4 types of loans in Singapore and how to use them wisely

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4 types of loans in Singapore and how to use them wisely

Banks and financial institutions in Singapore offer different types of loans to suite different financial needs. The interest rates, terms, tenure and loan amount vary accordingly. As a borrower, you should choose to apply for the right type of loan from the right lender. To that end, you should first identify your priorities and requirements. For instance, if you need a loan quickly, borrowing from a licensed moneylender would be a good idea. A home loan is ideal for those planning to use the loan amount for building or renovating their house. If you need money to buy a car, consider taking a car loan. There are many other types of loans, with each of them having their own pros and cons. Read this to know about four types of loans in Singapore.

Payday loan

If you are a salaried person, you have a limited income. No matter how much you earn, your salary is never too big to give you enough space for sudden, unwanted expenses. They come unnoticed almost every few months. Your car could breakdown or you may face to a medical emergency in the middle of a month. Dealing with small cash requirements is easy now, thanks to payday loans. You can borrow a portion of your net salary from a moneylender in a matter of few hours. All you need is to show your income proof to the lender. The interest rate is a little high, but the ease and convenience it provides are worth the price. Use your payday loan amount to deal with your short-term cash requirements, but know that you have to repay the amount on your next payday.

Business loan

As the term suggests, this type of loan is meant for business persons. Whether you want to start a new company or expand your existing business, consider applying for a business loan. Once you receive the loan amount, invest it in your business only. You can buy new equipment, revamp your product inventory, or set up a new firm. Get quotes from 2-3 lenders and compare them before making a final decision.

Personal loan

In this case, you have more flexibility in terms of how you want to use the loan amount. You can use it for buying a car, paying medical bills, or going on a tour. The interest rate for a personal loan is higher than that of most other loans. So it is even more important to use the money wisely. Take up a personal loan for your needs, and not for your wants.

Foreigner loan

For foreigners living in Singapore, arranging quick money could be difficult. Thankfully, some licensed moneylenders in Singapore offer foreigner loan to help them survive financial emergencies. You need a valid employment pass to be able to get this loan. The interest rate is low as compared to a personal loan, and you can get an approval faster.

Choosing the right type of loan for your requirements is important. Also, make sure you get the loan from a reputable lender in Singapore.