Not all loans are equal. Some have stringent terms while others are a bit more relaxed. The type of loan you choose depends on what you intend to do with it. Whenever you need credit, you have to understand which exact loan befits your situation. Otherwise, you will take a loan that doesn’t directly apply to your condition. As you commence comparing loans, you will learn that there are different factors that come in play. You need to clearly understand everything before applying for easy cash loans in Singapore. To start off this comparison, here are some of the main types of loans available:
Secured personal loans
From the name, these types of loans require collateral as security for the loan. This can either be a certificate of deposit or a car logbook. It can even be a title deed to a property you own somewhere. Anything that can stand for the value of the loan you are picking is appropriate for use. These types of loans often have lower interest rates when compared to the unsecured personal loans, which is covered below.
This is mainly due to the use of collaterals, which brings down the risks involved. The presence of an asset as a back-up for your loan is enough to guarantee for the creditor. The only downside of such an arrangement is that there’s the potential of losing an asset you used as collateral. For instance, if you fail to honour your debt within the stipulated timelines, the creditor can seize the property under collateral.
Unsecured personal loans
Unsecured personal loans are the direct opposite of secured loans. In this case, there is no collateral used to secure the loan you are granted. They tend to have a higher interest than the secured loans due to the high risk. They are appropriate for major purchases and heavy spending for investment. The downside of such loans is that the creditor will use your credit scores to determine your loan limit and how you can repay a loan. Those who have higher credit reports are more eligible for better loans than their counterparts.
Payday loans
These are short-term loans that cater to instant needs by a person. Most of them are normally due by the next day, hence the name payday loans. Based on your location and rules, there are different rates that lenders use to determine loan amounts and interest rates. They are best for emergency money when you are stuck and don’t know what to do. The downside of them is that they have high-interest rates.
Credit card cash advances
Some credit cards offer cash advance against the balance you have at the moment. Most of these loans are short-term and require fast payback. The service allows account holders to withdraw money at a bank or other financial institution, up to a certain amount, either via an ATM or over the counter. If you have a credit card, this would be known as your credit limit or a certain percentage of it.
They are best for paying cash where the shop you want to purchase from doesn’t permit cash payments. The downside is that you might end up spending a lot on the interest rates and fees. This is because it is different from normal spending using your credit card. The interest begins to accrue once you have made the withdrawal.