Taking out a loan can be confusing. This is especially so in a country like Singapore that has more than 157 licensed moneylenders, in addition to traditional lending institutions such as banks. It is difficult to find the right licensed money lender in Singapore.
Although most people have an idea of what they should be looking for in a loan, few take the time to properly shop for loans and carry out comparisons in order to get the very best deal available. If you are a first-time borrower, then you may need a short basic guide on personal loans:
Carrying out a personal loan comparison in Singapore
In order to review and compare the personal loans available, you must first ask yourself several questions as follows:
What will the money be used for?
The idea is to get the best loan for your need. If you are looking to purchase a car, then the best loan for that purpose may be a car loan. A personal loan is ideal for emergency situations, to help you out with cash flow, to pay for personal needs like a wedding, a much needed vacation and the like. It is important to use the money for its original purpose. It is unfortunate that some people take out a loan for a particular purpose and then divert some of it to other things, thus falling short of meeting the original need.
The repayment schedule.
This is something that must be considered very seriously because you want a loan that you will pay back comfortably. If the loan calls for bi-monthly payments and you can only pay once a month, you need to speak up and have them amend that if possible. In your personal loan comparison, you must be comfortable with all the terms of the loan if it is to be a right fit for you.
You must consider all the penalties pertaining to the loan.
Most lenders not only charge a penalty for late payments, but also for paying off the loan early.
The total cost of a loan includes the interest paid and the fees that go with it.
Make sure you understand what the fees are and when they are to be paid. Some fees will be paid upon disbursement of the loan, while others will be calculated into the monthly payment. Find out what they are and how they affect the cost of your personal loan.
Compare the interest rates offered in the personal loans, but always view this in light of other penalties, fees, and terms of the loan. The interest rate may look good upfront, but when you add in other costs, you could end up paying more. Additionally, the interest rate may be good, but other loan terms may not work well for you. Look for an all-round good deal.
When carrying out a personal loan comparison Singapore it is important to consider eligibility requirements.
Some of the factors include monthly income, credit history requirements, employment, and minimum age. Looking at this first will help you eliminate those lenders whose eligibility requirements you do not meet. Should you have any questions in this regard, you should contact the lender directly prior to putting in an application.
Are my needs met by the loan?
Remember that you and the lender should both be satisfied with the loan. Ensure that the personal loan can give you the amount of money that you need. Some loans have a maximum limit, which may be less than what you need. If you have another source of funding with which you can top up, there is no problem. However, if you don’t, it may be better to find a lender that can provide all the money you need. How long does the application process take and will you be able to get your money in time to meet the need? If you are looking for emergency funds, then same day loans will do well. If you can wait longer, then look for a lender that can meet your requirements as well. Be sure to also find out how they will be getting the monthly payments. Will it be by bank debit or a check? Work with what you prefer.