There are many different types of loans and different schemes that are tagged to each loan type. This may confuse borrowers who are seeking out the best loan type on their loan. Today, we discuss about how to get low interest on your personal loans.
Personal Loans Demystified
A personal loan may very well be the best loan type when emergency cash is needed. The fast service and fast cash advances provided by money lenders allows you to put your mind at ease.
Repayments are worked out mainly based on your salary and some other factors. Hence its still possible to get low interest on your personal loans.
As personal loans are mostly unsecured, borrowers in Singapore will not be required to put up any form of collateral or mortgages to take up a loan.
Low Interest Loan Factors and Eligibility
As mentioned, the major factor in determining loan eligibility largely lies in the borrowers’ source of income and income level.
The higher a borrower earns, the higher the loan amount that a borrower is able to get. This main factor determines the increased chances of loan approval with low interest rates and is common in both banks and money lending institutions.
A common practise is that most banks and money lenders will allow borrowers to lend up to four times 4x of the borrower’s monthly salary. Further which, if a borrower is able to show that they are able to repay loans on time, the personal loan contract could be better.
When a Loan Offer is too Irresistible
The revision of the Moneylender Act in 2010 has led to money lending firms to start in neighbourhood and suburbs. They offer a variety of loan services.
However, it’s noted that the rulings and the increased number of money lenders with bad practises and many new unlicensed moneylenders who sometimes claim that they are licensed. These errant lenders target on borrowers who needed cash urgently hence landing themselves in bad loan debts.
More often than not, errant lenders will offer extremely low interest rates but implement fees or give difficult repayment terms that the borrower can’t match up.
Make Loan Comparison Before Borrowing
Always compare. That’s the simple rule of a consumer. There are varying personal loan interest rates from different financial institutions hence compare and choose amongst those with low interest rates.
Find out their loan offerings and as a borrower, best in mind your debt servicing ratio. This is the total amount of debt (monthly repayments to all your bills) in comparison to your total income.
This calculation technique allows you to check whether you are able to incur more debt and whether you are able to meet your monthly repayments on your personal loan.
Most importantly, check that your debt servicing ratio does not exceed 50% of your total income. Otherwise, banks and lender might not allow you to take up the loans or offer you a higher interest rate instead.
Get the Right Money Lender for Low Interest Rate Loan
Once you have fully considered your debt amount and the monthly repayments you can manage with, plus your outstanding debts owing each month, then you can finalize your decision on getting the right licensed money lender.
Get the money lender that offers the best low interest rate on your personal loan in Singapore.
Ensure that the lender is reliable and honest with you. The loan officer will well advice on your loan amount, interest rates and repayment amount and schedule.
Ensuring that the money lender company is trustable and licensed is very important. Most licensed lenders will work out the repayment package to best suit your current needs.
Go to a money lender with good reviews and rose your time to compare the loan interest rates between companies.
As a borrower, ensure that you meet the repayments on time!
Use our online loan application form too and our friendly loan officer will best advise you on your loan.