Various types of consumer loans

The term credit indicates a transaction that involves money. Nowadays credit is used by banks or creditors to deferred payment or payment at a later date for receipt of money, goods or services. Credit is given usually given by large banks, creditors or lenders to a borrower. And they use contracts and agreements to fulfil the obligations of lending and receiving. Then a specific sum of money is given to the borrower for education, family, household, personal, car vehicle and other financing purposes.

Here in South East Asia, most consumer loans are characterized by various types – Short term loans, instalment loans or long-term loans, secured and unsecured loans.

  • Short term loan. This is also called payday loans for employed consumers, they are for short-term finance requirement. Short term loans have to be repaid at the end of the loan term in a lump sum including interest rates.
  • Instalment loan or Long-term loans. This kind of loans are paid at regular intervals, usually monthly. Home and vehicle loans come under this category. The longer the repayment term, more the cash flow as interest rate calculations vary.
  • Secured loans. In this category, you “secure” an asset, a home, car or any collateral that can be used to recover payment if you fail to make the guaranteed payments. Secured loans also apply to home and car loans and since they are backed by sizeable collateral, interest charges on such loans are lower.
  • Unsecured loans. This loan is those that do not require collateral and usually given only to borrowers with excellent credit ratings and histories, more often companies or high net worth individuals and interest rates are compounded.

Securing the best personal loan singapore can be a very long process especially if are applying for a long-term or unsecured loans. Some creditors may require a lot of documents and some proof from your employers or previous creditors if you have a good credit standing, that’s it is essential to have a good credit profile whenever you apply for each of your loans.

Sticking With Traditional Loan

We are all aware that borrowing money to finance personal, medical and educational expenses is considered as part of our everyday’s life. The demand for  personal loan and payday loan from loan providers is consistently rising thus paving the way for more lenders to enter the market. Even the internet is filled with various loan providers that you don’t need to get out of your house to shop around for the best loan deal. All you do is surf the net until you find one that would suit your need. However there are still conservative borrowers who would rather apply with traditional lenders such as banks whose approach to approving a loan can be somewhat difficult.


Select the Proper Lender that would satisfy your Goal


Just like shopping, it is best to shop around for the bank that can give you the best deal on the loan. To do this you need to be sure and be specific on the kind of loan you require, repayment terms that would suit your income and more importantly, the length of time you would want to finish off the debt. Once you find the most suitable bank, start making inquiries on their loan policies. This includes standard rates for an instant cash loan, processing fees, documents required and other pertinent information that you feel is necessary for you to make a decision.


…Before Anything Else


Once you’re satisfied with the information that you got from the bank and prior to continuing to apply for the loan, you must first analyze and study your financial situation. Make sure that your income will be enough to handle the payments for the loan. You must also have all of the required documentation required by the bank at a moment’s notice.  You must remember that banks are very particular about documentations that they require you submit it only once, else you may just find out that you loan application has been temporarily shelved. Most important of all, traditional lenders gives very high value to your credit score or rating. So make sure that your CREDIT standing is within their required limit.

The Basics of Borrowing Money

Individuals have their own personal reasons why they would want to borrow money from a licensed money lender singapore. Generally, it’s because they are in some financial jam and getting their hands on some hard cash would solve this. Applying for a personal loan is no laughing matter because getting other people’s money will put you in a predicament of where your top priority will be paying off the debt. BORROWING money from traditional or alternative lenders is common. But just because you need to get hold of immediate cash, you will not put in time to plan how you will go about borrowing the money. When borrowing, consider three important factors before committing yourself to a loan


Can you repay the Loan?


Think about it. Getting the loan and spending it is easy but repayment is another story. Before you even borrow a cent, make a thorough study of your income and expenses. Make sure that from your income, you will be able to pay off your usual expenses plus to have enough left over to cover the amortization of the loan (if the repayment term is on installment). If the loan is a lump sum payment, see if the surplus you will have will cover that too. Else never commit to a lump sum loan deal. If there is even a slight of doubt that you might not be able to repay, forget about borrowing and find some other way to get cash. One way perhaps is for you to cut down on other unnecessary expenses (such as entertainment and luxury items) and use the saving to cover your needs.


Think About the Risk


Borrowing money is very risky especially if you’re not really sure how to repay it back. If the loan is covered by collateral and you default on the payment, you will end up losing more than what you have bargained for.


Look for the Best Deal


If indeed you need to borrow, make sure to shop around for the best deal you can get especially in terms of interest rate, amortization cost and processing fees.

How stable are Your Finances?

For any individual specifically for the sole breadwinner of a family, managing and controlling your finances to make it stable can be very difficult. This is especially true if you only have minimal savings plus relying only on a fixed income each month. But no matter how difficult it can be, it has to be done and the only way to do it is proper management and knowhow on balancing your monthly income against your expenses. If you look at it, this is simple enough. You don’t have to be a genius to know that proper management of your money is to make sure that you don’t spend more than what you earn. If your expenses exceed what you make in a month, then you are really in big trouble and may end up borrowing money from various personal loan lenders or maxing out your credit card  which will surely put you in the poorhouse. Here are some tips that you may find helpful in managing your finances.


Proper Management of your Money


Budget is the key. Proper balancing of what you make and spend is the best and only way to make sure you will be financially afloat. If possible, aim for at least having 10 to 20% of your income placed in savings. This may look hard but very doable. Most people actually can save a lot if only they are able to control the urge to buy impulsively. Yes, this is one of the major causes of why people are not able to save. People are basically vain and this is the reason why they go on shopping sprees. If you can take this out of the equation, it is a sure thing that you will be able to save. Second, make sure you focus more on the necessities (such as utilities, education, & insurance) instead of luxuries. For instance, if you have an old car but still working and serving its purpose, why buy a new one? The point here is you can always postpone purchasing luxurious items until such time you have enough surplus to do so.

Which is the Better Choice: Credit Card Advance or Payday Loan?

Sooner or later everyone will experience some kind of financial emergencies at least once. This is the reason why borrowing money has now become a necessity to individuals. This is especially true to workers whose income may just be enough to cover their day to day expenses. For these types of individuals, there is a limit to where they can access a loan and it is usually their credit card or the popular payday lenders. Taking a personal loan against a credit card or to apply for a PAYDAY LOAN has its positive and negative side. The following may help you analyze where to turn to.


Cash Advance Loan A.K.A. Payday Loan


Cash advance loan known also known as payday loan is a type of credit and are normally easily accessed by individuals who has regular fix income. Payday lenders are commonly available both in the street and online. This therefore makes it easy for cash strapped individuals to gain access to them.  The main working of a payday loan is for the lender to lend the money to borrower until the latter’s next payday. Payday loan is usually short term and does not normally go beyond a month. The reason for this is because salaries are usually given at middle and at the end of the month so short term money lenders expects to be paid at the time the borrower receives his salary. Some lenders would prefer a post dated check which could be immediately deposited at the loan’s maturity date. The only requirement for payday loan sg is the borrower’s proof of income.


Credit Card Advance


Credit card advance is totally different. There is neither processing nor documentations to submit. The Borrower already has the credit card so all he has to do is swipe it (with the assumption that he has a credit card) and the loan come out of the ATM. Cash advance from Credit card can cost more considering that cash loan provided by the same carries a very high interest. Aside from this, it can tremendously increase the cards balance thereby raising the finance charges that it will incur.