Financial Loan Facts

There are many essential facts surrounding personal loans that you probably did not know. Yet knowing these facts can help you make an informed decision when it comes to borrowing a personal loan in Singapore. Without wasting time, let’s get to some of those facts:

1. Bankruptcy, Poor Credit Score and Collateral Are Not Barriers to Getting a Personal Loan

One thing many borrowers love about personal loans in Singapore is that they can be accessed even by borrowers with a bankruptcy status or poor credit score. Most importantly, these loans are offered without collateral, making them a great choice for many borrowers who have no important assets to use as collateral.

2. Personal Loans Are Characterized By Fixed Interest Rates

Personal loans Sg come with fixed interest rates, which can be quite beneficial to the borrower. For instance, a fixed interest repayment plan allows the borrower to manage your finances better. No unexpected interest rate hikes due to inflation, new government policies, etc, making it easier to budget.

3. Not All Personal Loans Have High Interest Rates

There are two types of personal loans;

Secured loans. Unsecured loans.

Just as the name implies, secured personal loans require collaterals hence they are less risky. The advantage of this is low interest rates. In fact, these types of loans have the lowest interest rates as far as personal loans are concerned. Unsecured loans, on the other hand, do not require collaterals and lenders consider them highly risky. As a result, they come with very high interest rates.

4. Personal Loan Interest Rates Will Vary from One Lender to Another

The amount of interest rate on a personal loan will depend on the financial institution you are borrowing from. As such, it is imperative that you look for an institution that offers the lowest interest rates on all types of personal loans Sg. That way, you will be able to save on the cost of your personal loan Sg.

5. Personal Loans Are Characterized by Fixed Repayment Periods

What is the repayment period for a personal loan? Is it a couple of months, one year or a longer duration? None of these is the answer. A personal loan repayment period is decided mutually by both parties (the lender & the borrower), before agreeing on a fixed repayment period. It can be a couple of weeks, months or years, depending on the mutual agreement between the two parties.

6. Personal Loans Are Harder to Get

One of the key setbacks of personal loans, especially unsecured loans, is the fact that they can be very difficult to obtain. Borrowers have to undergo an evaluation criterion that is more difficult to pass than those of other types of loans. But that’s just because these loans are considered higher risks and thus lenders have to thoroughly evaluate borrowers just to be certain that they are going to repay.

Final Thoughts

Personal loans can be accessed regardless of a bankruptcy status, poor credit score or lack of collateral. In addition, these loans are characterized by fixed interest rates, and fixed repayment periods. What’s more, they come with both high interest rates and low interest rates that will vary from one lender to another. Finally, personal loans can be very hard to get, owing to the thorough evaluation process put in place for the borrower.