Many times there is a sudden need for money to meet some emergency. It may be meeting some unplanned medical expenses, some education expenses of the kids. Again many people take personal loans to meet a sudden business commitment. These needs are often unexpected, and one does not get enough time to apply, wait and secure the traditional loans from the banks. If you are in Singapore, where life moves at a fast pace, securing personal loans is the best option in emergency financial need. They are approved and disbursed fast to meet your ends. However, before applying for personal loans from licensed money lenders in Singapore, one should make sure to apply for the same with the lowest interest rate. Following some guidelines before the application can make the repayment easy without burning a big hole in the pocket.
A personal loan is nothing but an unsecured loan where no collateral guarantee is required. One does not need to put any assets under a mortgage to get personal loans. The money lenders, therefore, take more risk while giving personal loans. Following some tips can help to get personal loans with the lowest interest rate in Singapore.
Tips to follow while applying for a personal loan
- Keep your credit score healthy – While most money lenders do not bother about the credit score, they have a glimpse of the loaner’s credit rating. It is; therefore, best to keep your credit rating high so that a strong reputation of repayment can be portrayed. A good credit rating can help to get personal loans with low-interest rates. The licensed money lenders can trust the person more and provide loans at a low interest. Even one can negotiate with them harder if the credit score is healthy.
- Shorter repayment period- The longer the repayment period, the more is the interest rate. Licensed money lenders working in Singapore take more risk if the repayment period is long. Therefore, they intend to recover the principal amount as fast as possible. Hence, they charge more interest rates when the repayment period is more. Keeping the repayment term shorter helps to get loans with a low-interest rate in Singapore.
- Understand the interest rate – There are two types of interest rates. One is the applied interest rate or AR, and the other is the Effective interest rate of EIR. It is time to know the difference between them before approaching any lowest interest rate personal loan Singapore money lender. In the applied interest rate scenario, the principal amount remains the same despite the reduction of the same for each repayment. One has to pay interest on the principal loan amount throughout the repayment tenure. In an Effective interest rate, the principal amount of the loan decreases with each repayment, and the interest compounds on the balance amount ad reflected as outstanding dues. We can say that the actual cost of borrowing reflects after making each repayment installment on time. It is best to compare both before applying for a low-interest rate personal loan.
- Look for the charges – Many banks and money lenders in Singapore asks for various other expenses like processing fees, annual fees, late repayment fees, change in tenure fees, and many more. Carefully read all the terms and conditions, look into the various charges, and then only apply. If there are many “other charges,” it adds up to the principal amount. And one has to pay more interest while making the repayment. Apply for a personal loan, where add-on charges are less, and apply for them to meet your emergency financial need.
- Compare the interest rates- Every bank and the financial institution or licensed money lender operating in Singapore have their website. It is best to visit the websites and compare the interest rates. You should make sure that no lenders are charging more than a 4% monthly interest rate. The Government of Singapore had put this maximum capping, and if anyone is taking more than 4% monthly interest rate is doing illegal business. You should avoid these types of moneylenders giving personal loans even if the loan processing and disbursement are fast.
- Avoid loans from credit cards – Do not apply for personal loans through credit cards or withdraw money using them. Although you can get instant cash, the interest rates are high, and you pay much more while completing the repayment. It burns a big hole in your pocket, unlike the personal loans you take from banks or licensed moneylenders working in Singapore.
- Submit your salary slip – To get a personal loan with low interest, make sure to submit your latest salary slip and other identity documents. Your salary often determines the interest rates that the money lenders charge. Again, having a clear identity document and a good credit score allows for getting a personal loan at a low interest. The main thing is that how convincing your credibility is to the money lenders. So keep everything clean and clear the overdue if you need a personal loan with low interest.
Overview
It is not difficult to get a personal loan in Singapore at a low interest if you follow the above tips. Visit the various websites of the moneylenders and compare the interest rates. Look into the terms and conditions and then only proceed with the application. Only take a personal loan if there is an emergency. Taking frequent personal loans can reduce your credit score. The moneylenders may think that it is your habit of taking personal loans as you do not have a proper financial plan. They may feel that you are wasting the loan amount and charge high interest. Personal loans are for meeting emergency cash requirements and avoid using them for any other purposes. Do not worry about getting a personal loan at an emergency time, as the money lenders working in Singapore work even on Sundays. Get 2 to 4 time’s loan of your salary and meet your requirement. So follow the tips and play safe to get personal loans at a low interest from moneylenders in Singapore working with a license.