Five things you need to know before borrowing a personal loan
According to MoneySmart Singapore, about 1.5 million people in Singapore have personal loans, which is about 36% of the adult population. The average loan value is $20,400, and the most significant percentage of borrowers are between 25 and 34 years old.
The amount of personal loans taken in Singapore has increased by 60% in 5 years, an average of 12% per year. There was a sharp increase in the loan value from $500 million to $1.25 billion. The growth in personal loans gets driven by the rise of internet usage in Singapore. People are more confident about getting loans online than going to a bank or financial institution and speaking to a representative face-to-face.
Borrowing money can be an essential and even necessary step toward achieving your financial goals. While there are many financial options available, such as credit cards or lines of credit, a personal loan is one way to get the funds you need quickly and from a lender that specializes in lending directly to consumers. However, knowing what a personal loan entails before applying for one is essential.
What is a personal loan?
A personal loan represents a form of unsecured loan that means you don’t need an asset that can be used as collateral. You can borrow money and pay it back over time, typically in monthly installments. A personal loan can help you pay for expenses that are beyond your reach with your current bank account or credit card. There are many various reasons why people take out personal loans, including paying down bills or consolidating debt, planning a vacation or special event, or just paying off old debt. You can use it on anything your heart desires! When you apply to get a personal loan, your credit history will determine whether or not you are approved. If you have a good credit score, you can receive the lowest interest rate available.
The dangers of borrowing a personal loan
Borrowing a personal loan can act as a good thing when done right. Borrowing money to invest in your own future can help you build wealth and assets. However, borrowing a personal loan carries the risk of financial loss and comes with emotional, psychological, and social risks. Many folks fall prey to the trap of borrowing too much money. They mistakenly think they can make more money to pay off their debt, but they end up with more debt instead.
Borrowing money is never an easy task, especially if you are in a position where you need to take out a personal loan. Before you move ahead and pull the trigger on your application, there are some key things that you should know about it.
Your credit score and approval chances!
A credit score is an indicator of creditworthiness. When it comes to undertaking a loan, the crucial thing you can do is improve your credit score. It is because the credit score will determine what rates you get offered and how much money you can borrow. The higher the score, the better.
A bad credit score will influence your capacity to get any form of financing. If you have a bad credit rating, it might be challenging to get loans at all, and even if you are able to get a loan, the terms will be pretty unfavorable. If you plan to apply for a personal loan in Singapore, you must understand the importance of your credit scores and how they affect your loan application.
Check the Repayment schedule and interest rate.
When you require a personal loan for whatever reason, you might be doubtful about the repayment schedule and interest rate. While there is no one uniform standard for every lender, here are some figures for reference:
a) The average interest rate for a personal loan in Singapore is between 4%-15%. It varies from one bank to another.
b) The typical repayment period for a personal loan here is around 5-10 years. The longer-term of a personal loan means it will accrue less interest throughout the tenure but with a slightly higher monthly installment. On the other
You must fulfill the eligibility conditions to avail of personal loans. You have to be a Singaporean who has crossed the age of 21. The current bank account should be $1000 or above. As a salaried person, your earning must be at least $3,000 per month. If you cater to the stated conditions, then you can make an online application to any one of the reputed private lenders in Singapore.
Choosing the right lenders
It is simple to get a personal loan in Singapore. But the difficulty persists in choosing the best lender. When you take any loan, there will be some hidden charges around like processing fees, late fees. You may not be aware of such costs initially that can lead to financial trouble for you in the future. Hence, as if you are going to take a personal loan for your own use, make sure about all charges and interest rates before taking any loan.
Your Sources of Income and loans applications
Always include all sources of income when applying for a loan. It will ensure that you get the most favorable interest rate for your financial situation. When you file for a personal loan, you should never apply with more than one lender at the same time. Many people do this thinking that they can negotiate a better deal from one of the lenders, but what it does is cause confusion and delay your application. The lender will be unsure who to talk to about your account, which may ultimately result in your application getting declined.
Partner with SU Credit for your personal loan needs!
Whether you need a personal loan to consolidate your debts or buy an iPhone for your upcoming holidays, we can help. Here at SU Credit Pte Ltd, we provide a platform that enables you to find the right company and give them all your requirements. It makes it easier for us to source one of the many companies and connect you directly with them to get a reliable loan. You can now take advantage of our services to get the money you need. Whatever your profession may be, we have the perfect loan package for you. Our personal loans are available in any denomination, and you can repay them easily online. We offer a wide range of loan products and flexible payment plans that will help you out in your time of need. If you need guidance on what form of loan is right for you, sign up today to connect with our helpful team members!
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