Easy Access to Loans and Debts in Singapore

A loan is a sum borrowed from a firm or any individual and is supposed to pay back with interest in a given time. Debt is the amount that you go to somebody- an individual or a company.

When to take a loan?

To live in an ideal world, it is essential to have money as it is vital for fulfilling the needs. In this case, one can take a loan from banks and NBFCs to meet their goals and needs.

Things to remember while taking loans:

  • Do not borrow any amount that you cannot repay.
  • It is preferable to keep the tenure as short as possible.
  • One must ensure that the repayment is regular and on time.
  • It is safe to take insurance for big loans.
  • Check the rates of interest before applying for any loan and go for the one which has cheaper interests.

Types of loans:

  • Debt consolidation loans
  • Student loans
  • Mortgages
  • Auto loans
  • Personal loans
  • Loans for veterans
  • Small business loans
  • Payday loans
  • Borrowing from retirement and life insurance
  • Borrowing from friends and families
  • Cash advances
  • Home equity loans

Debt Consolidation:

Debt consolidation is the financial process in which one can merge multiple debts or bills into a single one and pay it off through a loan. It’s is also known as “bill consolidation” or “credit consideration.”

When to consolidate debt?

Consolidating debt is a good idea when one is ready to change financial life. If the rise in bills or credit card balances of every month bothers you, then debt consolidation is something that one should always consider. In short, it simplifies the payment of bills.

When not to consolidate debt?

The first and the foremost step while consolidating debt, is to stop using credit cards for a while. In case you cannot change your habit of using credit cards for payments, then debt consolidation is not for you. This is because if you do not stop using the cards, then the struggle to cope up with the bills will never come to an end.

Banks for a personal loan in Singapore:

Here is the list of some banks and NBFCs from where you can apply personal loans in Singapore:

  • HSBC Personal loan
  • Standard Chartered Cash One Personal loan
  • DBS Personal loan
  • POSB Personal loan
  • CIBM Cash Lite Personal Instalment loan
  • Citibank Quick Cash loan
  • OCBC Personal loan

How to apply for a personal loan in Singapore?

To apply for personal loans in Singapore, there are specific eligibility criteria that are to follow-

  • You must be a citizen of Singapore or a permanent resident there.
  • Your age should be between 21 to 60 years old.
  • Your annual income should match the amount mentioned as the firm’s criteria from which you are planning to take the loan.

Banks that provide debt consolidation in Singapore:

There are several banks and financial institutions that offer debt consolidation loans Singapore. Some of them are-

  • American Express International, Inc.
  • Bank of China Limited Singapore.
  • CIMB Bank
  • Citibank Singapore Limited.
  • DBS Bank Ltd.

There are many more financial institutions that offer debt consolidation loans in Singapore.

What are the criteria?

To get debt consolidation loans in Singapore, one must be a citizen of Singapore or a permanent resident there. The annual income should be between S $ 20,000 and below S $ 120,000; one must have interest-bearing unsecured debt on all the credit cards he possesses. There should also be a provision for unsecured credit facilities with Singapore financial institutions. The unsecured credit should be twelve times as large as the monthly income.

Documents required for application of debt consolidation loan in Singapore:

To apply for a debt consolidation loan in Singapore, one must have the following documents:

  • Copy of NRIC both front and back
  • Credit Bureau Report of the recent time
  • Recent income documents
  • Report of credit cards or any unsecured loans statements
  • A confirmation letter that evidences the clearance of all bills of the credit cards (if any)

Best bank for a personal loan in Singapore:

UOB Personal Loan and HSBC Personal loans are the two banks that offer a personal loan in Singapore at a cheaper interest rate- 3.68% p.a. and 3.7% p.a respectively. The annual interest rates of these to banks are comparatively lower than others, making them ideal for taking personal loans.

Best bank for a debt consolidation loan in Singapore:

HSBC and CIMB are the two banks that provide debt consolidation in Singapore at lower rates with 4% p.a. and 2.77% p. respectively and the processing fee on CIMB is just 1%. It makes a great deal for people who want to clear all debts and want to have a change in their financial life.

What happens when you fail to repay the loan in Singapore?

There are four significant consequences of not repaying the loans in Singapore which include-

  • Employment Difficulties– If one does not repay the loan, it is reflected in their credit report. There are individual companies that carefully check the credit reports before employing any person for any job. If your credit report reflects the failure to pay any loan, one might face difficulty getting jobs.
  • Money Getting Seized From Accounts– If one has a certain amount in the account of the lending bank, then the money can be legally taken by the bank. However, this depends on the bank and its terms and conditions.
  • Legal Actions– Since, according to the contract signed during the loan proceedings; one is bound to pay back the amount with interest. If one fails to pay back the amount, the bank can take any legal action against this.
  • No Loans For Crucial Times– Feeling to repay the loans lowers the credit score, and once the credit score is low, it becomes difficult for someone to apply for any essential loan like a personal loan or educational loan.

Taking loans is never a bad idea; it is reasonable and practical to take loans to complete your aims, goals, or needs. However, it is crucial to choose the appropriate financial institution before taking any loan, and the repayment of it on time is also very necessary. I hope this helps you in gaining knowledge about loans and debts in Singapore.