Personal loans are very beneficial in Singapore and people who want to manage their cash flow or have to meet any emergency situation can go for this loan. Many people do not know how to get a personal loan and they choose the expensive options. The most important factor that people need to consider is the rate of interest charged by banks and other moneylenders. It is better than borrowers choose such a moneylender that provides the loan at the lowest possible interest rate. Such a thing will be very beneficial for those borrowers who have to borrow a large sum of money. The interest rate is decided on the basis of credit score, repayment history and annual income. Some banks also ask processing fees. Here are some of the things, which people need to consider while applying for personal loans.
Repayment period
Repayment period is the period in which a debtor has to pay the money that he has borrowed from a bank or a moneylender. Monthly repayment depends upon the tenure of the loan. If the tenure is long, the monthly repayment installment is low. But this will lead to pay more and more interest, which will make the loan expensive. If people want to reduce the payment of interest, they need to go for short-term loans. While choosing short-term loans, people also need to consider the amount of installment that they have to pay monthly. The tenure that banks or moneylenders offer is in the range of one year to six or seven years.
Rate of interest
People must make a note of it that the interest rate that banks advertise is different from the actual interest rate that they charge. The rate of interest depends upon the credit score and the annual income of borrowers. If there is a tough competition, banks change the rate of interest. This revision occurs frequently so the rate of interest varies from time to time. Besides the interest rate, there is an effective interest rate or EIR which is the real interest rate charged by the banks. There are many factors on which EIR depends and these factors include processing fees, other fees, and the tenure of the loan. There is a rule in Singapore that the financial institutions have to post IR along with the advertised rate of interest.
Maximum amount to be borrowed
Most of the banks allow the people to borrow money for personal loan and the amount can go up to four times of their monthly salary. In such a case, the minimum income on the basis of per year should be $20,000. If the annual income is $120,000 or more, people can get the loan up to eight or ten times of their monthly salary. Banks have to consider many factors like credit score, credit history, and loan repayment before deciding the actual amount.
Fee for early termination of the loan
There are many banks and moneylenders that charge early termination fee. This fee is charged if the loan is paid before the completion of the tenure. Some banks charge $250 while others charge $150.
Processing time of loan application
There are many banks in Singapore that process the application for personal loan at a fast speed. If everything is all right, borrowers get cash very soon. Borrowers must be eligible for all the terms and conditions laid by the moneylenders. They will get the cash after submitting all the documents.
Processing fee
Banks charge processing fee in order to process the loan application. Some banks have fixed rate while some take a percentage from the loan amount.
Promotions
Banks have to face tough competition and in order to compete; banks offer different types of promotion schemes. These schemes include lowering of the processing fee; cash back awards, and many other things. All these promotions are based on some terms and conditions.
Eligibility Criteria
Here are the conditions which make a person has to fulfill in order to get a personal loan
· Income
The first thing that banks see is the income of the borrower. Some banks have fixed that the minimum salary of an individual should be $20,000. Such people can get loan, which is four times of their monthly salary. IF the annual income is $120,000, the amount can go up to eight or times of the monthly salary.
· Citizenship
If the borrower is the citizen of Singapore, then the income mentioned is sufficient. If a foreigner has to take a personal loan, his annual income should be high.
· Age
The age of the borrower should be in the range of 21 years and 65 years.
Wrapping Up
These are the conditions, which the citizens of Singapore and the foreigners need to meet in order to get a personal loan. One should be well acquainted about these above specified factors on how to get a personal loan. If they meet all the eligibility criteria, the loan will be approved within 24 hours.
To discover more on how to find an ideal loan, check out the guide from EasyFind fast approval loan in Singapore.
