Many people face cash flow problems from time to time, and this may result in challenges in paying off certain bills or expenses, especially when there is a deadline to do so. In those situations, a personal loan might be able to help you ease your financial burden.
Personal loans can be secured or unsecured loans. When you receive a personal loan, the cash is directly deposited into your bank account, and it can be used to pay for large personal expenses such as funerals, weddings, renovations or travel.
Some of you might be wondering, is it possible to get a low interest rate personal loan in Singapore? Where can you find them and how can you make use of them? Let’s take a closer look.
There are two places where you can find the lowest interest rate personal loan in Singapore – banks and licensed money lenders.
Banks like HSBC, DBS, OCBC, UOB, etc, offer personal loans with interest rates from as low as 3.4% per annum. Some banks might even offer 0% interest rates – and you might be wondering, is this really too good to be true?
There’s no free lunch in the world, so yes, 0% interest rate personal loans often come with a catch – they often involve high fees, such as processing fees and other charges, so their effective interest rates (EIR), which includes processing and administrative fees, are actually high.
An equally reliable and competitive option is to take a loan from licensed money lenders. You can find them all over Singapore, including Chinatown. Licensed money lenders generally offer personal loans with interest rates of 1-4%, assuming the loan is repaid on time.
Personal loans offered by licensed money lenders are often of a smaller amount as compared to those you can get with banks. This makes money lenders suitable for quick cash needs as the credit requirements are less stringent, thus increasing your chances of getting the loan approved.
The interest rates of licensed money lenders are also fixed, as compared to banks’, which may fluctuate according to the market.
There are many benefits to getting the lowest interest rate personal loan in Singapore from money lenders.
The repayment period is negotiable before you sign the loan contract. This is great if you need more time than traditional banks would allow. So make sure you negotiate for a period that you are comfortable with, as late repayment will incur late interest and charges.
The personal loans you secure with money lenders can be used at your discretion for a wide range of needs.
Licensed money lenders also have a faster approval rate than banks; most loans can be approved in less than a day. This makes licensed money lenders the perfect choice if you need fast cash for urgent matters like funeral expenses or medical emergencies.
Interest rates for loans with licensed money lenders are not flat but reducing. This means that your interest rate is calculated based on the principal amount outstanding at the end of a specific period. For example, if you borrowed $14,000 and have repaid $2,000 of the principal loan amount (not including interest), interest for your next payment will be calculated based on the remaining $12,000.
But remember, the cheapest interest rate is not necessarily always the best. There are other factors to consider such as repayment period and high late interest fees, etc. Always read the loan contract carefully and be aware of all terms before committing to it.
There are many ways to utilize the lowest interest rate personal loans in Singapore.
If you have multiple debts or loans with different lenders, you can consolidate these loans into a single one through a debt consolidation loan. In short, a debt consolidation loan lets you centralize all your different loans into a single one, with a single repayment period and usually at a lower interest rate.
This means the lender you take the debt consolidation loan from will pay off all your other multiple debts, so you only need to repay one loan from a single lender. You no longer need to be stressed about the different deadlines and interest rates.
Building a dream home often requires significant renovation work and sometimes hidden costs which are not cheap. Renovation loans with low interest rates can help you build your ideal nest with minimal disruption to your cash flow.
Weddings are known to be expensive, and personal loans are great tools to finance your dream wedding. With a low interest rate wedding loan, you can plan a glitzy wedding without having to worry about your cash flow. Such a loan can be used for wedding-related expenses from videography to catering services. Do remember to do your wedding budgeting well though – a wedding loan is to help you with your cash flow, but not for you to spend what you might otherwise not be able to afford.
Sometimes, the unfortunate happens, and when we or our loved ones encounter medical emergencies, it can cause a lot of financial stress and cash flow problems. You can take a medical loan to fund medical emergencies that your insurance does not cover, or to tide you through the period while you are waiting for your insurance claims to be approved. Find out what you need to know before taking a medical loan.
Regardless of whether you are studying locally or abroad, it is common to take loans to fund your (or your children’s) higher education. Study loans with low interest rates are good because payment may be deferred until after graduation so you can focus on your studies first.
Ultimately, you can use low interest rate personal loans for a variety of personal expenses, especially when these are large expenses, to ease your cash flow.
At Soon Seng Credit, we offer competitive interest personal loans with flexible repayment periods and fast approval rates, together with friendly and professional services.