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Using Lending Services For Taking Personal Loans In Singapore
Personal loans are borrowed by individuals from banks and other financial institutions for fulfilling any of their financial needs.In Singapore, personal loans can be used to repay old debts, pay off bills, buy a new car, go on a vacation or for anything else for that matter. Once the loan has been taken, the borrower can decide how to use the money.
Personal Loans in Singapore
Various banking and other financial institutions provide personal loans in Singapore. These institutions have their own terms and conditions for providing personal loan assistance which have to be met by any applicant seeking the loan. The loan amount and the loan period are decided by the applicant, while the interest is decided by the bank.
Usually, longer loan periods carry lower interests. At the end of the loan period, the sum of the loan amount and the interest for over the entire period is recovered.
Before you decide to go out and look for the best personal loan deal in Singapore for yourself, you should know about the types of personal loans you can get. There are two types of personal loans in Singapore- Secure personal loan and unsecured personal loan.
Secure Personal Loans In Singapore
When a loan is taken from a lending service against a collateral, then the loan is called a secured loan. The collateral can be any personal item of value, such as property, jewelry, etc. It is quite easy to get a secured loan as lenders feel safe because of the involvement of a collateral. Secured loans, therefore, carry lower interest rates and the repayment terms are also flexible. You can even borrow larger loan amounts through secured loans.
This does not mean that you would have to hand over your property at the time of taking the loan. Only if you fail to repay the loan back to the lender would your collateral be transferred to the lender.
The purpose of the collateral is so that the moneylenders in Singapore can auction it off to recover the amount that was lent to you.
Unsecured Personal Loans in Singapore
Unsecured loans are taken without using any collateral. As a result, they can be comparatively difficult to get. Before giving out an unsecured loan, financial institutions check the credit rating of the person and also perform a background check. This is done to see if the loan applicant would be able to repay the loan or not.
The loan amounts for unsecured loans are lower than secured loans, and also carry higher rates of interest. Failure in repayment of the loan leads to legal actions against the borrower for recovery.