What is personal loan Singapore ?
About a decade ago, getting personal loans have become very popular in Singapore. These personal loans are unsecured, which means that the reasons for getting the loan would not be asked. The person applying for the loan does not need to explain the purpose of the loan he is applying for.
What do you think of that?
A loan without collateral which you can use for apparently, any reason you want. Does it not sound like a dream? Well, that is exactly what personal loans are. The downside is that, the interest of this kind of loan is way higher than secured loans like car loans, house loans, etc. One more thing to be aware about this kind of loan is the time allotted to pay back the loan made. Usually personal loans are given shorter time to be paid. The usual time span to pay them is around 3 months to 1 year.
How much can you borrow?
So you want to ask, if there is no collateral, how do they know the maximum amount of money they should lend you? Well, in Singapore your monthly income and your loan usually amounts to a multiple of your income.
For secured loans, there is no restriction. For unsecured loans, you can obtain:
- Up to $3,000, if your annual income is less than $20,000;
- Up to 2 months’ income, if your annual income is $20,000 or more but less than $30,000;
- Up to 4 months’ income, if your annual income is $30,000 or more but less than $120,000; and
- Any amount, if your annual income is $120,000 or more.
When should you get a personal loan?
Sometimes, because you think that personal loans are easier to get than secured loans, you are tempted to get one without really thinking about the cost of it. There are things you should ask yourself first before getting a personal loan.
The first question to ask is: Do I need it badly?
If for example, there is this cellular phone that you really want to buy, a bike that just came out of the market or a trip to somewhere you have really wanted to go to ever since you were a child, you might just be tempted to get one. But the big question is: should you? Always remember that a personal loan has interest rates so you will most likely be overpaying that phone, bike or that trip.
Second is: Are you not going to regret it later on? If your answer to first question is yes and to the second question is no, then go on and get that awaited personal loan!
Situations on getting a personal loan to pay debts with higher interest can also happen, if that is so, analyze which one would benefit you more! So if you happen to go to Singapore, or if you are living in there right now, and you want to consider getting a personal loan, think about those questions. And if a situation like the above happens to you, compare the personal loan packages of different banks before getting one!