Do you need a considerable amount of money immediately? But there is nothing or none to help you? If you need some financial help, there is one thing you can do is to take personal loans. If you don’t know mu
ch about personal loans, it is time you learn the details of personal loans. Several organisations make fraudulent schemes in the name of personal loans. It will always help if you have a basic idea about what a personal loan must offer the interest rates, and everything.
Types of Personal Loans
When it comes to personal loans, it might seem to be a common term that everybody knows. However, there is something that most of us don’t know. There is more than one type of personal loan, and all of these have various aspects. Before deciding whether you want a personal loan or not, it’s crucial to understand what kind of personal loans are available and which ones you would like to avail of. Here is a list of personal loans in Singapore and details about them:
- Installment loan plan
It is a typical kind of personal loan people take. The name of these loans may vary from bank to bank. However, the processor system is the same. In this particular type, banks offer you the amount of money you need, and for that, you have to pay a one-time fee. After that, you have to pay the loan money with interest in monthly order. The fixed time to repay the loan amount is of 60months or 5years.
To understand this loan type clearly, let’s say you want to start a business, but you don’t have enough money to do so. In such a situation, you will apply for a personal loan to a specific bank, and you have the opportunity to reduce the time of repaying. For example, if you want, you can take the loan for a minimum of one year or 12 months. Interest rates are different for various banks. Your monthly installment and interest rates depend on the loan tenure, and then the bank adds those fees to your total loan amount.
As mentioned above, the interest rates vary from bank to bank. However, there is a one-time processing fee that ranges between 0 to 3 percent; most of the banks waive the processing fee. If we try to get an idea of interest rates, it may be low as 3% of the loan amount to 6.96% Maximum. But let’s not neglect one thing: you might not get the money you want because of your credit history. The maximum amount a bank can offer you is four times your monthly salary. However, if you have a plan to take loan from a certified or licensed money lender then make sure the monthly interest rate is not more than 4%.
The maximum time you can get to repay a personal installment loan is five years or, to be more precise, 60 months as loan tenures count as months. If you need a considerable amount of money and need some years to repay, then it is the kind of personal loan most suitable for you.
- Transferring balance
The common term for this kind of personal loan is fund transfer or balance transfer. In this kind of loan method, the entire process depends on the available balance in your active credit card. You only have to pay the one-time processing fee at first as low as 0% to a maximum of 3% for the next 6 to 12 months of spending. After which, you have to repay the entire amount, or the bank will have the right to charge you interest rates ranging between 18-29 percent based on the credit facility you took.
If we talk about how this particular type works, it will be better to say that it is somewhat the same as transferring the mobile balance. Here, you can share a sum of amount from one, even more than one credit card to any low or zero credit line. It allows you to get cash in an emergency. However, you have to pay the one-time processing fee that may range between 1-5% depending on the loan amount, and then only you will get approval to avail yourself the opportunity of a quick loan. The period given for the transferring loan is a short-term one; here, you get 6 to 12 months to repay the loan amount.
We can say it is the friend in need kind of a loan. If you need quick cash, for example, you need money to pay for a medical emergency or emergency car repairing, it is the best option. The loan amount can start from 500 dollars and rise to 10 times your monthly salary only if you have a higher pay and clean, good credit history.
- Credit line
It is the more accessible one to use. Once the bank approves your loan in this type of loan, you can withdraw money directly from the bank or withdraw the fund via ATM or cheque. But what different about this is that bank will charge you interest whenever you draw the fund—interest rates for this type range from 18 to 22% per annum. There is no time limit for the loan tenure. It is a good option for emergency use as you won’t have to wait for approvals if any emergency occurs.
While licensed money lenders are a great asset to Singapore and are very important when it comes to providing loans to those in need of money, they also have to be regulated by some rules and regulations.
Apart from these three, there is one more which we call DCP that requires government approval. Now that you know about the personal loans, how they work, and everything that can help you determine which one goes better with your situation. You can make decisions without any regrets.