Many people in Singapore, especially young people lead a lavish life due to which they do not have enough savings to pay for unexpected expenses like medical expenses, repair costs. Hence they are interested in taking a personal loan to pay for these expenses. In other cases, some individuals want to borrow money so that they can take a holiday of their choice. Since a personal loan is not secured, it is usually more difficult to get a personal loan. Hence many people who want a loan would like to find out where to get a personal loan in Singapore. Some factors which should be considered while getting a personal loan are discussed.
There are a large number of banks, money lenders and others offering personal loans in Singapore, though their terms and conditions will differ significantly. Depending on their business model, their criteria for approving applications for personal loans will differ. Typically the borrower is not offering any collateral for the personal loans, the lender will usually consider the credit score, debt – income ratio and other factors while evaluating the application. Usually banks will not give loans to those who do not a good credit score, so these individuals will have to consider other options
One of the main factors which affects the ability of the person in Singapore to get a personal loan is his income. For getting a personal loan,a citizen or permanent resident in Singapore should have an annual income of at least $20000. If the person does not have sufficient income, it will be difficult to get a loan. For foreigners who are working in Singapore, they should have annual income of $40000 for getting a personal loan. Usually, higher the annual income, the easier to get a personal loan, and also the interest rate will be lower.
Processing, loan duration
Often people require a personal loan for financial emergencies and wish to access the funds quickly. Banks will usually take a longer time to process the loan application, since they have procedures which are followed. So though they may have to pay a higher interest rate, people who require the funds from the personal loan quickly, may opt to take a loan from licensed money lenders in Singapore. Since the interest rates for personal loans are usually higher than secured loans, it is advisable to take the loans for the shortest period possible, usually one year, though the lender may be offering loans for a longer duration.
Before taking a personal loan, the borrower should decide how much money he really requires, and how soon he will be able to repay the loan. He should then check the interest rates and other terms from the various banks and money lenders. Usually the borrower will prefer to take a loan, where he pays the lowest interest rate, though the processing time will also be a consideration. In a few cases, the borrower may find that his loan application is rejected by his preferred lender, so he will have to check other lenders till his loan application is approved.