5 Main Types of Unsecured Loans in Singapore (2020 Update)
Due to the high appetite for loans in Singapore, financial institutions have come up with innovative products to fulfill growing demand. These loans are customized to meet your unique financial needs and to guarantee easy repayments. Here are some of the unsecured loan options to consider:
Types of Unsecured Loans in Singapore
Personal Loans: These are offered to meet financial obligations, such as educational fees, home renovations, car purchase, and medical emergencies among others. They are available to salaried employees and foreigners in Singapore.
Credit Card Loans: If you own a credit card, you already have an unsecured loan with our credit card company. This is the most common unsecured loan in the country.
Foreigner Loans: With millions of expats living in the country, this unsecured loan comes in handy for expats facing financial shortfalls.
Pay-day Loans: These are short-term credit facilities issued in the mid of the month to salaried individuals. They are packaged to be rapid with the next paycheck.
Instant Loans: These are online credit facilities that are processed within minutes and they are intended for small financial needs.
Important Note for Borrowers:
But beware of borrowing from a loan shark, therefore do check their background and company address that they exist for real before sending in your personal details. Here is a Straits Times investigation on how easy you might fall into an unlicensed moneylender’s trap.
A Brief Summary of Unsecured Loans in Singapore in 2019
Over the last two years, the economic situation in Singapore has not been very promising. With tougher economic terms, household owners are forced to seek financing for their financial needs and emergencies. Financial institutions in the country provide different types of loans to consumers based on specific needs. Unsecured loans are the most popular in the country for many good reasons.
What are the Basics of an Unsecured Loan?
This is a type of a loan product where no collateral is required to qualify you for funding. Your creditworthiness is used as security and also determines the amount you can access. This type of loan is offered mostly to people with a regular income and deductions are made directly for the salary.
While traditional lenders such as the banks require high credit rating to issue these loans, Ministry of Law (MinLaw) also provides licenses to moneylenders in the country to provide such loans as well to help a bigger public.
An unsecured loan has a higher risk to the lender, and this leads to higher interest rates. The unsecured loans landscape has changed over the years with the tighter rules governing bank loans. This comes amidst findings showing that Singapore has one of the highest debt levels in the region. Before taking a loan, it is important to talk to your financier about the new rules and how they are going to affect the loan terms.
Eligibility requirements include a NRIC card or valid work permit for foreigners, proof of residence, documents to support proof of income including pay slips and CPF statements.
Don’t try your luck in looking for a loan on your own. Speak to a sound financial advisor today to get solid financial advice before choosing a loan product.
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