Personal loans are some of the most common types of loans taken by a majority of people. They are usually efficient and convenient when you need cash to finance different projects. Most people use personal loans to consolidate debts and pay for emergency expenses. Some also take personal loans for home renovations or improvements. The number of people taking personal loans has gone up by a great extent. Most people need quick cash loan in Singapore so that they can sort out urgent issues. Here are a few things to note about personal loans, before deciding to take one:

Different Types Of Personal Loans

The two main types of personal loans include; secured and unsecured personal loans. For secured personal loans, the interest rate is a bit lower than its counterpart. This is due to the presence of collateral used to cater for the risks of the loan. On the other hand, unsecured loans tend to have a higher interest rate due to the high risk involved with them. There is no collateral or item to hold and thus, the lender solely depends on your ability to pay.

Their Impact On Credit Scores

As a borrower, the primary thing you want for your credit score is for it to rise. The more it rises, the higher your loan limits every time. Depending on how you are paying for the loan you take, the credit score can either go up or down. A better credit balance can be achieved through personal loans and getting various types of credit help to improve your credit score. As a personal loan is paid off in recurring monthly payments, if most of your credit is revolving, you can maximize your credit mix.

Besides getting a better credit mix, making your personal on-time loan payments helps to build a consistent payment history that can improve your credit score. In addition, it helps to lower the credit utilization rate. Since it is an instalment loan, your credit utilization ratio is not affected by a personal loan, which determines how much of the total revolving credit you use. When replacing revolving debt with an instalment loan, using a personal loan to pay off revolving debt, such as credit card debt, will help you improve your credit scores.

How Personal Loans Work

You need to know how personal loans work so that you don’t go against the dictates. For starters, you need to understand that personal loans are a type of instalment loan. In case you don’t know what an instalment loan is, it is when you borrow a fixed amount of money and then end up paying for it over the course of several months. The loan accrues interest, and so, you will need to pay a higher amount than the one you took. Most personal loans range from 1 to 7 years, depending on the lender.

Also, they are not like other loans where you can use the same account for a new loan. Once you have cleared your payments, the account you used will be closed. Therefore, it is important for you to clearly think about why you need the money before taking it. Your reason should be substantial due to the interest rates involved.

Where To Get Personal Loans

Like any other loan, a personal loan can be achieved from legal moneylenders such as banks. In most cases, many people opt to take these loans from banks, due to the trust and reputation they have. However, you need to understand that banks are not the only source of personal loans. There are equally other credible and reputable lenders offering personal loans to individuals. Some of these lenders include; peer-to-peer lenders, consumer finance companies, credit unions and online lenders.

You need to evaluate all of these lenders and find an appropriate one that fits your needs and demands. Due to the emergence of many online lenders nowadays, you need to properly check for authenticity. This is to ensure you deal with genuine lenders only and not fraudsters.

People take loans for different reasons. Your idea of a loan might be different from the person sitting next to you. Be that as it may, we all need loans from time to time. Either because we have a shortage that needs emergency assistance, or because of a shortage in funds for investment and business. And at times, you may find yourself needing a fast loan approval in Singapore. Whichever reason you hold for taking a loan, there are primary and universal reasons available for the same. For instance, here are some of the five smart reasons for taking a loan:

To finance a purchase

Sometimes you may not have sufficient funds to make an expensive purchase and it may be something vital to your business. Financing depends on whether it is a want or a need. A personal loan can help cater to both, although, you are the one to decide why you should take the loan. Be wise when it comes to taking loans for items because you need to calculate whether or not it is a loan worth taking. It is all the same if you are getting the loan to boost your business.

To improve your credit

Personal loans help you grow your credit score. Having a wide array of loans on your account often helps to boost your credit score by a great margin. Remember, you will need to be disciplined and pay the loan on time, or otherwise stand to lose out on your credit score. As your credit report increases, so does your subsequent loan amounts. To qualify for huge loans in the future, you need to start using the meagre ones to raise your score. So long as you observe punctuality in payment, then you are good to go.

To pay for a wedding

Weddings are beautiful and amazing. However, it takes proper planning and good finances to make a wedding successful. Most of the costs cover a range from payments for vehicles, the venue and catering services. If you are not well-planned, all of these can drain your pockets. Any huge occasion or event, not just a wedding, needs proper financing. And a loan can save you when you don’t have a plan.  Using a personal loan for such purposes will help you evade unnecessary amounts of interest costs. This, however, is pegged on the condition that the rate is lower than your credit card.

For education purposes

If you are a student or have a child in school, you may be overwhelmed with the burden of paying school fees. The best way to go about this is to apply for a loan. Loans for education offer financial end-to-end support. Many things could be provided with an educational loan ranging from the tuition fee to housing and transportation expenditures. This will help in lightening your burden and making it easy for you or your child to continue his/her education to the next level.

To consolidate credit cards

You can consolidate all the charges on two credit cards you have, and take a personal loan which ensures a lower interest rate for you. If you already have debt through several credit cards, you can find it difficult to handle all accounts, however, you only have to submit a single payment with just a loan. If your credit cards are maxed out, the cost ratio will be really high. This ratio will have a significant negative effect on your credit score. You can reduce the use of your cards by paying off your credit cards with a loan.

Irrespective of your financial needs, it is advisable to only borrow money from a licensed money lender in Singapore. Several benefits are associated with borrowing from a licensed moneylender. Every other day, you come across reports on people who have been harassed in the name of repayment by illegal money lenders or whom they term as ‘loan sharks’. However, when you borrow only from licensed money lenders, you do not have to worry about such troubles.

Let us take a quick look at some of the special benefits of borrowing from a licensed money lender in Singapore.

No trucks with harassment for repayment

While they can offer fast cash, unlicensed money lenders often charge high rates of interest and also use harassment to chase after borrowers on the pretext of non-payment of loans. However, you can avoid all this by borrowing only from the licensed money lenders. A licensed money lender in Singapore has to comply with the government norms and laws. In case the lender fails to comply with any of the laws framed by the Singapore government, their license can be cancelled and executives might even have to face severe punishments including jail terms.  As far as repayment is concerned, licensed money lenders will offer you complete guidance so that you are able to repay the loan.

Avail lower interest rates

One of the biggest differences that you will experience on borrowing from a legal money lender is the low interest rate. Illegitimate money lenders often impose extremely high interest rates in order to reap greater profits. However, legal money lenders have to follow the rules set by the “Registrar of Moneylenders” on the interest rates, fees and maximum amounts that can be disbursed to loan applicants for any quick loans in Singapore. The maximum interest rate that can be applied is 4% and all legal money lenders will have to comply to it. Everything works according to a set procedure and in compliance with the laws.

Save your personal information from falling into the wrong hands

Your personal information is critical for your financial security. However, when you borrow money from illegal money lenders, the chances of a data breach or misuse of your information is extremely high. Private information such as your SingPass log in details should never fall into the wrong hands. Thus, you will always find that legal money lenders in Singapore will only carry out any SingPass verification right in front of you. The licensed money lenders in Singapore will always verify your last salary before deciding upon the loan amount to be disbursed.

Always seek loans from a licensed money lender in Singapore to save yourself from unnecessary hassles and hefty interest rates.

Have you ever considered borrowing money from a moneylender? If you found the idea scary, you are not alone. Most people do not view money lenders favourably. Much of this apprehensiveness doesn’t stem from personal experiences, but it originates more from how society perceives moneylenders. As their business involves giving and taking cash, and nothing else, we assume that they will somehow cheat us of our money like a fast cash loan in Singapore or involve us in a scam.

Truth be told, the idea of visiting a legal money lender in Singapore is not as scary as it sounds and here are the reasons why.

Money lenders are perfectly legal

Yes, you read that right. It is perfectly legal for money lenders in Singapore to lend money to borrowers provided they are registered and licensed. All licensed moneylenders are strictly regulated by the government and face severe penalties if they are found to be involved in any misconduct. This means that you can safely borrow money from a licensed money lender without fear of being cheated or unfairly treated.

Money lenders are not loan sharks

Moneylenders are not loan sharks. There is a clear distinction between them. While moneylenders aim to make a living by helping people who are in need of money, loan sharks are there to profit from other people’s misfortunes. Licensed moneylenders are bound by law and closely monitored by relevant government departments and agencies. They want to win the trust of their customers so that they can build a lasting business.

Moneylenders do not charge exorbitant interest rates

Contrary to what you may have heard or imagined, licensed moneylenders do not charge exorbitant interest rates. The Singapore government has placed a cap of 4% for monthly interest for moneylenders. At the same time, the administrative fee (which they are allowed to charge upfront) must not exceed 10% of the total loan amount, and late payment fee must not exceed $60. Moneylenders are required to strictly comply with these limits. If any money lender charges you even a cent more, you can report them to the concerned authorities.

Moneylenders will not harass you

You may have heard of loan sharks harassing defaulting customers and making their life extremely difficult. This doesn’t happen with legal money lenders. They will not harass you if you are unable to pay on time. They will simply charge you a late payment fee. If you refuse to pay up after repeated requests, they may report you to the police. But no one will come to your home or office and threaten to hurt you.

Borrowing is quick and easy

Many people find the process of applying for any loan daunting, even if it is a quick loan. They have heard how banks scrutinise every little detail and take days to process loan applications. This is not true for money lenders. While they do require applicants to submit documents like pay slips and credit history, they will not do any excessive detective work. In most cases, the applications are approved within a day and the loan is delivered to the customer’s bank account within 24 hours.

Therefore, never hesitate to approach a legal money lender whenever you need money urgently. It is perfectly safe to borrow money from licensed money lenders in Singapore.

Facing a temporary cash crunch and have no friends to fall back on? If so, you can consider taking an instant payday loan.

An instant payday loan is just what its name suggests. You get this instant loan against your pay and the loan is deducted from your next paycheck, hence the word ‘payday loan’. As this loan is approved rather quickly, it is called instant payday loan.

Payday loans are quite popular among salaried individuals, and it is not hard to understand why. This loan, offered by legal money lenders in Singapore, has many advantages over personal loans given by banks and large financial institutions.

Want to know what these advantages are and how you can benefit from a payday loan? Read on.

4 Top Advantages of Instant Payday Loan

Quick Cash Boost

When there’s a temporary financial emergency, you need cash fast, right? That’s why there’s no point in approaching your bank or credit card company for a personal during such a time, for they take anything from a couple of weeks to a fortnight to approve a loan.

However, with instant payday loan, you can get the money quickly, sometimes within a couple of hours after verifying and submitting the required document.

Bad credit report is not a hindrance

If your credit score is below par, you can forget about ever getting a personal loan from a bank or big financial institution. However, in case of a payday loan, your credit score doesn’t count for much. You can easily get a payday loan, whether your credit score is high or low.

You must meet two requirements for payday loan. One, your salary must meet the minimum salary criterion. Two, you need to submit a proof of your employment.

No Paperwork

You need to do a lot of paperwork when applying for a loan from a bank be it fast cash or a quick loan. On the other hand, you can apply for a payday loan online. This is another important benefit of payday loan.

Small payback cycle

You are more likely to fall back on repayment in case of conventional personal loans than payday loans. This is because the latter has a very short payback cycle. In most cases, the money is deducted from your next paycheck.

While you can defer repayment in case of payday loan, you should avoid doing it. As you have seen, payday loans offer many benefits that other loans don’t. All of these benefits come at a cost (remember, there’s no such thing as a free lunch): steep interest rate.

Compared to other loans, payday loans charge at a higher interest rate. That is why, it is your best interest to pay off your instant payday loan as soon as possible.

Keep this in mind

While payday loans can be of great assistance at certain times, you shouldn’t make it a habit to take one every month. Also, remember that a payday loan is only for an emergency. Finally, when taking a payday loan, speak to a few licensed money lenders before finalizing one. This may help you get the best possible deal as the interest rate of payday loan varies from lender to lender.