Sometimes, all that you need to move to the next level of your life is a helping hand. Whether you plan to buy a new car, acquire another property, or get fast cash for a holiday to a tropical destination, a personal loan can help you get there faster. However, which loan is the best option for you? Is taking a personal loan in Singapore a good idea? What is the personal loan interest rate in Singapore? To help you answer these questions and others, here is our complete guide on personal loans in Singapore.
What are Personal Loans?
Personal loans are financing extended by a bank or financial institution, allowing the borrower to use the funds for different personal purposes. The loan is issued by the bank as a lump sum, and the interest starts to accrue from the moment the money is deposited in a borrower’s account.
Personal loans are also referred to as consumer loans and are not backed by collateral. Unlike car loans or mortgages, personal loans are unsecured types of credit. When you apply for a personal loan in Singapore, the bank checks your Singapore credit score to gauge your creditworthiness and then determines the personal loan interest rate to attach to a loan. If your credit score is good, the interest charged on the personal loan will be lower compared to another person with a poor credit rating. If your Singapore credit score is low, the bank will attach a high-interest rate to the loan. Therefore, you might want to consider improving your credit score before applying for a personal loan. The bank will also check your ability to repay the loan before approving it. Once your personal loan is approved, you are expected to repay the principal together with interest over an agreed period. Taking a personal loan in Singapore can be an excellent idea if you have financial issues to fix urgently. It also allows you to make big purchases and repay slowly at your own pace without causing major disruptions in your life.
Where can You Get Personal Loans in Singapore?
Singapore personal loans are offered by a wide range of financial services providers, including the following:
Most banks in Singapore offer personal loans to their clients. Before they can approve the loan and credit cash into your bank, they require you to have a good credit score. In some cases, banks allow their customers to apply for personal loans without visiting their branches because they already have all the details, such as personal information and transaction history. Although there are many banks in Singapore, it is important to appreciate that their conditions for personal loans might be different. Therefore, it is advisable to only work with a bank with the best loan conditions.
Traditional Financial Institutions
Financial institutions support their clients with personal loans, credit cards, revolving credit, and at times auto loans. Before approving loans, financial institutions carry out thorough checkups on the borrower’s creditworthiness. They also stand out because of their competitive personal loan interest rates. At times, Singaporean financial institutions can be more flexible on the parameters they use to gauge an applicant's creditworthiness and even approve personal loans where banks would have declined. So, if your application for a personal loan in a bank was rejected, it might be a good idea to check with the financial institution. Make sure to only engage with financial institutions that are allowed to operate in accordance with the Ministry of Law’s (MoL) restrictions.
To make financial services available to more people, virtual banks will become more and more common in Singapore. Virtual banks offer services just like traditional banks but do not require a physical presence. By operating virtually, they are able to cut down costs associated with running multiple branches in busy cities. These institutions have the ability to offer personal loans and other products. Because virtual banks are relatively new, their personal loans are more competitive than those of competitors.
"Online-based" Financial Institutions
Online-based financial institutions are mainly focusing on utilising the internet and technical innovation to provide a faster and more convenient way for consumers to get a personal loan. They leverage technology to make it easy for more people to access loans. These financial institutions provide flat-rate quotations and are normally faster when it comes to loan approval rates. The growing competition in the Singaporean personal loans market has made online financial institutions craft more effective methods of winning clients. For example, using online-based financial institutions can come with added benefits, such as zero fees and flexible disbursement.
Peer-to-Peer Lending (P2P)
Peer-to-peer lending is a new financing model that allows people to get a personal loan in Singapore through web-based platforms without using a registered intermediate financial institution. The primary goal of the P2P model is cutting out the middleman from the lending system, meaning that the cost of personal loans is pretty low.
To make identifying the best bank for a personal loan easy, one of the best ways is to use a comparison site, such as Lendela. We do not only make your loan application easy but also ensure you get different offers so that you can pick the best option.
When to Go for a Personal Loan in SG
One of the reasons that make personal loans outstanding is that you have a free hand on how to use the funds. Unlike a car loan which can only be used to buy a vehicle, personal loan funds are released into your checking account. For example, you can use some of the money to buy home electronics, another portion for entertainment and the rest for college education.
Although you have a free hand on how to use the money, it is advisable to focus on what delivers the highest value. This is crucial because you will need to pay the money plus interest. Here are some of the best uses for a personal loan in SG:
This is one of the most popular reasons that make people go for personal loans in SG. It means that you use the personal loan funds to clear other high-interest loans so that you are left with a single loan with lower interest rates. Debt consolidation might even help you to improve your interest rates.
Refinancing a Loan
A lot of banks in Singapore allow their clients to refinance existing loans. Most people prefer refinancing their loans if they qualify for lower interest rates because their credit scores are now better compared to when they borrowed the loan. Consider only working with banks or financial institutions that allow refinancing.
If you have major home improvements, such as roof repairs or repainting the walls, you can get the cash to do the job through a personal loan in Singapore. Once the funds are deposited into your account, go ahead and work with the contractor of your choice to do the repairs you want.
There is nothing as stressful as getting a medical emergency when you do not have enough cash. However, using a personal loan might be the best way out because it is approved fast and is unsecured.
9 Benefits of Using a Personal Loan in Singapore
When you get the best personal loan in Singapore, it comes with a number of advantages, including the following:
1. There are No Restrictions on the Way You should Use Your Personal Loaan
This is one of the main advantages of taking a personal loan over other types of credit. Unlike other types of loans, such as renovation loans or car loans, which must be used for a specified purpose, a personal loan is open. Once the loan is approved, you are free to use the money the way you want. So, whether you want to use the funds for buying farm machinery and part of it for a house renovation, it is okay. Take the example of a person who borrows fast cash loans for holidays. If he changes his mind and decides to build an extension at home for rent, there will be no limitations.
2. The Personal Loan does Not Require a Collateral
Unlike common secured loans that require you to use collateral, such as a car or land, a personal loan in Singapore is unsecured. Therefore, the bank disburses the funds based on the assessment of your credit rating and ability to repay. This implies that none of your assets will be at risk in the event that you are unable to repay the personal loan interest.
3. The Documentation is Easy
When applying for a personal loan in Singapore, the last thing that you want is to be required to prepare dozens of documents. In Singapore, the process of documentation is pretty simple, especially if you use Lendela to find the best personal loan. All that you need is to provide the proof of identity, address, recent salary slips, and bank statement for 3-6 months (depending on the bank). If you are going for a personal loan with a bank (through Lendela’s service or not), you will need to present these documents at their branch offices.
If you choose to move forward with a personal loan offer, you only need to upload these documents on the Lendela platform before the final confirmation. Before the documents are uploaded, you will need to fill out our application form. See – with Lendela it is possible to submit the application, upload all necessary documents, compare multiple personal loan offers and get approved for the loan that you choose, without leaving your house.
4. Using Monthly Repayment Model Helps to Reduce the Financial Burden
When a personal loan is approved, the funds are released in a lump sum into your account. However, the repayment is made in monthly instalments. This implies that you will not be overburdened with the need to pay large chunks of money at any one moment. However, it is important to appreciate that when you take longer to pay a personal loan, the total amount payable will also be higher.
5. Personal Loans are More Cost-Effective than Credit Card Loans
Although credit card loans are easy and fast to secure, a personal loan is a better option because it is cheaper. The interest rates on credit cards are very high, while personal loans in Singapore can be as low as 5% per year.
6. Singaporean Personal Loans are Processed Fast
Most of our banks take less than 24 hours to process personal loans in Singapore. Once you have filled out our personal loan application form and provided all the required documents, the decision to approve your loan is made almost instantly by our partnering banks. This makes personal loans very convenient, especially if you are looking for urgent cash.
7. The Money is Credited to Your Account Quickly
After the final approval of a personal loan (which happens at the bank's office), the funds are deposited into your account immediately on the spot. Please note that some banks are closed during public holidays or weekend days, which will affect the speed of the disbursement. If you are an old customer of the lending financial institution, the money will be credited into your account even faster.
8. Personal Loan Repayment Period Flexibility
The tenure of the personal loan depends on the principal and interest rate. You will be provided with a wide range of payment options, from one to five years. Some banks might even allow a longer tenure of up to ten years. Ensure to discuss the loan tenure with the bank to ensure you only settle for what works for both parties.
9. Singapore Personal Loans Come in Different Types
Personal loans are not merely fixed schemes. Rather, they come in a plethora of loan deals designed to suit every party. Most lending institutions have personal loans designed for professionals in various industries, such as doctors, lawyers, investors, and engineers. Farmers and women also get plans with low personal loan interest rates because of their social characteristics.
Cons of Using a Personal Loan in Singapore
The main disadvantage of a personal loan or a marriage loan is that most banks view it as a high-risk type of credit. Therefore, the loan is likely to attract a higher interest rate compared to secured loans. However, you can still enjoy low-interest rates by ensuring your credit score is good.
Although personal loans provide borrowers with a free hand on how to use them, this can also turn out to be a key disadvantage. For example, some people might get tempted to use the money in ways that do not deliver a lot of value because they have a free hand. To avoid this, it is advisable to only go for a personal loan to address a specific need, such as debt consolidation.
While it is true that personal loans SG come with some disadvantages, they have so many awesome advantages. Therefore, if you have a specific need that requires to be financed urgently; do not hesitate to go for a personal loan from the right bank.
Alternatives to Personal Loans in Singapore
Personal loans are considered flexible financing solutions for those who qualify. Depending on your credit score and personal needs, you might want to compare personal loans with some alternatives. So, here are some options worth reviewing:
When you take a personal loan, the repayment will include personal loan interests and applicable fees. If you can cover your expenses with personal savings, it will be a good way to avoid paying the interest and fees attached to personal loans. Note that if you have a qualified retirement scheme, early withdrawal might come with a penalty.
As we have highlighted, a personal loan is a form of unsecured financing, and the bank puts a lot of weight on the borrower’s credit score. If your credit score is poor, you can opt for a secured loan which requires you to have a guarantor or collateral, such as a house.
The guarantor will be responsible for paying the remaining amount of the personal loan if you default. If you used your land, car, or house as collateral, the bank would take its possession until the loan was cleared. The collateral can also be sold to recover the personal loan plus the interest if you are unable to repay it at the previously agreed personal loan interest rate.
Using Your Credit Card
If you compare personal loans to credit cards, the latter comes with higher interest rates. However, a credit card loan might be a better alternative if your credit score is poor. If you opt to borrow from your credit card, the interest rates are very high. Also, it is important to repay on time because the penalties can be very high.
If you are looking forward to buying a car, one alternative to consider is a car loan. You can opt for a conventional car loan, which has an interest rate calculated on the basis of the set funds. The interest rate can be set on a fixed or floating basis.
Personal Line of Credit
Unlike personal loans that are disbursed as a lump sum, line of credit financing allows borrowers to access the funds to a specific limit on an as-needed basis. With this option, you only pay interest on the borrowed amount. Line of credit loans can be a good alternative personal loan option for people with expenses spread over several months.
Home Equity Loan
If you own a home in Singapore, a home equity loan might be a good alternative to personal loans. A home equity loan is a financing option that is backed by the equity of the borrower’s home.
Myths to Avoid when Looking for the Best Personal Loan in Singapore
If you are taking your first personal loan in Singapore, there are many myths and misconceptions that you might come across. Here, we are going to list them in our personal loan guide so that you can avoid them and get your personal loan approved.
Personal Loans are Good Only for the Salaried Candidates
One of the common fallacies that you will come across out there is that personal loans are only good for those with salaries. When you make an application for a personal loan, the bank is interested in understanding your ability to repay the money plus the interest. So, all you need to do is proof of a reliable source of income and good credit score.
Even people who are employed might get their application for personal loans declined if they are considered high-risk parties. To know if you are eligible for a personal loan, check with various banks to see their requirement for personal loan approval.
Personal Loans have High-Interest Rates in Singapore
Some people hold the view that the personal loan interest rates in Singapore are always high. However, this is not always the case. When you place an application for a personal loan to a selected bank, the interest rate is based on two most crucial components; your credit score and repayment capacity.
If you have a good repayment capacity, banks consider you a low-risk party and will charge a low-interest rate. Contrary, if your credit score is excellent, the interest rate will be high. In some cases, people with very low credit scores and poor repayment capacity get their applications for personal loans rejected.
Personal Loans can Only be Provided by Banks
Another common misconception about personal loans is that they are only offered by banks. Although it is true that banks form the majority of the financial institutions that offer personal loans, there are other banks that can help you with credit in Singapore. For example, you might want to try borrowing from online-based financial institutions or peer-2-peer lending organisations.
Indeed, you should compare the personal loan offers provided by multiple banks and only work with the one offering better terms and conditions.
Personal Loans are Not Available to People with Existing Loans
This argument is another common misconception you are likely to grapple with when looking for a personal loan in Singapore. Most financial institutions will approve an application for a personal loan even if the borrower has another loan as far as he can comfortably service both loans. Therefore, if you have an urgent need for money and you are still repaying another loan, do not shy from making an application for a personal loan.
Personal Loans Lack a Prepayment Option
This argument is incorrect. The reason why some people believe that personal loans do not have a prepayment option is that their tenure is shorter compared to other types of loans, such as mortgages. However, borrowers can repay their loans before the loan tenure ends.
Most banks tend to have a minimum tenure for borrowers to make monthly instalments. Once the minimum tenure for the personal loan is over, you can foreclose the personal loan after paying a fee for prepayment.
The Processing Time for Personal Loans is Long
While this might have been true years ago, things are very different today. All financial institutions that we partner with in Singapore today are technically integrated with our platform, which makes the vetting of applicants fast. Today, applying for a Singaporean personal loan or a wedding loan via Lendela and getting it disbursed into your account, can be completed within 24 hours.
As more banks adopt the paperless model of operation and competition in the lending niche intensifies, you can expect personal loan processing times to be considerably shorter.
Questions to Ask When Applying for Personal Loans
Taking a personal loan is a good alternative to using a credit card because you are able to finance a big purchase and save on interest. Before you can apply for a personal loan, it is important to ask the following questions:
1. How Much Will You Pay as Interest?
When a bank approves a personal loan, you will be required to repay the principal amount together with interest. In Singapore, different banks have varying personal loan interest rates, and it is crucial to do your research and identify the most affordable. Remember that the interest rates for personal loans are determined based on the borrower’s credit rating and repayment ability.
2. Can You Afford the Monthly Instalments?
Once you have established the personal loan interest rates charged by different banks, you need to move a step further and ask, “Can I afford the monthly instalments?” In some cases, people opt for longer loan tenure to enjoy lower monthly payments, but this is not always a good idea. With longer loan tenure, the total amount payable will be higher.
As a general rule, you should target spending no more than 30% to 40% of your income on debts. This is important because, in addition to repaying the personal loan, you will also need money for other expenditures, such as medical bills, utility bills, education for kids, and rent.
3. Does the Personal Loan have a Processing Fee?
Banks might have additional charges, such as sign-up or originator fee, but it is possible to also get some that only have the interest. A sign-up fee is a one-time upfront charge that banks subtract from the personal loan to meet the processing or administration costs.
If you are borrowing $10,000 and the personal loan has a sign-up fee of 1%, it implies that the amount that will be deducted when the loan is deposited into your account is $100. In some cases, you might be able to negotiate for a lower sign-up fee or have it waived altogether.
4. Is My Credit Score Good Enough?
To approve personal loans, banks strongly rely on your credit rating. If you have a poor score, the bank will attach a higher personal loan interest rate to the loan. To be sure about your credit score, it is advisable to check it before applying for a personal loan. This will give you the opportunity to see your personal credit score and correct errors if any.
Incorrect credit scores can arise from the wrong entry of your personal information or omission. If details of your previous loans were entered incorrectly or are missing, the credit score will be incorrect. In such situations, you only need to provide documents proving the correct position. Then, the credit reference agency will recalculate your score.
If the credit score is low and you want to enjoy lower personal loan interest rates, it might be a good idea to improve it first before making an application. You might also go ahead and take the loan, and ask for refinancing when the credit score improves.
5. How Will the Personal Loan Impact Your Credit Score?
When calculating a borrower’s credit score, credit agencies incorporate a number of factors, including the credit mix. Therefore, if you already have other lines of credit, such as credit cards, getting a personal loan will strengthen the credit mix. The overall impact is improving your credit score.
When talking about the credit mix, it is important to be careful because it means you have a combination of debts. Ensure to only borrow what you can afford to pay on time.
6. How Soon Do I Need the Funds?
The lovely thing about personal loans in Singapore is that they are processed pretty fast. Most organisations only take about two days to approve the loan and send funds to your account. However, some financial organisations still take longer and might not be of help if the funds are needed urgently. Carefully review different banks to see their terms and conditions, including the approval period.
7. Do You Want to Pay Creditors Directly or Have the Money Deposited in Your Account?
Once a personal loan is approved, the funds are deposited into the borrower’s checking account. However, you can opt for a different channel if you are working on debt consolidation. Instead of having the money sent to your checking account, simply ask the bank to deposit the personal loan directly to other creditors. This will be a great way to avoid getting the temptation of using the money for other purposes.
How to Identify the Best Personal Loan Provider in Singapore
If you want to get the best personal loan in Singapore, it is important to look for the right bank. However, it can be challenging because there are so many of them. This brings about one key question, “How do you identify a good personal loan provider?” Here are some useful tips in this personal loan guide to help you:
Registered to Offer Financial Services in Singapore
To avoid falling into the hands of scammers, you should only work with loan providers registered to offer financial services in Singapore. These organisations strictly follow the rules outlined in their licenses to access the Singapore market. Therefore, start by confirming the license number of the loan provider before submitting your application and signing a personal loan. One way to make sure that you only compare licensed loan providers is to fill out an application with Lendela. We only partner with serious financial institutes that will walk the extra mile to help you with your Singapore personal loan needs.
Feedback by Previous Clients
To identify a good bank, you can also check the feedback provided by previous clients. What did they have to say after using personal loans from the selected bank? If many borrowers have positive feedback about a bank, that might be a good option.
Make sure to also check what expert reviewers have to say. With professional reviews, you can get finer details of individual banks and make a more informed choice on who to work with.
Should Not have Hidden Fees
When you secure a personal loan, it should not have hidden fees that can unnecessarily increase the total repayable amount. As you review different banks, put emphasis on the difference between the principal and total amount payable. If the interest does not cater for the entire difference, the chances are that there is an additional hidden charge. If there are additional charges, has the loan provider disclosed them in the agreement? With Lendela, you only get introduced to banks and financial institutions that are 100% transparent about all their fees. Furthermore, you will get a clear picture of each bank’s terms and all the costs involved with the loan in the comparison stage. Once you know all the details, you select the offer and bank you want to proceed with.
Should Have Multiple Loan Options
Although today you are interested in a personal loan, it could be an advantage if the bank also has other interesting financial products. This implies that instead of working with a different company when looking for another type of credit, such as a renovation loan, it will be easy to stick with the current bank.
Good Customer Support
One indicator that you should use to note a good financial institution is customer support. If a bank has good customer support, it implies that customer issues can be sorted faster and professionally. Good customer support would particularly come in handy when you are researching the best personal loans in Singapore. Some components of good customer support include:
Multiple communication channels, such as a chat line on their website and a phone number.
Knowledge base pages that contain information to help clients decide on the financial services to take from the organisation.
Demonstration videos showing borrowers how to go about making loan applications.
The website should also have a good layout to make it easy for borrowers to navigate through, upload documents, and complete loan applications.
At Lendela, we pride ourselves when it comes to customer support and transparency. We stay with you all the way from the initial application, via document upload and loan comparison, to the appointment at the bank's office where the final agreement and disbursement take place. Feel free to use our service for free anytime, and get access to multiple personal loan offers from reliable banks and financial institutions in Singapore. If you have any questions, let us know and our experienced Customer Service representatives will help you.
Dos and Don’ts When Dealing with a Personal Loan in Singapore
When used properly, a personal loan can be a reliable and convenient financial tool. Here are some of the dos and don’ts to help you get the best out of personal loans in Singapore.
Ensure You can Comfortably Meet the Monthly Payment
The main reason why banks approve personal loans is that they are convinced that you can afford the monthly payments. Therefore, you need to relook at your budget and factor in the loan repayment so that you do not default. If your budget is tight, consider foregoing some of the unnecessary things and allocate more cash to repay the loan.
Being late with monthly payments can have serious implications on your financial health. For example, it is likely to attract penalties and pull down your credit score. This might compromise your ability to secure credit from financial institutions in future.
Consider Refinancing Your Loan
If your credit rating has improved significantly since the time of application, there is a chance to make some savings through refinancing. Because the credit score is one of the components used to determine the interest rate for a personal loan, refinancing might help you to make some significant savings on monthly payments. In most cases, refinancing does not attract a prepayment fee.
Do Take Action If You Will Miss a Payment
If, for one reason or another, you know that your payment will be late, it is prudent to contact the bank immediately. Most personal loans are marked delinquent when you miss a payment. If this report is forwarded to credit reference agencies, your credit rating is likely to fall.
Do Not Borrow More than You Need
Because a personal loan does not have restrictions on the way you use the money, it is advisable to resist the temptation of borrowing more than you actually need. If you get a larger loan, the interest will be higher and the repayment period longer. The larger monthly payments are likely to restrict the available cash and impact your financial wellbeing.
Don't Give False Information to the Bank
When you provide documents and personal details in addition to your initial loan application, the bank will verify the information. If you are found to have provided false information, the loan is likely to get cancelled.
How to Apply for a Personal Loan in Singapore
Before you can secure a personal loan, you have to start by filling out an application form. This is done online with Lendela, in a fast and simple way. We send your free application to banks and financial institutions in Singapore to make them fight for you as a customer for a personal loan. In order to get the best personal loan in Singapore, here are the main steps to follow:
1. Start by Comparing Personal Loan Options
As you fill out the application for a personal loan, make sure that this type of loan is the one that suits you the best. Do some research on other types of loans to be sure that the personal loan is the best option. For example, you might want to compare personal loans with credit card loans, payday loans, and car loans.
2. Know Your Eligibility
Applying for a loan that you do not qualify for can waste a lot of precious time that could otherwise have been used to do more constructive work. Therefore, if you don’t meet the standard requirements for taking up a personal loan in Singapore, spend some time stabilising your financial situation and once you meet all the criteria, apply.
Banks in Singapore use borrowers’ credit scores to gauge their creditworthiness. This is crucial because banks do not rely on collateral to lower the risk of giving out funds. Generally, you are required to have a credit score of between 1825 and 2000 to qualify for a personal loan in Singapore.
Banks accept applications from borrowers who reside and work in Singapore, and are stably employed or self-employed. This is used to assess your ability to repay the loan, if approved. In some cases, you might find the bank expecting you to have an alternative source of income, such as an investment or retirement benefit. Also, most banks specify that you should be earning at least $1,600 per month to qualify for a personal loan.
Residency and Age
Most banks and financial institutions in Singapore only grant loans to Singapore residents, EP holders, and Permanent Residents. In addition, you will be required to be between 21 and 61 years old to apply for a personal loan in most financial institutions.
Be on the lookout for any other requirements, and provide them for faster personal loan approval.
3. Complete the Personal Loan Application Process
The final process for a personal loan in Singapore might vary slightly from one bank to another. Most banks require borrowers to visit their branch offices for final approval and disbursement of the funds. Right after the Lendela online application, you will be required to provide some documents that will be used in making the decision to approve or reject the loan. Here are some of the documents that you need:
Proof of Income
Proof of income is used to show that you are capable of repaying the personal loan if it is approved. Banks will only approve personal loans that will only take a small percentage of your monthly income. If you are employed, proof of income is done by providing recent payslips and bank statements.
For self-employed applicants, banks will ask for tax return reports for the last two years. Also, you might be required to provide bank statements for the same period.
Proof of Residence
Banks in Singapore will mainly approve personal loan applications for citizens and permanent residents. Therefore, the bank might also require you to provide proof of residence to confirm that you are a resident. If the documents are a requirement, you should provide a recent local utility bill, credit card statement, local bank statement, or telecommunication bill.
4. Wait for Approval Notification
Once you have submitted the application and provided all the required documents in your Lendela account, we will follow up with the selected personal loan provider and schedule an appointment for you at the loan provider's branch. We will notify you when you are all set to go down to the branch for final approval and disbursement. You can also let us know regarding your preferred appointment by talking to our Customer Service Team or by scheduling an appointment on your Lendela account.
The pre-approval stage, also referred to as a provisional approval phase, takes the shortest time and it entails verifying the borrower’s credentials. The application can also be given the term in-principal-approved offer if the bank asks you to provide additional information, such as pay slips. The offers you receive in your Lendela account after your personal loan application is submitted, are all in-principle-approved based on the information you provided in the application.
Before the bank can provide full approval, you will need to be evaluated further to ascertain your creditworthiness. Here is where the document complementation and credit check come in.
The Final Approval Phase
The final personal loan approval stage is provided once you have provided all the required documents and passed the eligibility test. At this point, the bank provides the loan contract with additional details, including the principal, interest rate, and the repayable amount. This happens at the branch of the bank of your selected personal loan offer.
Before you can accept the agreement, it is important to read through all the details carefully and understand them. Particularly, it is important to understand the personal loan interest rate and monthly payments. If there is something that is not clear about the personal loan, get an answer from the bank before signing the loan.
5. The Personal Loan is Disbursed to Your Account
After reading the conditions of the loan and agreeing to its terms and conditions, the bank will be ready to disburse the funds. Unlike the car loan or mortgage where the money is sent to the seller of the asset, the personal loan funds are disbursed to your checking account immediately. If everything goes smoothly, it will take not more than one day for the money to get into your bank account. Go ahead and use the money as you planned.
Unsecured personal loans have become the go-to forms of financing today because people have the freedom to use them as they like. They are also easy to apply and processed pretty fast to allow borrowers to meet their financial obligations more conveniently. Instead of taking more expensive loans such as credit card loans, a personal loan will be a better option. To secure the loan and have it processed in less than two days, you only need to follow the above personal loan guide.