eligibility for a personal loan application in Singapore?
You will require to be at least twenty-one years old to get a personal loan in Singapore from a list of legal money lender in Singapore. The age limit until which you can apply for a personal loan is sixty-five years. When you apply for personal loans in Singapore, you will have to submit your relevant documents like a payslip.
If you need a quick and easy loan, you can get personal loans. These will help you get funds for your immediate financial needs.