Best Unsecured Personal Loan Rates – A handy guide to the four types of personal loans comparing interest rates, one-time processing fees, loan terms and when you should apply for each. 1) Personal Installment Loan The first is a regular personal installment loan. Different banks have different names, but the principle is the same: You borrow a specific amount, pay a one-time processing fee (banks usually waive this), and repay that amount monthly for 60 months. Agrees to pay as per fixed instalment. How it works: A personal installment loan allows you to take out a loan and repay them in equal monthly instalments. Interest and fees are charged for the entire loan tenure and added to the total loan amount. Fees: A one-time processing fee ranges from $0 to 3%. Interest rates vary from bank to bank and start from 3% (actual interest rate 6.96%) and above. Banks sometimes waive processing fees and offer special interest rates during promotional periods. Loan Amount: Installment loans are based on the credit line available in your personal loan or credit line account. Usually, the maximum amount is 4 times your monthly salary. This can add up to 10 times your monthly salary if your annual income is over $120,000 and you have a good credit history. Loan Tenure: The repayment tenure usually ranges from 12 to 60 months. When you should use it: A personal installment loan is useful when you need a large sum of money to cover a big ticket cost that will take you longer to pay off. Example: Your investments have gone bad and you are facing total outstanding balance of $40,000. Take a personal installment loan for 24 months and amortize it in equated monthly installments over the life of the term. Compare the best personal installment loan offers available in Singapore today. 2. Line of Credit Another type of personal loan is a line of credit, which is an overdraft facility that charges interest only when you withdraw money from your account. How it works: Once approved, funds can be withdrawn through ATM, cheque, online banking or by visiting a physical bank branch. You are charged interest as soon as you withdraw your money. When you repay the amount, no interest is charged. Fees: A line of credit usually has an annual fee of $60 to $120. The interest rates are usually between 18% and 22%/annum before any promotion.
Loan amount: Banks usually offer twice your monthly salary as a line of credit, but it can go up to 4 or 6 times when you include other credits. Loan Tenure: There is no fixed tenure. You have the facility for as long as you want. You pay interest as you use it and vice versa. When you should use it: A line of credit is useful as a backup cash fund for unexpected expenses. If you need money for an emergency, you can withdraw cash instantly without any approval process. But the trick is to withdraw this money only when absolutely necessary. Example: You are a small business owner and need some extra cash to buy office equipment, supplies, or hire more employees during busy sales periods. When that busy period is over, quickly repay the cash you borrowed from the credit line. Compare the best credit line offers available in Singapore today. 3. Money Transfer or Balance Transfer The third type of personal loan is Money Transfer (FT) or Balance Transfer (BT). This lending facility utilizes the credit available on your credit card. You pay a one-time processing fee and enjoy very low or 0% interest rates for 3 to 12 months. You can then pay the total outstanding amount or you will be charged an interest ranging from 18% to 29%, depending on the credit facility from which the money was withdrawn. How it works: Balance transfer helps you transfer the outstanding balance from one or more credit cards to a low interest or 0% interest account or credit line. It gives you quick cash in case of emergency or need. This is subject to a one-time processing fee for the accepted transfer amount. Fees: For balance transfer offers, banks usually charge a one-time processing fee of 1% to 5% on your sanctioned loan amount. The best balance transfer offers will waive this processing fee. Loan amount: Typical balance transfer loans have a minimum value of S$500, but can go up to 10 times your monthly salary if you are a high earner and have a good credit history. Loan Tenure: A typical repayment tenure is between 6 to 12 months before higher interest rates kick in. When you should use it: Balance transfers are best if you need cash immediately or have a large, short-term payment coming up and want to avoid the higher interest rates on other types of debt vehicles. Typical use cases include outstanding loan payments on multiple credit cards or emergency auto repair or medical bills, investments or business opportunities. Also, be sure to compare the best balance transfer offers on the market, which can completely waive or offset the processing fee through offers or refunds. Example: You have a total outstanding balance of S$30,000 spread across multiple credit cards and you are paying interest between 20-25% per month on each credit card. Use a balance transfer to consolidate all outstanding credit card balances into one and pay this consolidation monthly, while enjoying zero or low interest every month during the loan tenure, giving you breathing room Is. Plan to write off or reduce the total outstanding loan as much as possible at the end of the term. Compare the best balance transfer offers in Singapore available today. 4. Debt Consolidation Plan The fourth type of personal loan is the Debt Consolidation Plan, which is a government-approved plan available with all major banks in Singapore. If you have a lot of unsecured debt — such as lines of credit and credit cards — and you find it difficult to manage all the repayments, implement a debt consolidation plan. It brings all your unsecured open credits under one umbrella, which means easy repayment and loan management. You only have to remember one due date and the interest rate is lower than that of a regular personal loan. How it works: DCP only applies to credit cards, lines of credit, and personal loans. Once approved, the new bank will take over all other loans from other banks. All amounts including fees and charges will be paid. Those accounts will be closed or temporarily suspended. You will have to make monthly payments to the new bank that arranged the DCP till the total amount is paid off in full. You can refinance your DCP with a new bank after 3 months on prior agreement with the DCP of the previous bank.
Best Unsecured Personal Loan Rates
Fees: There will be a one time processing fee. Depending on the bank and the promotional rate, the effective interest rate is usually between 6.7% and 12%/annum. Loan Amount: The loan amount will be the sum total of your credit card balance, credit line and personal loan. And before applying for DCP you should have an outstanding loan of at least 12 times your monthly salary. Loan Tenure: Loan tenure from 1 to 10 years. When should you use it: If you’re having trouble paying off a loan and have a substantial amount of debt, a rough guide is 12 times your monthly salary. Heavy debt has to be repaid. Not only will this lower your interest rates, but it will also force you to follow a disciplined repayment plan. Since your other facilities are closed or suspended until you pay off the loan in full, your chances of accumulating additional debt are slim. Example: You owe $100,000. Signing up for a debt consolidation plan closes all other credit facilities, allowing you to focus solely on paying off this loan every month for a retention period of up to 10 years. Compare today’s most attractive debt consolidation offers in Singapore only here. Things you need to know before taking a loan 1. Prepare a repayment plan People often believe that personal loans are bad. The truth is that not everything is negative. Debt has a functional and sometimes beneficial purpose. For example, imagine that your money is stuck in stocks. Selling it at the current price means losing money. So borrow, pay interest and get paid back when the share price goes up. If the return on the stock is higher than the return you paid, you still make a net profit. The real problem with personal loans is that many people do not have a proper repayment plan in place. the usual game plan is to borrow money
Personal Loan In Singapore
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