Getting all sorts of loans can be an intimidating process, especially if you don’t know what to expect. There are so many kinds of loans that are available on the market, and they all have their pros and cons.
In this informative article, we will look at the different types of loans that exist in Singapore today: personal loans, home equity loans or cash-out refinancing mortgages, business-related loans granted by banks and any licensed moneylender Singapore such as QV Credit. This post will also guide you through the process of how you can apply for these various types of loan products!
Types of Loans
The loan product that you choose will depend on your loan needs, the loan term and the loan type. To know what kind of loan you should be applying for, here’s a list of the different types of loans:
An unsecured loan is a form of loan that is not backed by an asset such as a car or property. The borrower does not need to provide collateral for the loan in order to get approved, and this loan is typically granted at higher interest rates than secured loans, which have collateral backing them up.
This type of loan can be either a secured or unsecured loan with a high number of approvals granted for all kinds of businesses, from start-ups to established companies, but only limited lenders are available. The most common commercial loans that people take up include business start-up loans and short term trade financing needs.
A secured loan is one that has an underlying asset helping to support it, such as possessing a car or home you use as your primary residence. You start out with lower borrowing costs, but if you default on the payments, then lenders will also take back their collateral – so make sure everything’s paid off before renewing!
A personal loan is money given by a financial institution to an individual without collateral (such as land titles) required against it. This form of personal loan can be used for any purpose but typically includes funds needed for transactions involving credit cards, education fees, home improvement projects or medical emergencies.
Another loan type is an urgent loan, which can be a secured or unsecured loan and typically includes emergency funds for individuals with no other way to access cash.
Home Equity Line of Credit (HELOC)
HELOC is a loan that’s secured by the borrower’s home and is an open line of credit for financing investments, such as a vacation or an emergency expense. This loan also comes with low-interest rates but can be risky due to its high potential debt.
A business loan may be granted from banks in Singapore or licensed moneylenders (QV Credit) if you are looking for funding to start your own company or expand your current one. You’ll need collateral like property titles, accounts receivables, equipment purchase contracts etc., so keep this in mind when applying!
Government loans or loans from private financial institutions may be available to people who need money to finance their studies. In most cases, private student loans are not granted until after acceptance into your desired course, and they can only be used for education-related expenses such as tuition, and living costs, among other expenses.
Applying For A Loan
Now that we’ve explored all these different types of loans available on the market today, let’s now learn how you actually go about applying!
The first step would typically involve filling up an online loan application form with information like employment status, monthly income (plus other sources), property ownership details and credit history if applicable. The next step is to submit this online by either faxing or mailing over physical copies, depending on which loan provider you’re applying to.
Once loan providers receive your application form, they’ll usually be in contact with you within the next 24 hours to discuss loan terms and conditions as well as how it will work out for both sides!
Is it important to have a good credit score?
The importance of credit ratings varies between loan types. For unsecured loans, it’s not necessary to have a good credit score, and high-interest rates are applied if you do, but for secured loans, your loan will depend on the value of what you’re securing with them – so make sure everything is paid off first before applying again!
So now that we’ve finished up this article about different loan types in Singapore, be sure to take note of which type suits your needs best when going out there into the market! These days more people are opting for fixed-rate personal or commercial loans because they come at lower monthly repayments as well as provide security but don’t forget to keep borrowing costs in mind too.