We all occasionally go through periods when our finances are not at their best. From temporary issues caused by unforeseen expenses to serious setbacks that affect our productivity and the well-being of our family, financial problems can impact anyone and are one of the main reasons why Singaporean citizens are increasingly turning to loans. Do you need a cash infusion to invest in new appliances? Do you require a medical intervention at a private clinic? If so, a personal unsecured loan may be the only way to get the funding you desire.
Going for an online loan in Singapore is an option adopted by many citizens in our country. And it’s not always a bad thing. Compared to other nations, private financial institutions in SG are well-regulated and are limited in the actions they can take against borrowers. Do you need a loan of 10000 SGD that you will repay in half a year? In this case, the interest charged by the lender cannot exceed 4% per month. The rights of borrowers are respected in our country, and for this reason, satisfaction in our financial institutions is one of the highest in Asia.
Why a personal unsecured loan? Flexibility. Unlike payday loans, which generally must be repaid at the next paycheck, personal unsecured loans are flexible in the way they can be reimbursed and utilized. Plus, their interest rate is lower. In the case of a payday loan, you are likely to pay an interest rate of 4% per month; however, for a personal loan, the asked MPR usually hovers around 2.8%. Personal unsecured loans are financially attractive, can be easily refinanced to extend the repayment term, and are a solution increasingly used by SG citizens.
A Common Occurrence
Singapore is a country with a top-notch education sector, a globally recognized transportation network, and a healthcare system that rivals that of the wealthiest nations on the planet. But at the same time, the average monthly income for a Singaporean household is only 10,000 SGD, which is not much when you consider that rent for a three-bedroom apartment in a central part of the city is close to 7500 SGD. Have you run out of money at the end of the month, and your family expenses pile up? Do you need extra cash? Then, like many citizens, you probably consider taking out an online loan in Singapore.
An unsecured personal loan may be an option to consider, as its interest rate will be lower than a payday loan, and you will have flexible repayment options that match your economic possibilities. How much can you borrow? This will depend on your finances and on the policy of the lender you contact. Although, as of 1 June 2019, the MAS has limited the maximum amount that can be borrowed through unsecured loans to twelve monthly salaries, the majority of lenders will offer you a loan worth between three and six times your monthly income.
Amounts may vary depending on your credit history and the purpose of the loan. However, as a general rule, if your household has a monthly income of 10,000 SGD, then the maximum amount you could receive is 60,000 SGD. For secured loans, the amount you can get will be higher and will depend on the collateral you are pledging. Moreover, the interest rate of the loan will depend on your debt-to-income ratio and whether you have been listed as a bad debtor in the past.
What Are the Criteria for Obtaining an Unsecured Online Loan?
In SG, the minimum criteria for borrowing from private institutions and domestic banks are dictated by the MAS. What do you need to fulfill for a personal unsecured loan? First of all, you must be a Singaporean citizen or permanent resident and be 21 years of age. Secondly, you must show proof that you have a stable income, and if you have not been employed at your present job for more than one year, you must present copies of your outstanding credit history.
The minimum income you must have to qualify for a personal loan is 20,000 SGD, or 40,000 SGD if you are a foreign national. In addition, although it is not mandatory, not having outstanding debt to other creditors can significantly increase the chances that your application will be accepted. Once the initial paperwork is sent and the documentation is reviewed, the response to your application, either positive or negative, should come within 48 hours, although exceptions can be made.
The Government Protects You
Did you get approved for an unsecured loan? In that case, you need to read carefully the regulations of the loan you are interested in. Under the Moneylenders Act of 2009, creditors in SG must be transparent with their provisions and lay out the terms of the loan in easy-to-understand terms. However, you still need to read carefully what you sign. The loan tenure should be for a duration that suits your needs, and the processing fee asked by the lender should not exceed more than 3-4% of the loan amount.
In SG, moneylenders are limited in the actions they can take against you, and the maximum charge per missed payment is 60 SGD per month. Moreover, creditors in our country are not allowed to charge a credit processing fee higher than 10% of the value of the amount borrowed. Do you think your rights have been violated? Then, you can contact CASE or CSS. Our country, although it has a high cost of living, is well-regulated financially, and the rights of borrowers are strictly respected and enforced.
What Are Some Common Uses for an Unsecured Online Loan?
The advantage of personal unsecured loans is they can be used for a wide variety of purposes, from unforeseen medical expenses to paying school fees. Do you want to purchase new home appliances, fund a private event such as a wedding, invest in your education, or open up an emergency fund for unplanned expenses? In that case, a personal unsecured loan can be a great option. Likewise, a personal loan can be used for business purposes, traveling, or to consolidate your already-owned debt.
As the name says, a personal loan can be used for any personal expense you require. Moreover, the flexibility of these types of loans, the favorable interest rates, and the flexible repayment periods make them widely used monetary solutions. According to a survey conducted by Finder Singapore in 2020, one in three residents of SG took out a personal unsecured loan in the last twelve months. Granted, because of COVID, these numbers can be partially inflated, but there is no denying how these types of financial packages have become commonplace in our society.
