Bank Loans in Singapore (2017 Update)
If you require money that you do not have, perhaps you should consider taking bank loans. However, you should note that these bank loans usually take a longer time to be processed. If you have an URGENT need for money, money lenders review are still better options. With competitive interest rates, many loans offered by money lenders are just as good as bank loans.
4 types of loans offered by Singaporean banks
A bank loan is an advance sum of money given to an individual by a bank, financial institution or moneylender that is expected to be paid back with interest after a specified period of time. Lenders offset the risk of money borrowed by charging interest.
Loans can either be secured or unsecured. A secured loan requires one to pledge an asset such as a house, boat, car or piece of land as collateral for the loan. If the borrower fails to pay back the loan or defaults, the lender takes permanent possession of the asset and is allowed to liquidate it in order to recover their money. The unsecured loan option is where the borrower has no collateral and the lender has to rely on previous banking history, employer cooperation to deduct monthly premiums on their behalf. If the borrower fails to repay the unsecured loan, the lender has no right to take anything in return.
There are many avenues that one can use to get loans in Singapore. There are banks like HBD, microfinance institutions, family, and friends. But when all other options are exhausted one can turn to moneylenders who also have quick and flexible lending solutions but also impose hefty interest rates and penalties.
This article has listed the 4 main types of loans that can be accessed from banks in Singapore.
In Singapore, personal loans are the most popular and can be accessed from almost any bank. There are no restrictions on how the loan is used and this includes holidays, wardrobe shopping and even paying for household bills. The advantage of personal loans is that the paperwork required to qualify is much less compared to home or car loans. Some banks can process these loans in less than a day as there is no requirement for collateral. The main disadvantage with this type of loan is that the interest rate will be much higher since it is unsecured. In addition, many borrowers may not qualify for this arrangement as only people with high income ($30,000) or above who must be below 60 years can qualify.
The banks conduct credit scores since they do not collect collateral documents from the borrower. If their credit score is good it means they are capable of paying off the loan.
Education loans are very common in Singapore. Despite the fact that many parents are willing to sell family property to put their children through higher education. Some are not fortunate enough to own property and are force to take education loans. The good thing is that the only important qualification required is for one to be a student. The approval rate for those who have all the requirements is very high. Interest rates are pretty low to encouraging individuals to pursue higher education. The only downside here is that depending on the course and amount taken, the loans can add up to over $100,000 in the four, six or eight years period which leaves new graduates with hefty debts when they embark on new their careers.
The main difference between this loan and others is that it has to be pay back within a few weeks to a month. It is intend to assist individuals get to the next payday. And therefore must be pay as soon as the next pay cheque is receive. The disbursement for this type of loan is instant as long as one is emplod and is channeling their salaries through the bank they intend to borrow from. The problem with this type of loan is that it has extremely high-interest rate if not paid on time and can easily affect ones credit score. The borrower will only qualify to amounts that are pegged on their salaries.
Housing Loans from Banks and Housing Financing Institutions
This is the biggest loan an individual can qualify for. For those looking into purchasing homes or some other form of real estate, then this is the best option. The loans are secure by the properties that one is buying. This means that if one does not make the payments on time. The bank or mortgage financing institution like (HBD) can take possession of the house. Or property and auction it to recover their money. Mortgages are very good because they help people purchase properties that would have otherwise taken years to save for. The payment period is structure in a 10, 15 or 30 year plan. This is with tax-deductible interest that is fairly low compare to other loans.
This list is not comprehensive and the advantages and disadvantages may vary. After all, depending on government regulations and the bank or financial institution. One must always conduct due diligence with thorough research to understand the terms clearly before committing to taking a loan. This is because liability can ruin both career and personal life. Therefore individuals must take precautions when making decisions that may affect them or their loved ones in future.
If you find yourself ever needing an urgent loan, please contact Credit Review. We are able to provide you with sound financial advice. As well as recommendations about which option you should take. If you are unable to apply for a bank loan, fret not. We have many options when it comes to money lenders in Singapore as well. We will recommend you only the best money lenders in Singapore. So contact us today, or drop us a message.