Whenever we have to fund a huge payment, we usually resort to taking a personal loan. If you have a huge investment to make in the near future, it is rather wise to take a personal loan rather than spend your fortune on it. A personal loan can help individuals make different kinds of payments related to family planning, house renovation, a destination wedding, a vacation, and so on. The best thing about personal loans is that it does not require hefty document processing and the procedures are quite simple. Therefore, if you are a resident of Singapore who is willing to take a personal loan, there are a few things that you need to know. This article will provide you with thorough guidance regarding the different aspects of availing of a personal loan.

One Should Apply for a Personal Loan Only When it is Absolutely Necessary

Before you plan on applying for a personal loan in Singapore, you should be absolutely sure about your needs and requirements. You should conduct a thorough assessment of your needs and ensure that you do not have any prior pending loan commitments. Although a personal loan may help you meet your immediate needs, it will be an additional burden for the next few years. Therefore, you need to make sure that you will be able to repay the amount in the times to come. You can also get in touch with the best moneylender in Singapore, who can help you analyse your situation and plan your finances accordingly.

Conduct a Thorough Research Before Applying for a Personal Loan

If you are wondering how to apply for a personal loan, you need to strategise things from scratch. If you are looking for the best personal loan in Singapore, you can get in touch with some of Singapore’s best loan providers. However, sometimes their claims may sound very lucrative, and it is easy for an individual to be swept off by them. However, it is advisable to be very cautious about the different terms and conditions that tag along so nothing turns up uncalled for. Although there might be excellent deals on the lowest interest rates, make sure you are not signing up for hidden charges. Some lenders in Singapore may also include hidden additional charges on your loan. Make sure you have a proper look at everything before you sign in for a loan in Singapore.

The Rate of Interest

As no collateral is taken as a guarantee in personal loans, they usually tend to have a very high-interest rate. As the interest is high, even the tiniest difference of rate percentage can cause a huge difference in amount when an individual pays back the amount. Therefore, while looking for loans, it is important to make sure that a loan provider in Singapore is able to provide the best deal on the interest rate that will be based on his credit score and other requirements.

Check Your Eligibility

Before you start researching the market for the best deals on personal loans, make sure that you check your eligibility thoroughly. For any loan that an individual is interested in, he should be able to fulfil certain criteria to ascertain his eligibility. Of them all, income score and credit card stand as the most important criteria that need to be taken into consideration as they indicate if an individual is capable of paying back a loan. These two elements serve as important deciding factors for an institution to decide if a person should be allowed to have a loan or not. A higher credit score and high income indicate that one can easily get a loan for a high amount.

Maintaining a High Credit Score Can Prove to be Beneficial

Having a high credit score automatically boosts an individual’s chances of obtaining a personal loan. He can also choose his desired rate of interest and tenure for which he is taking the loan. Having a low credit score indicates that an individual has a poor history of repayment. This causes the banks to become apprehensive about granting loans to anyone who has a low credit score. Hence, before you apply for a new personal loan, make sure that all your prior debts and credit card bills have been cleared.

Prepayment Charges 

Prepayment charge refers to the settlement of a loan before the due date. This can be done by repaying either the entire amount or only a part of it. The borrower has to make an additional payment after twelve months since the loan has been sanctioned. However, one should note that certain money lenders and banks in Singapore have the provision for prepayment. Therefore, before you finalize your personal loan, make sure that you go through all the prepayment terms and conditions.

Some Important Tips to Keep in Mind

Here are a few things you need to keep in mind if you are taking a personal loan in Singapore.

  1. Repay the amount diligently and on time. This serves as a great virtue as it prevents an individual from being penalized. It also has a positive impact on the credit score. Timely repayment of loans is very important for maintaining a high credit score. This will benefit an individual in his future transactions.
  2. Opt for shorter loan tenure. There might be money lenders who offer low EMI opinions, but the repayment period is very long. Although this may seem tempting, the interest paid on long-term loans can be very high. Therefore, it is always wise to choose shorter loan tenures.

In Conclusion

I hope this gives you a brief idea about the different aspects of taking a personal loan in Singapore. Therefore, if you have a huge expense coming up ahead, you no longer have to worry about having to burn a hole in your pocket. All you have to do is keep the points mentioned above in mind and apply for a personal loan and VOILA!