Personal loans are amongst Singapore’s most common loans. Since there are no usage restrictions, they can be used to pay for anything you want. This can include situations where you would like to take an unplanned vacation with your family. The positive thing about taking a personal loan is that compared to a home or car loan, you’ll need to send a limited number of papers. As a result, the processing time is faster, with many banks promising cash in hours. Also, because of the nature of personal loans Singapore, you don’t need any collateral which sounds to be the greatest advantage!
There are many who are scared of loans. Financially responsible people use credit cards for day-to-day purchases, finance car purchases with secured vehicle loans and take out mortgage loans to buy homes they could never dream of paying in cash. Secured and unsecured personal loans are also becoming increasingly popular among judgmental borrowers.
The growth of personal credit balance outpaced credit card, student loan, auto loan, and mortgage balances. Many banks in Singapore that generally have user-friendly online applications and offer quick funding drive much growth in the space. It’s no wonder that customers have an affinity for personal loans. Unsecured personal loans have several key advantages when compared with alternatives such as credit cards and payday loans. Though, less common personal secured loans also hold real value for qualified borrowers.
Here’s a closer look at the primary advantages of unsecured personal loans and some of the main reasons you may consider using them.
Higher Potential Of Personal Loans Than Credit Cards
The spending cap for each card falls within a range specified by the issuer or card network, with lower limits reserved for applicants who are narrowly eligible for the card, and higher limits for highly qualified applicants. As the providers of personal loans, credit card issuers use several criteria to set spending limits. The bulk of these come from consumer credit reports:
- Debt to income ratio
- Recent bankruptcies or criminal offenses
- Timing and frequency of credit requests
- Other active credit accounts payment schemes
- Revenue and employment history
- Credit rating
Lower Interest Rate Than The Credit Card
Interest rates for personal loans are typically lower than interest rates for comparable borrowers on credit cards. For very well-qualified borrowers, unsecured personal loan rates start at 5 percent or 6 percent APR. By contrast, finding low-APR credit cards with regular APRs below 10 percent is rare, regardless of the strength of the applicant. Many credit cards have low or no-interest introductory offers that last 12, 15, or even 21 months, but rates go up to 10 percent, 15 percent, 20 percent, or higher once the period of entry is over.
You Do Not Need A Collateral
Unsecured personal loans do not require collateral from borrowers. The consequences of defaulting on an unsecured loan are severe, but it doesn’t include the loss of a vehicle, house, or any other property.
It Has Multiple Uses
An unsecured loan like a personal loan is of no loss. Unlike a car loan, which can only be used to buy a vehicle, it is typically possible to use Personal Loan for any legitimate reason. If you’re planning on buying an electronic gadget, financing your home renovation, paying off credit card debt, or taking care of unforeseen medical emergencies and many other needs. As long as you can repay and the plan to pay back, there are no hindrances in giving the loan to the lending institutions.
Gives A Chance To Improve Your Credit Score
For instance, if you plan one day to buy a home and apply for a home loan, your credit bureau score will definitely be assessed. This score will tell your capacity for repayment and financial discipline. While a high score will allow you to get a house loan at better rates and quicker, a low score could lead to a loan offer with very different terms. The flexible terms of maturity and longer periods encourage maturity on time. This will eventually build up your credit score and improve it.
Flexible Options To Repay The Loan
You can take personal loans Singapore for a longer-term. You pick the term you want to take out a loan for. Also, Personal Loan has been personalized to help you fulfill the various needs. If you need a higher amount of loan and longer tenure, then there is also EMI Free Loans. EMI Free Loan helps you to reduce your monthly payment by up to 40%. You only serve interest on a monthly basis for a certain number of months and pay equal bullet amounts every 6 months for Principal Repayment. Another major benefit of Personal Loans is that they have long term payback. Therefore, ease of repayment increases even with a greater amount of loan. It’s time to apply for a personal loan here.