Types of Unsecured Personal Loans in Singapore

Imagine you have planned a foreign trip. And a trip abroad can be a bit expensive. The amount of money that you have saved for the trip is not enough. And you are very reserved to ask for it from your parents, friends and relatives. In such a situation, you go to a bank to take a loan. Or you have a wedding planned. But suddenly, you see a deficiency. You can also have a medical emergency where you need more money. In such circumstances, you go to the bank or a licensed money lender to take a loan.

Know about your loan

But before taking any loan, it is always better to have some knowledge about it. There are various types of loans available like personal loan, business loan, home loan etc. Each loan serves different purposes. And there are a lot many things to know before applying for loans.

Secured and unsecured loans

The loans are also two types: secured and unsecured. In the former type, collateral is compulsory. In the latter type of loan, collateral is not necessary.

About unsecured loans

Unsecured loans are easy to get, and serves different purposes like weddings or buying anything expensive like furniture or an electronic device. For this reason, unsecured personal loans are considered much riskier than the secured loans. When the bank gives this kind of loan to someone, they emphasise the borrower’s creditworthiness.

The borrower can fail to give back the money within the stipulated time. In such a situation, the lender can take the defaulter to court. Or get the money through a collection agency.

Different types of unsecured loans

There are different types of unsecured loans. These include-

Personal loans
Credit card loans
Foreigner loans
Payday loans
Instant loans

Unsecured personal loans

You can get four types of unsecured personal loans in Singapore. These include the following-

Personal Instalment Loan
Personal Line of Credit
Balance Transfer
Debt Consolidation Plan

You can get these loans from the banks in Singapore or from Singapore money lenders.

Details of the unsecured personal loans-

Thus, the loans mentioned above can help you in many ways. Therefore, it is essential to have detailed knowledge about each of these loans.

Personal Instalment Loan- In this type of loan, you can borrow a significant amount of money from the bank or any money lender. People frequently take this type of loan from the banks and money lenders in Singapore.

Time- If you take this kind of loan, you can repay the loan in fixed instalments for up to 60 months.

Fees- It has a one-time processing fee which is between 0%-10% of the principal amount.

Helps in- This type of loan is ideal for an emergency, like medical needs, education, weddings and others. This loan is also known as a ‘term loan’.

Line of credit- This is the second type of loan that you can get in Singapore. It allows you to have money anytime you want.

Interest- Whenever you withdraw from your account, it charges interest.

Once your loan gets approved, you can withdraw money from the ATM, internet banking or visiting the bank physically.

You can withdraw two times of your monthly income.

Fees- This type of loan has an annual fee between S$60 to S$120. This fee might differ in different banks.

Interest rates- The interest rates of this type of loans are between 18% to 22% per annum. The lender charges interest as long as you borrow the money once you pay to charge interest also stops.

Time- This type of loan does not give you any particular period to repay the loan. You can pay it back whenever you find it convenient.

Balance transfer- Balance transfer is also called Fund Transfer. This type of loan uses the credits on your credit card. This type of loan is between S$500 and can go up to ten times your monthly salary.

Fees- You pay a one-time processing fee and can enjoy a 0% rate for 3 to 12 months.

Interest rates- In the end, you can clear all your outstanding, or you are charged interest rates between 18% to 29%.

Time- The period of the loan is between 6 to 12 months.

Helps in- These types of loans are best suited for situations when you need some emergency needs.

Debt Consolidation Plan- This type of loan is common in Singapore. Every bank gives this loan. It is a scheme approved by the government. It is best suited if you have taken some more additional loans. And you are facing difficulties to repay them. All your unsecured credits are brought in one place and helps to pay back more effortlessly.

Applicable to- This type of loans are appropriate only for credit cards, personal loans and credit lines. Once this loan gets approved, the new bank will take up all your previous, pending loans in other banks. All other accounts of yours will get either closed or suspended temporarily. After which, you only pay the loans to the new bank until you clear them.

Fees- There are only one-time processing fees.

Time- The time of this type of loan is between one to ten years. And you can pay the loan once a month.

Interest rates- The interest rates are between 3.18% to 12% per annum.

Helps in- This type of loan is helpful when your debts exceed 12 times your monthly income.

These are some of the unsecured personal loans that anyone can get from the banks and licensed money lenders in Singapore.

Conclusion

These loans can help you a lot in times of your emergency. If you have any such situations, you can effortlessly get monetary help through these loans and solve your problems. Since there are different types of loans available, you can get confused. It is always better to get an idea about the different kinds of loans before taking them. This article can be helpful to know about the basic things related to various loans.