A personal loan is a sum of money individuals borrow to address their specific financial expenses. These loans are available from credit unions, traditional financial institutions, and online lenders. They are repaid gradually through interest charges. Individuals can avail of these loans for many reasons, including debt consolidation, financing a wedding ceremony, or funding home repairs. They can also be used to pay for other expenses, such as educational fees and child care.
In Singapore, there are many options when it comes to personal loans. It is important to understand the different types and their requirements to make the best decision for your needs. In addition to the amount, repayment periods and interest rates vary by lender.
There are banks that offer personal loans with low flat rates. However, these banks may have stricter requirements and longer approval times compared to licensed moneylenders.
The Monetary Authority of Singapore (MAS) caps the maximum unsecured debt an individual can take to 12 times their monthly income. This includes credit card debts and lines of credit. If you exceed the cap, the MAS will deny your request for further credit.
Licensed moneylenders in Singapore provide personal loans with lower rates than banks, but they typically have higher rates than credit cards. Some also charge additional fees for late repayments or early redemptions. To avoid these extra charges, it is best to shop around for the best deal. Some lenders offer discounts to existing customers or those who use their services often. personal loan singapore