Are you looking forward to filling a financial shortfall in your budget and have been wondering what the best option is? Some of the top options that you might want to consider are personal loans, small loans (micro loans), and secured loans. However, a secured loan stands out from the pack, particularly because of the low-interest rates. So, is it the best loan for you?
To help you make the right decision about using a secured loan, we will dig deeper into secured loans in Singapore, compare them with unsecured loans, identify the assets you can use as collateral, and the process of application.
How Does a Secured Loan in Singapore Work?
What is a secured loan? A secured loan is defined as:
A form of credit that is backed by an asset.
An asset acts as collateral to cut down the risk involved in lending cash to a borrower.
Is also called a collateral loan.
One good example of a secured loan is a home mortgage, where the house is used as collateral for the money lent to you.
If you do not have collateral to put through, this might not be a good option for you. Consider taking an unsecured loan in Singapore, such as a personal loan.
Comparing Unsecured to Secured Loans in Singapore
What is the primary difference between a secured and unsecured loan? We have outlined this in the table below:
Advantages and Disadvantages of Using Secured Loans in Singapore
Taking a secured loan comes with benefits and risks, and it is prudent to understand them before signing the loan agreement. Check out some of them below and make up your mind whether to go for it or a different type of credit:
Secured Loan Advantages
Secured Loan Disadvantages
Assets that You can Use as Collateral Loan in Singapore
After checking the pros and cons associated with secured loans, have you made up your mind? If you have, here are some of the assets that can be used as collateral loan in Singapore:
Equity in your home
What Should You Do if You Cannot Pay Your Secured Personal Loan?
Being unable to repay a secured loan is the last thing that you would want to imagine because of the risk of losing assets attached as collateral loan. However, it happens quite often, and it is important to not only be prepared for the best, but also imagine the worst. So, if it becomes challenging to repay the loan, here are a few things that you should consider:
Renegotiate the Terms and Conditions of the Loan
Go for Debt Consolidation
Go for Debt Counseling
How to Apply for a Secured Loan in Singapore?
Despite the fact that secured loans come with lower risk for lenders in Singapore, the process of application is still tedious and lengthy. The delays are mainly caused by the requirement for verification of the asset being put forward. For example, if you are tagging your personal car, the lender will want to ascertain its actual value. However, you can shorten the loan application process by a huge margin and increase the chances of getting it approved by working with lender comparison sites.
One example of a lender comparison site is Lendela, which helps to simplify the process of loan applications for borrowers.
Why use Lendela?
As of today, Lendela is solely offering loan comparison and matchmaking for unsecured loans. Here are the steps to get the best secured loan with our help:
Visit Lendela's website to submit an application for a secured loan in Singapore
Get multiple offers from different banks and financial institutions
Compare your options and select the preferred offer
Book an appointment online with the selected bank to sign the loan agreement
Sign the loan agreement, and the money is released to your account
Apply for a secured loan in Singapore online now.
If you want to borrow funds and target the lowest interest rates, this post has demonstrated that a secured loan in Singapore might be an excellent option. Because you are putting forward collateral to cut down the risk involved, most lenders in Singapore will be willing to loan you at a lower interest rate. Make sure to stick to the agreed repayment schedule because defaulting could result in the sale of your asset.
- A secured loan requires collateral, and the amount borrowed depends on the value of the collateral used to secure the loan.
- Secured loans have many advantages, such as good interest rates, high amounts of cash, and even being able to borrow with a low credit score.
- Failure to pay your secured loan will result in not being able to borrow again and losing your assets used to secure the loan.
- If you are having trouble meeting repayments seek help from debt counselling or try debt consolidation.
- Lendela can help you select the best options for secured loans in Singapore.