Getting Unsecured Loan in Singapore? Smart Tips to Remember

Published On October 10, 2016 | By Susan Golding | Business

Otherwise referred to as personal loans or signature loans, unsecured loans are extended based mainly on the borrower’s creditworthiness.

This type of loan is also not supported by any kind of collateral.

And since unsecured loans are offered without any collateral, a high credit rating is often required for borrowers to qualify.

Unsecured loanscan come in diverse forms—they can be in the form of a revolving credit line with a variable interest rate or it can come with a fixed interest rate and has to be settled at the end of a particular term agreed by both parties.

For those who are considering getting an unsecured loan in Singapore, the following pointers would be helpful:

Amount

Prior to handing in their applications, businesses need to first determine the amount they need and gauge if they can afford to repay their obligation within the agreed time frame.

In line with this, it would be advisable to consider your monthly income and the amount you can afford to set aside to settle the obligation.

Once the key figures have been identified (read: amount that will be borrowed and the money that can be set aside for the payments), the rest should be way easier to figure out.

Lender

Without doubt, looking for the best lender for your needs is not as straightforward as it seems.

True, there are plenty of options available at your disposal especially nowadays

However, finding the creditor that can cater best to your needs would be challenging.

Fortunately, you can easily narrow down your options by asking yourself the following important questions:

  • Will there be additional monthly or weekly charges?
  • Will there be likely penalties for early pay offs?
  • Do they have repayment terms you are happy with?

Eligibility

Obviously, if you won’t be able to provide proof of your identity, getting your loan approved would be next to impossible.

For foreigners looking to secure a loan, a valid employment pass will be required.

Regardless of the nationality however, it is required that applicants are 21 years and above and has a robust employment history.

However, it would be safe to assume that terms of eligibility can differ from one lender to another.

In line with this, it would be more advisable to do a research on a potential lender first prior to getting in touch.

Financial Situation

What is your financial situation at the moment?

Do you have several other existing loans?

If so, it would be recommended that you do not take on any more.

As a general rule of thumb, the overall amount of your total debt repayments should not be more than 60 percent of your total gross monthly income.

Repayment Plan

If you want to steer clear of any penalty charges, it is important that you manage and monitor your expenses including your monthly debt repayments.

If there is a need to change your spending habits so you won’t end up accumulating more debt, then do so by all means.

Proper management and monitoring of your spending habits will do more than just help ensure you don’t bite off more than you can chew.

More importantly, it will help guarantee you will be able to settle your obligation promptly and in full.

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