Look for the appropriate type of loan when borrowing money, based on the urgency of your need for the money. Here are different types of loans offered in Singapore that you can consider.
This is an unsecured personal loan that can be sought for practically anything. There are two types of personal loan: term loan and personal line of credit or revolving loan. Term loan comes with a fixed period of time and fixed monthly installment payments. You are required to pay back the money by the end of the loan period. Personal line of credit or revolving loan gives you a credit limit that you can use anytime, and a minimum monthly payment of 2.5% or SGD 50, whichever is higher.
Personal line of credit allows repeated use of your credit once you pay back the amount indebted. In Singapore, to qualify for a personal loan, you must attain an annual income of more than SG$20.000. If you are a foreigner and wish to apply for an unsecured foreigner loan in Singapore, you must attain an annual income of more than SG$40,000.
Some people in Singapore prefer to take personal loans to cover their business expenses instead of applying for a Singapore business loan. Most banks will insist that you sign a personal guarantee for your business loan anyway.
A car loan is sought for purchase of either a brand new vehicle or a pre-owned vehicle. For vehicles costing less than SG$20,000, you are given 60% of the buying price maximum as the car loan amount. For vehicles worth above SG$20,000, you are given 50 percent of the purchase price as the car loan amount. The tenure for car loans is capped five years maximum.
For many people, a home represents the most expensive ownership of a lifetime. So, a home loan can be seen as the most premium loan. A home loan allows you to borrow money so as to build or own a home or residence. Properties eligible for home loans include private properties, HDB flats etc. repayment plan for home loans depend on the loan principal amount, interest rate, and loan tenor.
Determine how much you can afford on the house before embarking on the home loan application process. Others things to keep in mind is how much you are eligible to borrow and how much you need to borrow. If you qualify for a large principal loan amount, see to it if you are capable of repaying before embarking on the home loan application process.
An education loan can be sought for payment of tuition fees, fulfillment of daily living expenses in learning institutions, buying of books, etc. Compared to a personal loan, education loan offers more flexible repayment method and lower interest rate. Even while studying you can make monthly repayments on both the main loan amount and the interest, make repayments only on the interest, or not pay until after you have graduated.
Renovation loan is sought for remodeling or repair of property. Basically, the loan amount is between SG$10,000 and SG$30,000. The overall time for repayment can between one and five years. Interest rates depend on the loan provider and can range from 3 percent to 6 percent per annum. Some banks accompany renovation loan with free insurance security and other related loans such as furnishing loans.