We all know to carefully research interest rates from several lenders when looking for a personal loan. What else do you need to be cautious of? We’ll delve deeply into the topic of personal loans in this post to assist you in choosing the finest loan for your requirements as well as the safety measures you need to take. For more information about easy access to finance you can avail yourself of knowledge from this link https://creditempire.sg/. Here are the main factors to take into account when applying for a personal loan:
- Use your money wisely
Although a personal loan can be used in any way you like, you shouldn’t take this freedom for granted. What should you do with the money from a personal loan then? The wisest course of action is to pay off expensive debt. Unexpected medical costs, money problems, and home improvements are among more justifications for taking out a personal loan.
- Rate of Interest
You will undoubtedly run into these two phrases. AR ignores the fact that each repayment lowers the principal amount by a certain amount, assuming the loan principal would remain constant throughout the loan term. If your payments are made on time, EIR accurately depicts the cost of borrowing.
- Understand the costs and fees
When applying for a personal loan, the interest rate shouldn’t be your only concern. There are additional fees, some of which you should be aware of:
- Monthly costs: Some banks charge an annual fixed fee in addition to the statutory interest.
- Late payment fees: If you pay less than the agreed-upon amount by the deadline or miss any payments, you will be assessed a late payment fee.
- Reduction in tenure fee: This flexibility is not provided by all banks. For instance, let’s say you successfully filed for a personal loan with a two-year payback period, but owing to a change in circumstances, the monthly payment has grown to be too much for you to afford.
- Amount to Borrow
Banks take your relationship with the bank, your credit score, and most significantly, your monthly income, into account when determining your borrowing limit. This is how it goes. An individual may be permitted to borrow up to four times their monthly income if they meet the minimum income criterion.
Therefore these are the topmost factors that you must consider before availing of a personal loan in Singapore.