Money problems can be stressful and even difficult to manage. You might consider applying for a personal loan to help you get over your financial problems. Find out more about personal loans, and how they can make your dollar go further.
Although not everyone is willing to take out a personal loan, if you have financial problems, this loan offer may be your only option if you need money urgently for some unexpected circumstances.
Personal loans – What are they and how do they work?
Individuals can apply for personal loans from lenders regardless of their purpose as long as they meet the eligibility requirements. You should know that GreenDay also does personal loans.
Personal loans are based on factors such as income, creditworthiness and repayment ability.
You can borrow as much as four to eight times your monthly income depending on what the banks offer. However, high-earners who earn more than $ 120,000 annually have higher loan thresholds.
Personal loans, unlike credit cards and other types of loans, are unsecured. You don’t need to secure your loan with collateral such as your home or your car. You, the borrower, are responsible for repaying the loan amount and any interest and fees.
You must make a fixed monthly payment, including interest, over the credit term you have selected. It is usually between one to seven years.
You could save money on interest with personal loans
Personal loans are a better option than just swiping your credit card and hoping for the worst. There’s no reason to be a fool with your money.
Personal loans are typically lower than credit cards in Singapore, which have a rate of 26.9 percent per annum. They come with a 3.5 percent to 10.8 percent interest rate.
Let’s take an example: A $ 5,000 personal loan is better than a $ $5,000 credit card debt. However, there are no additional charges on the credit cards and you must pay $ 200 each month before the due date.
|Annual interest rate||Monthly payment||Repayment period||Total interest paid|
|Private loan||3.5 percent pa (EIR starting at 6.4%)||$ 153||3 years||$ 508|
|Credit card||26.9 percent pa||$ 200||3 years, 2 mois||$ 2,415.08|
Three Tips to Use Personal Loans to Your Advantage
1. Only borrow what you need, not what you want
There is no free loan anywhere in the world. Every loan has a cost, interest, fees, and charges. Loans that are kindly given to you by close friends or loved ones are the only exception.
You should not borrow luxury bags or designer clothes.
If you find yourself in an urgent situation and need to borrow money immediately to cover something unexpected and urgent, ensure that you only borrow what you really need and you can repay your monthly repayments on time.
It is not difficult to remember that debt should be avoided.
2. Compare personal loans to find the right loan for you
Personal loans are offered by many financial institutions and licensed moneylenders. To find the right loan for you, it is worth comparing personal loans.
To get an idea of the actual interest rate on the loan that you are applying for, review the calculation and the processing fees (if applicable).
While you’re at the bank, keep an eye out for promotions and offers. Some banks offer perks such as instant loan approval and disbursement or exemption from annual credit cards fees. You can even get cashback for your first monthly installment.
3. Make sure you are clear about your repayment plans
Make sure you understand the terms of your loan and that your monthly installments are paid on time.
If you cancel your loan, or repay the entire loan amount before the loan term ends, an early repayment fee may apply. It could be between $ 100 and $ 250.
The fee will vary depending on which bank or financial institution you have obtained your personal loan.