Do you want to buy a house or car that you always wanted to? Don’t worry! Now you can get a low-interest loan in Singapore quite easily. A lot of people are scared to apply for personal loans. But it is safe and has low-interest rates. It will help you to deal with sudden money problems. You need to work on your annual income in order to find a low-interest loan.
Moreover, the period, as well as the amount, is any bank in Singapore’s criteria for issuing a low-interest loan. However, there are other factors that you can look into to get a low-interest personal loan. But first, let’s understand what is meant by a low-interest personal loan?
What is it about?
A low-interest personal loan is given out usually on a short-term basis. There are several outlets through which you get a personal loan, such as the bank, moneylenders, and credit unions. Any loan that has an interest rate below 12% can be classified as a low-interest loan. You need to pay instalments every month, and this could go on for about 2 – 5 years.
Why do you need personal loans?
Personal loans are used to take care of primary or emergency expenses. You can use a personal loan to:
- Emergency cash
If you need money right away, personal loans are your best option. It is easier to get approved for a personal loan. You just have to fill in an online application form, and you can check your approval status within a few minutes.
- Debt consolidation
Debt Consolidation is an excellent way to get your credit scores up. Personal loans do not have a high-interest rate. Hence, you can take a personal loan and pay off all your debts. As a result, you have only one loan to pay off that has a low-interest rate. Moreover, since you will pay for only one loan, your credit score will automatically go up.
- Vehicle loans
Even though there are automobile loans, you can use low-interest personal loans to buy your vehicle. Not only will it use the vehicle as collateral, but it will also be easier to pay off the debt.
- Moving costs
Although it is not a common reason people look for low-interest personal loans, you can get a personal loan to cover moving costs. If you are moving away to a far away location, you will need the money to cover expenses such as moving your vehicles, purchasing new items for your place, etc.
Things to do to get a low-interest loan
Finding a low-interest loan can be a daunting task. Hence, you need to follow these tips in order to make sure that you can land one easily:
- Improving credit score
This is quite an obvious factor when it comes to scoring a low-interest personal loan. You should work hard to improve your credit score before you apply for your loan. Before working on it, you need to keep track of your score. From illegal account work to pay your bills on time – each and every financial move of yours will determine your future.
- Reducing the debt-income ratio
Another thing you need to work upon is the debt-income ratio. It is measured as your monthly debt divided by your monthly income. The smaller the ratio is, the more chances of securing a loan at a low-interest rate. The goal is to check whether you are able to pay loans on a general basis.
- Look out for offers in a different season
There are several banks that offer personal loans at a much lower interest rate. They tend to send offers during different seasons. You might often find messages in your inbox regarding low-interest personal loans. You must keep an eye out to catch these offers. Make sure that you are not getting involved in any kind of fraud scheme. Do a bit of research before you get in touch with any of the banks.
- Increasing credibility of the employer
Your company influences whether you will get a low-interest personal loan. A good employer increases your chances as it ensures that you get good pay. Good pay will indicate that you will pay back the loan and have a stable job. Hence, you will not run away and not clear your dues.
- Choosing moneylenders
If you are unable to get a loan at a lower interest rate, you can always look for a licensed moneylender. There are several moneylenders in Singapore. According to the law, moneylenders can only charge you a maximum interest rate of 4%. Hence, if you cannot secure a bank’s low-interest loan, you should look for a licensed moneylender. If you are lucky, you might get the loan based on the principal amount and not the original payment.
- Choose the right bank
You should choose a bank with which you have a pre-existing relationship. Choose a bank where you already have an account. It will help you to secure a low-interest personal loan easily than in an unknown bank.
- Apply for a pre-approval
Pre-approval is when you check with the lender before applying for any loan formally. It is an extremely important way of securing a low-interest loan. Moreover, it saves the hard pull that occurs on your credit score.
- Apply at a credit union
Credit unions are non-profit organisations. Hence, you can apply there to get a loan for yourself as, unlike banks, they do not have to earn huge amounts of profits. It is easier to get low-interest rates on loans issued from credit unions.
To Sum It Up
Now that you are aware of the different ways you can get yourself a low-interest loan in Singapore, what are you waiting for? Start looking for places and compare them as soon as possible. Remember to check the conditions of getting each loan thoroughly. Make sure that you do not miss out on any kind of a loophole.