In our present day and age, one cannot survive without having a sufficient amount of money and there may be times when you are in urgent need of funds, but do not have the necessary amount in your account. In such a situation, opting for a personal loan is the best solution.
Personal loans are unsecured loans that can be of great help when you are in need of money. Many banks and financial institutions in Singapore provide this type of loan. DBS bank, HSBC bank, POSB bank, Bank of China and Standard Chartered Bank are some of them. As you do not have to provide any collateral to acquire a personal loan, banks give you this loan based on your credit score. If you have a good credit score, you will be able to avail this loan easily with a low rate of interest.
An advantage of this loan is that the amount you borrow can be used for absolutely any purpose. There are various reasons for taking this loan and it differs from person to person.
A few reasons for which people take this loan are as follows –
- Fixed tenure – Most personal loans have a fixed repayment period and one has to repay the amount within that time frame. How long this time frame will be depends on the bank and the person taking it. It can be 1, 2, 5 or 7 years long. A person can choose to repay the money before the fixed time but he or she might have to pay a prepayment fee in that case.
- No collateral required – As mentioned above, when you take a personal loan, you do not have to provide any collateral security, which is usually common with other loans. If you provide collateral security, your lender can take ownership of it in case you fail to pay back the money you borrowed on time.
- Debt Consolidation – When you take a loan to pay off all your other debts, it is called debt consolidation. A lot of people choose to take a personal loan for this reason. Taking a personal loan is beneficial in this case as it can lead to lower monthly payments and rates of interest, thereby helping you save a lot of money.
- For travelling – You can choose to opt for a personal loan when you wish to go on an expensive overseas trip with your family
- For renewing the Certificate of Entitlement (COE) – In Singapore, every car owner needs to have a COE, for which the price of obtaining is very high. Sometimes the cost of this certificate is higher than the car itself and one cannot take a car loan for renewing their COE. Taking a personal loan instead has proved to be a good solution for a lot of people in this case.
- For purchasing something expensive – Sometimes you might want to buy certain luxurious items like a wedding ring or jewellery, which costs a lot of money and for which you can’t pay using your credit card. A personal loan can be of a great help in such a situation as you can get the money easily without having to return it immediately.
These are some among the many reasons for which people opt for personal loans. Getting a personal loan is not difficult, but one should conduct detailed research before applying for it. Comparing the offers of different banks is a smart thing to do, as it will help you in choosing one with maximum benefits. Once you get the loan, remember to pay it back on time, along with interest.
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