When you need funds, there are many ways for you to fund it. You could borrow from your family and friends. You can also seek the assistance of banks or go to a moneylender or other lending institutions if they can lend you money through personal loans.
In Singapore, people who need fast cash in a short amount of time go to moneylenders since they process personal loans faster than banks. However, just like any other product or service in the market, loans also vary in terms of what they can cover, how long it can be paid and what conditions have to be met by borrowers.
Here are the different loans available for people to avail depending on their needs:
Individual loans are credits offered by banks and the returns it can provide can be at any price. Normally, these types of loans are unsecured and could cover a hundred dollars to thousands depending on one’s capability. Banks would often check the individual’s income capabilities and sources to determine how much an individual can borrow.
When a person wishes to apply for this type of loan, they will have to fill up a one or two pages for their application. Endorsements and processing can take a couple of days before it is finalized and decided.
Unfortunately, the costs of these loans are quite high. Under the current policy of the Federal Reserve, the costs can start from 10 to 12% depending on the bank. The advances you will take from these loans must also be paid within two years, making it unreliable for those who wish to use it for their business.
Considering its amount and short payment terms, this loan is most suited for those who will only need a few amounts of money despite the high interest. It is also good for those who can pay what they borrowed within a few years.
Visa or MasterCard Credit Cards
For those who are looking for credit cards which would work in any country and any vendor, credit cards carrying Visa and MasterCard are preferred.
Visa, for instance, is preferred by many individuals because it is the most familiar credit card line for vendors. MasterCard, on the other hand, is preferred for being the most flexible type of credit card since it can be used to pay educational fees to the basic expenses like buying groceries.
To apply for these cards, individuals simply have to fill up an application form which will check your financial history, source of income and other usual details for financial applications. The applications are processed within 14 days or less for bank applications, while online or phone applications are surveyed within minutes.
Sadly, applying for these credit cards can be tricky when it comes to payment time. Fees for Visa credit cards can cost as high as 20% every year. Some borrowers may also use these credit cards haphazardly since it is mostly thought as a money. As a result, they may pile up a lot of debts as they keep using it without paying it immediately.
Home Equity Loans
Home equity loans are for those who wish to get funds to counter the value of their current home’s value. This type of credit tends to fluctuate very often since it is possible the borrower can get the money in one payment, then get reimbursed for the increase, then get more money.
It is similar to a credit card in some extent since it will help borrowers control their home’s value. Home equity loans are usually payable from 10 to 20 years depending on your preferences.
Normally, this loan come with a “prime rate” fee, which can be both advantageous and not depending on the market. Sometimes, the financial costs of getting the loan can be low. But, if the market changes and prices increase, the financial charges can be very high.
Borrowers also tend to have difficulties when they get this loan because while they like the low financial costs of getting it, it is the same time when the rates start to rise up. As a result, it loses its value because of the changing market.
While it is previously offered by credit card companies, personal loans are now offered by a variety of financial institutions such as moneylenders.
Personal loans can vary in terms of the conditions on when it could be applied for, because some personal loans can be paid immediately when the borrower will get their next paycheck (salary loans).
Although personal loans can be tricky to get unless you are applying through moneylenders, they do have some disadvantages.
- Loan amount varies depending on the client’s credit history. If you have bad credit history, the amount that can be allowed is very small.
- Interest rates for personal loans are very high, making it expensive if one misses their payments.
- They do not regularly check deductibles during the application process.
Independent Company Loans or Business Loans
Finally, this specific loan is for starting businesses or small to medium-sized businesses who wish to get funding, as well as those who wish to support their business. However, those who wish to apply for these loans should raise funds to ensure that they can pay off their loans if their business enters a slow period or something wrong happens.
The amount of money that will be allowed for these loans varies to a couple of thousand to a couple of million dollars depending on the business.
The length of the loan term varies depending on the business. Usually, the loan term can range from five to 25 years. Borrowers can ask the loan company with regards to the financial charges that will be imposed on the loan.
Sadly, this loan is very tricky to get because banks will not approve applications easily due to the borrower’s charge records and the status of their business.
Before you sign up for a personal loan, it is ideal that you first find out what loan would fit your needs and capacities. If you sign up for the wrong one, you may find it difficult to manage the loan you signed up for.
So, before signing, ask and learn everything there is to know about loans in order to make a sound decision for your financial needs.