You probably know that
personal loans are available with unsecured payments. In addition to that,
there are some personal loan types are available with
secured and fixed payments. In Singapore, money lending companies are offering
a personal loan with secured and variable rates.
This is because of the
economic growth of Singapore. So you have to choose the best money lending company
for offering personal loan Singapore. If you want to know
about the types of personal loans then you are on the right page. In this
article, you will get to know about the types of personal loans. So make a halt
on this page and look at the following content.
Unsecured personal
loan
As the name indicates,
it is an unsecured loan which is nothing but the collateral properties are not
involved in this type of personal loan. It is free from collateral properties
like a car, home or jewelry but makes the money lenders in the risky condition.
This is because, if the loan applicant is not repaying the loan amount, then
the moneylender will get blamed. Due to this risky condition, the unsecured plans
are usually available with higher interest rates. The loan approval and the
rate of interest will be depending upon the credit score of the loan applicant.
The general interest rate will be available from 5percent to 36 percent and the
time duration for repaying the loan amount will be around 1 to 7 years.
Secured personal loans
The secured personal
loans are self-explanatory; here the collateral properties come into the
picture. These collateral properties will be seized by the moneylenders if you have
failed to repay the loan amount. The two commonly used secured personal loans
are car loans and home loans. In the car loan, if the loan applicant is failed
to repay the loan amount, then the moneylender will have enough rights to seize
the car. This case is similar in the home loan also. The loan interest rate
will be typically lower than the unsecured personal loans and these loans have
fewer risks in the moneylender's sight.
Fixed-rate loan
This is the next type
of personal loan that you can avail of from moneylenders and financial
intuitions. In the fixed-rate loans, your interest rate and the monthly
payments will remain the same for the entire duration of the loan period.
This
fixed-rate loans types are also called as EMI or installments. If you want to
go for the consistent payments, then you can make use of the fixed-rate
personal loans. If you use a fixed rate personal loan, then you can able to
maintain the budget and you need not worry about the payments changing. If you
are a salaried individual, then it is recommended to go with the fixed-rate
personal loans to avoid any financial lagging.
Variable-rate loans
These types of loans
are contradicting to fixed-rate loans. In this type of personal loan, the money
lending companies make the benchmark for the interest rate. Easy
credit SG is one such money lending company that is offering lower
fixed rates for the benefits of people. The interest rate is mainly varied
based on the benchmark fluctuation. In this type of personal loan, you cannot
predict the monthly payments and total interest costs. The variable rate loan
is mainly suitable for the short repayment period.
Debt consolidation
loans
For managing the
several debts loans, these debt consolidation personal loans are used. This
loan can able to roll all the multiple debts into a single payment. This has
low APR than the rates of the already availed loans and able to save on
interest rates. The loan applicant can combine all debts into a single monthly
payment.
Co-sign personal loans
This personal loan
type is most suitable for the loan applicant who has a poor credit score and
thin or no credit history. The co-signer will make the promise to the
moneylender, that if the loan applicant is not able to repay the loan amount,
then the co-signer will repay the loan.
Here the co-signer acts as a form of
insurance for the moneylender. If the co-signer is available with high credit
history, then the chance for getting the loan approval is high. The interest
rate for the co-signed personal loans is low.
Payday loan
The payday loan is one
type of unsecured personal loan. Here the repayment of loan amount should be
done in the next day itself. The loan amount will be small but having a higher
interest rate.
The Bottom lines
By now you can get a
clear idea about the types of personal loans that are offered by the
moneylenders and financial intuitions. You have to choose the loan type that
should meet your needs and financial requirements.
