People in Singapore earn a good amount of money for their living. They do not like to take a loan but there are emergencies in which they need a huge sum of money. In such a case, one can apply for personal loans. Many financial institutions provide this loan and one such institution is Easy Credit SG. Personal loans can be secured or unsecured and the difference is in the rate of interest which is low in the case of the secured personal loan but people need collateral to avail the loan. This collateral can be a house, car, or any other thing. People need to think when should the loan be availed and when it should be avoided.
When to avail personal loans
People can avail of the loan to pay different types of bills but they also need to think about processing fees and rate of interest. Despite this, personal loans are considered as the best option to meet different types of expenses. The repayment of the loan is also very easy. Here are the circumstances in which people should apply for personal loans.
Medical emergency
A medical emergency can knock the door any time and anybody in the family can face it. In the case of a major emergency, a huge sum of money is needed for treatment. People have to pay for hospital bills, treatments, surgery, and many more. In such cases, personal is the best option.
Family emergency
A family emergency can be of any type like the death of a loved one, etc. The funeral expenses are very high in the country and such a case; people can avail of a personal loan. The processing time of the loan is less and people can get the money to perform the last rites.
Repairing the vehicle
A vehicle can be damaged in an accident or it needs a huge service charge and in such a case, people can go for a personal loan to meet the expenses.
Expenses related to education
A personal loan can be availed for meeting the expenses related to education. People need to pay tuition fees, purchase stationery, repair laptop, etc. In such a case, personal loans are the best option.
Debts related to credit cards
People who have a credit card need to pay a high rate of interest. If people are unable to make a payment, they can go for personal loans. The interest rate for a personal loan is very less in comparison to a credit card. People need to think about repayment so that no debt remains in the last.
When to avoid personal loans
There are many situations in which people need to avoid personal loans and these situations are discussed here.
Vacation, honeymoon, wedding
These are the things which have to be enjoyed for a few days but the debt has to be paid for years which are not a good thing. This can also deteriorate the financial condition of the debtor. People need to arrange marriage functions as per their earning. This will avoid the situation to borrow a loan.
Buying a car, renovation of the home
People can get a personal loan for all these things. In such cases, people can take a car loan for buying a car or home loan for renovating the house. The interest rate of these loans is much lower in comparison to a personal loan.
High-risk investment
People should not take a personal loan for high-risk investments. In case, there is a huge loss, then repayment of the loan will also be a big problem.
Consider these things before availing the loan
There are many things that people have to plan to avail of the loan. These things are described here.
Period of repayment
An applicant has to think about the period of repayment period before availing of the loan. If the repayment period is longer, the number of installments will be low and repayment will be easy. But in such a case, the applicant will have to pay a huge amount of interest. It is better if the applicant chooses a personal loan for the short term. In this case, the installment may be high but the loan can be paid back easily.
Rate of interest
The next thing that the applicant has to think about is the rate of interest. The rate of interest is based upon the credit limit and the income of the applicant. The banks may advertise for a low rate of interest but in the end, it is very high. The rate of interest can also be revised from time to time due to competition.
The maximum amount to be borrowed
Banks can let the applicant withdraw a huge amount of money which can be four times his total income. The income should be at least $20,000 per annum.
Wrapping Up
These are some of the things which people need to take care of while availing a personal loan from esteemed institutions like MoneyIQ SG. The interest rate is very high but people can get a huge sum of money to meet the expenses.
