Get The Best Personal Loan Offers in Singapore (2020)
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At Easy Credit, we help you source for the best interest rates for personal loans in Singapore from private lenders. This information will help you compare personal loans against different types of interest rates.
While looking for and comparing personal loans in Singapore, you may have come across different interest rates and probably wondered what they meant. Let’s look at these interest rates in-depth to help you understand better and make a wise choice.
Generally, banks are not strict to Singapore residents and PRs when it comes to the minimum requirements for obtaining a personal loan. But if you’re a foreigner, it may be quite challenging for you especially if your income per month is less than $3,000. Some banks may even demand that you have a higher monthly income so that you can get the loan.
If you’ve tried to apply for a loan from a bank and haven’t been successful, you can try getting a private personal loan from a licensed moneylender in Singapore. The Ministry of Law has a list of all the licensed moneylenders – only borrow from these to prevent problems in the future. They have undergone strict scrutiny to ensure they’re legitimate and they follow all the required guidelines.
Singapore moneylenders are required by the law to explain a loan’s terms and conditions in a language you understand. Therefore, be keen, listen, and read carefully to ensure you’re comfortable with the terms and conditions indicated. If there is something you don’t understand, ask the lender to explain it to you. Don’t take the loan is something is unclear, no matter how desperate you need it. If you’re not comfortable with one lender’s terms, there are others available. Shop around and compare their terms until you find a licensed moneylender who completely satisfies your needs.
Interest rates charged by moneylenders can be as high as 4% per month. Therefore, borrow the smallest amount depending on your needs and for the shortest repayment period that you can manage.
Advertised interest rate or EIR? Which one should you look at?
The effective interest rate or EIR represents all the charges you’ll incur when taking a personal loan, including the processing fees. Therefore, it offers more accurate information as compared to the advertised interest rate. However, the interest rate shouldn’t be the only factor to consider; you should take into account other factors as well.
Which monthly installments are right for you?
When taking a loan, make sure you can manage its monthly installments. However, don’t divide the loan over a long repayment period just to lower the monthly installments. While you may be keeping the monthly costs down, the total interest paid at the end of your repayment period will be very high.
Which is the right loan amount to take?
The bank is responsible for stipulating the maximum loan amount a borrower can take, and it’s usually four times a person’s monthly salary. However, don’t borrow a loan amount you can’t afford or you’ll struggle to repay – take the minimum amount possible. Since lenders charge interest as a percentage of the total amount, the lesser the amount, the lesser the interest.
How long should your loan repayment period be?
When taking a personal loan, choose the shortest loan repayment period you can manage. If you choose an unnecessarily long period, the interest will add up, and you’ll pay more in the long run. Balance between a short loan tenure and an excessively long tenure to ensure you don’t pay more, and at the same time, to ensure you won’t be under pressure.
Are there any other options apart from personal loans?
If you want to start a business or do something like a home remodelling, check to see if you qualify for a special bank loan like an SME loan or a renovation loan. Since the bank knows what you’re planning on doing with the money, they consider these loans as less risky and offer them at reduced interest rates compared to personal loans.