The money borrowed from a bank by an individual to satisfy their personal use and payback in the means of monthly installment with an interest rate defines personal loans. We should make sure that the money we borrow should be an appropriate kind of loans and it should satisfy us.

Need for a personal loan: The loan amount we get from the bank can be used in various needs of our life such as travel, medical, electronic gadgets, holidays, business, house renovation, financial issues, education, wedding, etc.

Working of personal loan: It is same as all other loans, it follows three steps

  1. Login in with your personal details and bank details.
  2. Check for the amount available and apply for it
  3. After applying for it waits for the results.
  4. Once the result is produced take way the loan amount and send for your needs.

Interest rates: The interest rate of the loan amount is fully dependent on the Cybil score, tenure, income, occupation, etc.

Types of personal loan

Unsecured loan is supported only by the borrower’s creditworthiness. Borrowers must have a good credit score to get approved personal loans. Some examples of unsecured loans are credit cards, student loans, etc. there are few types of unsecured loans and they are.

Term loan is a fixed loan where there will be no changes in the interest rates, the interest remains the same until the loan gets over.

Revolving loan is an arrangement that allows the loan amount to be repaid, withdraw, and redrawn any number of times until the arrangement expires.

Consolidation loan refers to the loan take to pay back the ongoing loan here all the small pieces of loan amounts are grouped into one single huge loan.

Secured loans can be seized by the lender bank if you default to pay back the loan amount. Some banks, credit unions, and online money lenders offer this kind of secure loan, where we can borrow loans against your car, Personal savings, or another asset. And they offer typically less unsecured loan amount, therefore secured loans are considered to be less risky for lenders.

Co-sign loan: If a person with a low credit history or with low Cybil scores they have an option to bring another person and get the loan with his details where he becomes the witness to repay the loan if the Borrower fails to repay and it acts as a form of insurance for the lender. Not only that the person with a good score has the most possibility of getting the loan quickly, and both the individuals are responsible to repay and are liable for monthly payments.

Scenarios where personal loans are best

Personal loans don’t require more documentation and easily offer a lower interest rate so here are some of the five best scenarios where personal loans help them to provide to fulfill our needs.

Medical emergencies: Health is a power of living that shows them the souls are still alive it is the complete state of physical, mental, and social well being of a human rather than to say we are free out of disease. People get sick suddenly or an unexpected thing happened suddenly and we don’t have adequate savings what do we do for the treatment we choose getting a personal loan to cure it doesn’t require any collateral.

Higher education: Nowadays education plays a vital role in every student life but education loan doesn’t meet up to fulfill their needs they cannot manage up with the tuition fee, accommodation cost, and mainly high-interest rate. Students studying in countries can get personal loans Singapore which is very easy to get the loan for the students who do their higher studies.

Wedding: Every bride and groom has a lot of dreams for their wedding and their parents to have a lot of expectations for their sons and daughters wedding so getting up a personal loan will meet up their desire. Using a credit card to purchase for a wedding has to pay a great loss on credit cards it also puts a higher interest rate. So personal loans are more adaptable for wedding scenarios.

Clearing a high-interest loan: Every moment won’t be as same some bad moments may also appear sudden while we have a high-interest loan to clear and if we find a way to clear it the best choice is to get a personal loan and clear the high-interest loans with a low-interest loan.

Home renovation: Whenever you hear the word dream home everyone has a variety of ideas blooming through while thinking of how to make it come true housing loans appear in the higher interest rate. So going with a personal loan helps us to reduce a higher interest rate than housing loans.

Personal loans are versatile, decent interest rates, loan approval quick, monthly payments stay the same, variety of lenders offer them with lower interest rate. Personal loans Singapore keeps you smart enough in your emergency time. Learn more how personal loan works with MoneyIQ – Instant Loan.