A personal loan is one of those loans that offer an unrivalled level of flexibility. There are almost no restrictions on what you can use it for; and often, lenders offer various options of repayment plans, allowing you to choose the duration and frequency of repayment. So, you can easily take out a personal loan from moneylenders, and use it for anything from medical bills to business plans.
Although personal loans are generally very flexible, it does have limits on who is eligible for it. Here are some requirements you should meet if you want to take up a personal loan:
Show proof of income
Most, if not all, licensed moneylenders in Singapore will ask borrowers to show proof of income. This is usually in the form of past salary slips. The purpose is to show the lender that you are gainfully employed, and have the ability to repay the loan. Your income bracket will also give them an indication of what is a realistic repayment plan to set.
Be of legal age
In Singapore, you have to be at least 21 years old to be eligible for a loan. This ensures that borrowers are responsible, mature, and have the financial capability to repay the loan. Expect to have to show proof of your identification and age to the moneylender when applying for a personal loan.
Good credit score
Banks and some moneylenders will look at your credit score to decide if they will approve your loan application. If approved, the credit score will also affect the interest rate that is set. Typically, a better credit score will work to your advantage. However, if your credit score is not so stellar, some moneylenders will still give you a loan, albeit perhaps with a higher interest rate.
High interest rates
For all their benefits, credit cards have one main pitfall: their high interest rates. Miss one payment, and you will incur a significant debt due to the interest rate. Anyone who owns one or more credit cards needs to be careful not to overspend, as this will be highly detrimental to your financial situation.
Comparing credit cards to a personal loan, credit cards may seem very attractive. However, if all you need is a one-time sum of money to fund specific things, then a personal loan might be more suitable. There is a lower risk of snowballing debt with a single personal loan, and they are typically short-term loans with lower interest rates.
There is no one better choice, but making the wise choice involves taking into account your own spending habits, needs, and financial situation.
Why should you take up a personal loan from a moneylender?
Apart from personal loans, moneylenders also offer products like payday loans, and loans for specific purposes like business loans, home renovation loans, and so on. So, what makes personal loans a better choice? What are some reasons you should choose a personal loan over another type of loan? Here are some reasons why:
Once again, the biggest advantage of a personal loan is its flexibility. You can use it to fund various needs, and even split the amount to finance different things. Do away with extra administrative steps required for a business loan or car loan. If a personal loan can cover your needs, it is the ultimate flexible solution for you.
Longer repayment period
Compared to a payday loan, personal loans offer a longer repayment period. Most moneylenders let you choose between a few repayment schemes, which are usually monthly instalment plans. This way, you can make the loan more manageable to repay, letting it be less of a burden to you.
Borrow a larger amount
For payday loans, the amount you borrow is directly tagged to your monthly income, and you need to make sure you can repay the loan by the next month. However, with personal loans, you can borrow a larger amount and take a longer time to repay it. This makes it great for needs where you need a larger sum of money quickly.
Whenever you need an instant cash loan in Singapore, personal loans are a viable option. Besides making sure to borrow from licensed moneylenders, it is also crucial to compare between various moneylenders to get the best rates for your needs.