Different banks will offer a different kind of features while choosing a personal loan. You must do your research before choosing a personal loan. Things you should consider before applying for a personal loan in Singapore are:
- The maximum amount you can borrow – The Monetary Authority of Singapore (MAS) has stated that you can borrow amount up to 12 times your current monthly income. However, some banks will allow you to borrow money only up to 4 times your current monthly income only if your income is 20,000$ per annum for banks including DBS/POSB and 30,000$ per annum for banks like HSBC. If your annual income is over 120,000$, then banks may consider you to borrow over 8 to 10 times. This is mainly done to boost the economy and to ensure that you don’t suffer from any difficulties.
- Repayment period– In Singapore, banks will offer you personal loans for a period of up to 5 to 7 years. Logically, the longer you are taking the loan for, the lesser will the amount of interest charged. But, you will end up paying an amount more than your loan amount. This it is advisable to choose the shortest loan term so that you don’t end up paying too much. Make sure that the interest payment is within your reach and you must be able to comfortably repay it. The repayment period for people with guaranteed jobs is 7 years in the case of HSBC but otherwise, it is 5 years.
- Credit score– If you have a good reputation and a high credit score in the market then it will be much easier for you to get a personal loan in Singapore from companies like Easy Credit Singapore. A credit score largely determines your credibility in the market. How long do you take to repay any borrowed amount? If you don’t have a good credit score then it will be difficult for you to get the personal loan. A credit score between AA to CC is considered good enough but anything lower than that would make it even more difficult. A record is prepared from a credit provider which shows your credit payments history. If banks see that you have acquired a great deal or have a tremendous measure of credit accessible to you that you can obtain utilizing charge cards and personal loans, they might be hesitant to advance you more, for dread that you won’t have the option to take care of everything. Various factors may influence your financial assessments are how much cash you owe altogether; whether you have applied for such a large number of credit loans too rapidly; whether you’ve made any late installments or defaulted on your advances; and whether you have a background marked by dependably making installments.
- Interest Rate– Bank officials might try to fool you by saying applied interest rate and the effective interest rates. An effective interest rate is the one that is charged on the customers including processing fees and other charges. Interest rates advertised by the banks may be completely different from what they charge you. POSB is currently offering rates as low as 3.88%, but the fine print says that the interest rate offered to you is based on your credit and income profile. The loan rates will vary from time to time, depending on the economic condition that the country is going through. In Singapore, banks are required to show the effective interest rate next to the advertised rate so that the people know what interest rate will be charged.
- Promotions: On account of solid rivalry from different banks, banks will in some cases hold advancements, either as low-loan costs, postponed preparing charges or cash back rewards. A few banks may significantly offer store vouchers now and then.
- How early can you get the loan– Depending on whether you are ready with all the documents required, you can get a personal loan easily. Some banks also offer to provide personal loans online (subject to terms and conditions). Usually, the loan amount is processed in a couple of days.
- Processing fees– You need to look out for the processing fees charged by different banks. Some banks may charge a high processing fee while some may charge a low processing fee.
- Total Debt Serving Ratio– Total Debt Serving Ratio or TDSR is an initiative started by the Government of Singapore that limits the amount of money you can borrow. Also, banks should not provide too much of financial assistance. While applying for the personal loan, if you already have a home loan or a car loan or any other loan, then your loan amount will vary from the one you have applied for. The loan amount can almost be reduced to 60% of what you have applied.
Now that you know what all things you must keep in mind before applying for a personal loan in Singapore, be sure you are prepared with all of this. It is not a hassle to get a personal loan in Singapore. Opt for esteemed organizations like Easy Find Singapore.