Looking for a personal loan, there are various reasons we look for a personal loan. It might be due to a family or medical emergency, marriage, clearing a student loan, or paying a credit card; no matter what the purpose of the loan is, we always look to the banks or the registered money lending institutions for the best personal loan offers they have to provide their customers.
In all these, a fundamental question arises How to find the Best Personal Loans. Before looking for the best personal loan, it is imperative to understand how a personal loan in Singapore work does:
In Singapore, taking a personal loan means receiving a lump sum of money based on the approved loan amount. But when it comes to repayment, the payment does not only stop by just paying the lump sum amount of the money taken. There are Interest charges and other fees part of the amount apart from the lump sum amount taken. The total amount of money must be repaid within a specified time by your bank or the moneylender.
Usually, most personal loans have fixed interest rates and repayment periods. This means that the amount taken needs to be repaid on an instalment basis that can span some months or over the years. It allows the borrower to repay the interest rate plus the principal amount with an amortised loan. It does allow the borrower to prepare for their repayment schedules by considering their savings as well.
There are two ways of taking loans in Singapore; one is from the bank, and the other is licensed money lenders. Here are a few pros and cons one must be aware of before applying for a loan from licensed money lenders.
Pros:
- With advancements in technology, applying and the disbursement of the loan is faster. Gone are the days when you had to fill an application and visit the office. The application is reviewed with all the criteria. Once all the requirements are fulfilled, you will be called again to check the agreement and signature; once all these are completed, it takes 24 hours to 48 hours for the amount to be credited to the account. But now all this happens with just a click on the computer, which saves lots of time.
- Eligibility: Licensed money lenders provide loans for almost everyone; one can easily fit into their eligibility criteria. It is perfect to meet any emergency expenses.
Rejection: There are less likely chances of an application being rejected by the money lenders and these lenders. Visit Crawfort Singapore.
Cons of taking money from licensed money lenders are:
- First, you will find a higher rate of interest compared to all other financial institutions.
- Lower amount approval, if you are looking for a high amount, then licensed money lenders are not for you as the maximum loan amount provided by the lenders is up to six times the monthly income, which is almost 10-12 times in the bank.
Pros of applying for a loan in a bank:
- A higher amount of loan can be taken from the bank up to ten times the monthly income.
- Since there has been a drastic change in technology, so the majority of the banks are accepting online loan applications. As with the change in time, the process of loan disbursement has been reduced.
Cons:
- Banks are strict when it comes to checking the credit history, which makes the chances of getting a loan from a bank low until the credit history and the relationship with the bank is good.
- Wait time in the bank is more when applied for a loan. Usually, the bank takes 3-5 working days to process the loan due to the scrutiny of the borrower’s documents.
Conclusion
The details mentioned will make it easy to understand the nature of the loan process in banks and licensed money lending institutions. Before applying for a loan, it is always advised to cross-check the application to have a higher chance of approval of loans in any banks across Singapore. You might notice a slight change in the process and the interest rates in the loan followed by the bank in other countries.