People can apply for personal loans for various reasons. This loan is also added to the credit file of the borrower. People should apply in such a way those lenders like LenderSg will trust that the borrower is responsible and he will pay back the loan on time. People can go for different types of personal loans as per their requirements. Let us discuss these types.
Types of personal loans
There are various types of personal loans, which are discussed here.
Secured personal loan
People can take this loan to purchase a car, a house or make an investment in purchasing any big asset. The Money Lender needs collateral to give the loan. If the borrower is unable to pay back the loan, the lender can take away the collateral. The interest rate for the secured personal loan is low. Such a loan is less risky for the lender.
Unsecured personal loan
In this type of loan, a borrower does not need to give a guarantee and the loan amount can be used for any emergency or for purchasing or renovating a house or any other thing. One such unsecured personal loan is a car loan, which people can take to purchase a car. This type of loan can also be termed as a secure loan as the car acts as a guarantee. The loan has to be taken to purchase only new cars as it acts as a security for the lender.
If people need a small amount of money, they can go for a payday loan. The loan can be paid within 16 to 60 days
The application process of personal loans
Here is the process of applying for a personal loan.
- The applicant has to decide the type of loan, which will fulfill his/her requirements.
- Personal loans provided by different money lenders like LenderSg should be compared and then a lender has to be chosen to avail the loan.
- Fill the application form provided by the lender on his website.
The processing time of the application varies from one lender to another. Some applications can be approved within minutes while some take days or even weeks. The lender will inform the borrower about the approval or rejection of the application. If the application is approved, the lender will give the information about the amount that he can pay.
Eligibility for getting a personal loan
Eligibility criteria for a personal loan depend upon the type of personal loan that an applicant has applied. In some cases, the criteria are strict while in others it is not. Let us see the criteria for each loan.
Criteria for secured personal loans and car loans
In such a case, the age of the borrower should be at least 21 years. The credit rating of the borrower should be good in case, he has chosen a big bank for the loan. Another criterion is that the borrower should be a permanent citizen of the country. The lender may also ask for the minimum income to approve the loan application.
The eligibility is also required for the asset that the borrower will use as a guarantee. It can be a house, car, or any other asset. In the case of a car loan, the car is taken as a guarantee. The car can be either brand new but if the borrower is planning to purchase a used car; its age should not be more than five years. Eligibility id required for other assets that are being used as a guarantee like a house or a boat, etc.
Criteria for an unsecured personal loan
The risk for the lenders is more in these types of loans so eligibility criteria are strict in comparison to the secured loans. The person must be of 21 years or more and he should be a permanent citizen of the country. The credit rating of the borrower should be excellent. This rating shows whether the borrower pays the loan on time. Personal finance of the borrower is also checked and the loan amount is decided on this basis.
Criteria for a payday loan
This loan is approved at a fast pace and the eligibility criteria of this loan are very flexible. The age of the borrower should be 21 years and he should be a permanent citizen of Singapore. The lender focuses on the ability of the borrower whether he/she will be able to pay back the loan or not.
How to choose the personal loan
People need to think about the purpose for which they have to take the loan. The loan will always be recorded in the credit file of the borrower. People need to choose the right type of loan so that they can pay it back easily.
These are some of the things, which people need to consider before applying for a personal loan. The loan is of many types and people need to choose such a loan that will fulfill their requirement and also easy to be paid back.