There are many types of loans available today and people can avail of any of them as per their needs. People are always in need of cash and sometimes due to an emergency; they need a large amount of money. In such a case, they can avail of a personal loan. There are many things that people need to consider while taking the loan and in this article, we will discuss them.
Fees of the loan
People can see many types of ads in which personal loans are mentioned with a 0% interest rate. But this is not true. Banks and financial institutions lend personal loans with some percentage of interest. They also take origination or processing fee for the loan. The deduction of the fee is done after the approval of the loan. The fee is 2% to 3% of the total loan amount. Some other fees that a borrower has to pay include
- Tenor change
- Late fee for payment of the loan
- Fee for canceling the loan
- Fee for early redemption
Rate of interest for a personal loan
Nowadays people check personal loans online and provided by different banks. The rate of interests provided by the banks and financial institutions are also different. There are two types of interests charged on this loan. One of them is nominal interest and the other one is the effective interest rate. The nominal interest rate is always lower than the other one. People must use the effective interest rate to compare the offers provided by different banks. It will provide better options in comparing the loan rate of different banks. An annual flat rate is another thing that people need to consider before taking a personal loan. They have to take the help of the best money lender and one of them is Crawfort (Singapore).
The credit rating of the borrower
People can get personal loans easily in Singapore. Some of the banks provide the facility of approval within 24 hours. If people want their loan to be sanctioned easily, they have to make sure that their credit score is good. If this is so, the bank will not reject the application and processing will be done at a fast pace. People need to make sure that no bad records are there in the credit score. Some of the bad things, which should be avoided in the credit score include late payments, credit applications are not sent on time, and many more.
Purpose of the loan
There are many types of loans but people prefer personal loans for emergency purposes. This loan takes less time to get processed. People may have to pay school fees or may have to improve their house. In such cases, a personal loan is the best option. The interest rate of this loan is also low in comparison to other types of loans. One more reason that people take this loan is that they get a large amount of money for usage.
Tenure to pay the loan
Many banks in Singapore provide a time of 12 months to pay back the loan. People can repay before time also. The tenure is set so that banks can get the interest on the loan amount. If people pay the loan before time, they have to pay the fees of early payment. People need to think about their needs and then opt for this type of loan.
Monthly income
The moneylender will ask about the monthly income of the borrower and based on which money can be lent. The borrower needs to find the best money lender in Singapore and one of them is Crawfort (Singapore). The borrower will qualify for the loan only if he has satisfactory monthly income, which can be between 20,000 to 30,000 Singapore dollars. After qualifying for the loan, the borrower can take a loan of a huge amount, which can be three to four times more than his income. People who belong to Singapore and have a permanent job are preferred by banks and financial institutions.
Collateral
There are two types of personal loans, which are secure and unsecured. If a borrower is planning to take a secured loan, he has to provide a collateral. If he is unable to pay the loan, the lender can take the thing provided as collateral. In the case of an unsecured loan, there is no need for collateral. But people have to pay a high rate of interest. People also have to follow strict terms and conditions in the case of unsecured loans.
Wrapping Up
These are some of the things, which people need to consider while taking a personal loan. People can either take secure or unsecured personal loans. In the secured loan, collateral is needed while this is not the case with an unsecured loan. Borrowers have to give a high rate of interest for unsecured personal loans.