Personal loans are short term unsecured loans, meaning that they do not need any collateral. Typically, you pay them back over the course of 2-7 years in monthly instalments, with interest rates differing between each loan provider.
While it is possible to take out such loans with banks, licensed moneylenders are becoming an increasingly popular option. This is in no small part due to their streamlined and quick loan approval processes, and willingness to entertain borrowers with low credit scores.
There are several reasons why one would want to take out a personal loan. Here are just some of the most common reasons.
A crisis can strike at any time, no matter how well one prepares. Whether it is for an emergency hospital stay or to help a family member out, there will be times when one needs an influx of cash to pay for unforeseen expenses.
In such cases, it may not be feasible to engage with traditional financial institutions for a loan. Loan approval processes can take a considerable amount of time, not to mention the time taken for the cash to be transferred post-approval.
If your home is in some desperate need of refurbishing, or you are moving into a new abode, you may need quite a hefty sum to get everything in order. Renovation loans have a cap on how much you can borrow, and sometimes even the upper limit may turn out to be insufficient.
This could be due to a variety of reasons, from the interior designer going over budget, to a window shattering unexpectantly during the moving process. In these cases, it may not be a bad idea to get an instant cash loan to ensure that the living room does not end up half furnished.
Alternative to payday loan
There are many reasons why one would be tempted to get a payday loan. Their boss could be late in paying out their salary, or they could be falling on hard times and need some financial assistance to tide them through a rough patch.
However, some payday loans have extremely high interest rates, sometimes going for as high as over 20% for two weeks. That is a risk that you may not want to take, especially if it is not certain when payday is going to arrive. In contrast, a personal quick loan tends to have much lower interest rates and similarly fast approval times.
Spread out large expenses
While it is possible to pay for that resplendent wedding ring or that family sedan all at once, that may not be the smartest choice. Incurring such a huge expense could leave your savings dangerously low, making you vulnerable to any emergencies.
By getting a personal loan, the expense is spread across a period of time. You should be able to make payments comfortably while keeping your savings account healthy in case of a rainy day.
For those with debt pending on multiple credit cards, getting a debt consolidation loan could help ease the repayment process. By combining the debt into one loan, borrowers save themselves the trouble of managing various separate accounts.
Most consolidation loans in Singapore have a much lower annual interest rate compared to credit cards, making them a financially viable option as well. What’s more, they help to reduce your utilisation rate by paying off your credit debt, improving your credit score.
With proper planning and strict adherence to the repayment schedule, a personal loan can get you out of a pinch, or help you stay secure while making large payments. To get the best deals and service, you need to do your research.
Fortunately, reliable providers of instant loans in Singapore are plentiful, as long as you know where to look. Here at Easyloan, we provide a comprehensive directory of licensed moneylenders in Singapore. With our extensive pool of resources, you will be well equipped to find the licensed moneylender that can best suit your personal financial needs.