Different types of loans in Singapore
With unemployment rates at an all-time high and economy not doing too well, it is highly likely that many of us will go through a rough patch and require some sort of financial aid. But before rushing head first into acquiring a loan, it is best to know which loan is best suited to your needs.
Personal loan
Personal loans are categorised as an unsecured loan. What this means is that you do not have to pledge an asset as a guarantee in the case where you default on the loan. The amount that can be borrowed is dependent your income, the lender and your credit rating and usually varies from $1000 to $50000. Personal loans are often one time loans that people take to pay off a wide variety of things such as car loans, house loans etc. As such, personal loans are one of the most popular loans in Singapore.
Payday Loan
Payday loan in a fast approval loan in which you can borrow a small amount, usually lesser than that of your salary, from the bank at a high interest rate. This loan needs to be paid back quickly by the end of the month. While it is easy to secure a payday loan as the licensed lender does not have to go through the process of checking your credits which is often the case with other loans, it is not recommended to take a payday loan due to the high interest rates.
Business loan
Business loans in general are meant to provide funds for a business to tide through a rough patch or to help a business to further expand and boost sales. There are many business loans in Singapore such as the Business Term Loan, Small to Medium Enterprise Loan and even Start-up Loans to name a few. To assess the suitability of a company for a business loan, lenders will take into consideration the company’s history, the amount of debt the company has and whether the business seems risky.
Foreigner loan
Foreigner loans are meant for individuals who are neither permanent residents nor citizens of Singapore. However, the borrower has to be have a valid work permit/ employment pass to be eligible. Foreigner loans typically are fast approval loans as extensive background or credit check are not required.
Other than being sure about the type of loan you intend to take, be sure to take note of the repayment methods and interest rates. Compare rates between the different moneylenders and take up one with an offer that best suits your needs and repayment schedules.
