A personal loan is actually an unsecured loan you can utilise for just about anything — medical emergencies, to boost your wedding budget, or for that much needed family holiday. It’s likewise an excellent way to increase your cash flow during short-term financial emergencies. For instance, you can use a Singapore personal loan to pay off a credit card debt because of its lower interest rate.
Below, AP CREDIT explains a personal loan in the Singaporean setting.
How to Qualify for Personal Loans?
Permanent Residents (PRs), Singaporeans, and foreigners have different qualification requirements. However, those with a yearly income lower than $20,000 are automatically not eligible for personal loans. If you are a Singaporean or a Permanent Resident, you should be earning a minimum of $20,000 every year.
Note, however, that if you’re earning $20,000 to $30,000 every year, the interest given to you may be higher than Permanent Residents and Singaporeans who have a yearly income of $30,000 and higher. Foreigners, on the other hand, should be earning a minimum of $40,000 every year to apply for a Singapore personal loan.
Types of Personal Loans
In Singapore, personal loans are either revolving loans or term loans. A term loan features fixed monthly loan payments and a fixed time period. And while lenders may charge you a processing fee once you get approved for a loan, your interest rate will be lower.
On the other hand, a revolving loan is also referred to as a personal line of credit. Similar to how you use your credit card, you can get credit from a revolving loan anytime you have need for it, so as long you don’t exceed your credit limit. You will be required to pay off a monthly payment of $50 or 2.5% whichever is higher. Know however that due to the flexible terms of revolving loans, they can likewise impose higher interest rates than term loans.
How Much Can I Borrow?
Basically, you may be able to borrow as much as two to six times your monthly income, or $200,000 maximum. The specific amount you may be allowed to borrow will generally be based on your credit history and your other credit sources. Term loans range from one to seven years, with the longer term featuring lower monthly payments, but higher accumulated interest rate.
Loaning in Singapore requires some thought, just as anywhere else in the world. Still, with the city-state’s robust financial system, securing one is a faster and easier exercise than most.