A personal loan is an amount you can borrow from a bank or money lender in case of an emergency or a planned expenditure that requires you to have more funds than you possess. While getting a personal loan gives you a certain freedom to be able to spend an amount for a need that would have otherwise been difficult for you, one must remember that a loan must be used responsibly.
Also, before applying for a loan there are certain things that you must consider including if this is the best personal loan for you. The best personal loans are ones that give you lesser personal loan interest rates and give you some flexibility to repay the loan amount. Before you zero in on a bank or money lender that you will be borrowing the loan from here are a few things you must consider to ensure you’re applying for the best personal loans.
The number one question that you must ask any bank or money lender is the personal loan interest rate they are offering. Now when you talk about interest rate one must know the difference between Applied Rate (AR) and Effective Interest Rate (EIR). Now an Applied Rate is the one where the loan principal remains the same throughout the tenure of the loan. It does not take into account the fact that after each repayment the principal amount is reduced.
Now an EIR reflects the actual cost of borrowing provided the repayment is made on time. This is calculated after the consideration that over a period of time there will be a reduction in the principal amount.
Additional fees and processing charges
When you take a personal loan in Singapore remember that apart from the interest rate that you would be paying there are certain fees that you may consider too. A good personal loan promotion in Singapore is one that gives you a competitive annual fee. Now, an annual fee is the fixed sum that a bank charges as a fixed sum every year of your repayment plan. So, if you take five years to repay the loan you may have to give five instalments of annual fees.
Another thing that you need to keep in mind is the late payment fees. While you may have all the best intentions to repay the amount in time, sometimes unforeseeable events can happen and you may skip a payment or repay less than the agreed amount. A best personal loan is one that does not apply very hefty or stringent late payment fees.
The funds transfer
A personal loan promotion in Singapore often mentions the tenure in which you will be able to get funds transferred to your account. Depending upon the time and ease with which you can take a personal loan in Singapore one must consider choosing the bank or licensed money lender.
Remember a loan is required mostly in a situation where you need the money urgently so a quick loan is a factor that is to be considered. While it depends on a lender how quick their processing time is from your end you can quicken the procedure by keeping all your documentation ready and streamlined.
Now for any financial transaction, the most important thing to consider is the reputation of the bank or the money lender. A lender who does personal loan promotion in Singapore often comes with a good review. A reliable and well-established lender is always transparent in their dealings, and does a thorough check of your credit history. A big bank with a reputed name should be your first choice for the best personal loans.
Early repayment fees
Another important consideration while applying for a personal loan in Singapore is also how much the bank will charge in case of early repayment. While a simple calculation may make you think that the lender should be happy to receive the amount early, this is not how transactions in the financial world work.
By repaying the amount earlier than you anticipated your lender or bank may not be able to make the expected profit on your money. In such a case you must ask beforehand about the early repayment fee for you to make an informed decision on the best personal loans in Singapore.