A personal loan is an unsecured loan that you can use for pretty much anything you want. Be it for a medical emergency, family holiday, a brand-new car and whatnot. With some licensed moneylender providing quick application process, the probability of getting instant loan approval is much higher too.
Acquiring a personal loan is a great way to boost your cash flow to get past a short-term financial emergency. For example, if you find yourself with a credit card debt, you can consider paying it off with a personal loan which usually has a lower interest rate. Take note that a personal loan isn’t the same as a debt consolidation loan, though. To give you a gist, a debt consolidation loan refers to when your total interest-bearing unsecured debt amounts to a total of 12 times your monthly income.
So, if you are interested in taking up a loan – you have to fully understand what are the requirements needed before you apply for a fast loan. To help you make the right decision, then here are three questions to ask yourself before proceeding to the next step.
1. Can I do without a loan?
Often, the boundary between a ‘want’ and a ‘need’ can overlap. If obtaining a personal loan is something you want, then perhaps it’s time to reconsider. If it falls under a ‘need’ category, then question yourself if you really need it now. If you do need it, but you don’t necessarily need it urgently, then you might be able to do without a loan.
Think if there are any alternative sources of income to consider, such as borrowing money from a family member or close friend instead. Another option is by requesting for your salary in advance from work. It’s always best to explore your options!
2. Am I able to pay it back?
Is paying back your loan within your financial capability? If not, then it’s best not to otherwise your loan will end up snowballing.
If it’s your first time applying for a loan, don’t get caught up at the possibility of getting a quick loan. Instead, read the terms and conditions of the contract thoroughly. For any doubts, clarify them with your moneylender! Take into account the additional payments you’d have to make, such as interest and late fee. One tip is by thinking of how much left you have to spend each payday, after deducting the amount required to pay off the loan.
3. Does this loan package suit me?
There are many forms of personal loans available. Source around and consider your options to see if there’s a loan package that perfectly suits your unique circumstances. For example, an education loan is catered towards covering tuition fees, and might even offer an advantage as compared to a general personal loan.
If your answer is no, yes and yes respectively, then go ahead with getting the loan! Either way, it’s best to speak to a professional with rich expertise as they’d be able to advise you according to your circumstances and financial needs.
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