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Introduction To Personal Loans

Whether you are looking to fund your investment secure a business opportunity renovate your home enjoy a dream wedding or set to go for a vacation getting a personal loan can give you and your family the much needed cash to make the most out of life. If you are contemplating to borrow a personal loan then you will find the following information on the introduction to personal loans essential. Personal loans are consumer loans for general purpose and you can use them at your discretion.

Borrowing limits for personal loans

Personal loans can either be secured or unsecured. For secured personal loans you can get a loan of any amount while an unsecured personal loan is pegged on your annual income. Meaning that if your annual income is anything less than $20000 you can get a maximum loan of $3000. Alternatively if your annual income is $20000 but less than $30000 you can get a loan of up to two months income. If your annual income is $30000 but less than $120000 you qualify for a loan of up to four months income. An annual income of $120000 and above qualified you to borrow any amount. However it is essential to exercise lots of caution because lenders may always offer a bigger loan especially if you qualify. It is important to borrow only what you need.

Interest rates for personal loans

There are varying interest rates depending on your annual income. Say if your annual income is less than $30000 the interest rate charged by moneylenders in Singapore will be capped at 13 per cent for a secured loan and 20 per cent for an unsecured loan. This is based on the effective interest rates as calculated from the 1st of June 2012. However if your annual income is $30000 and above the aforementioned interest rates do not apply. In fact the interest rate for income of $30000 and above is subject to an agreement between you and the moneylender. Nonetheless you need to ensure that your moneylender discloses upfront and in writing their Effective

Interest Rate (EIR) of their loan packages

Besides the interest rates personal loans can attract several fees including late principal repayment fees variation of the contract terms fees for dishonoured cheque issued by you and the legal cost incurred for the recovery of the loan. Additionally early redemption or termination of the contract can also attract some fees. Therefore you need to understand this before deciding to borrow cash from the moneylender(s). In addition you need to compare different moneylenders before settling for one in order to get the best terms for your personal loan.

Applying for a personal loan tends to be easier especially if you are making your loan application from a financial institution that you already have an account with. Different moneylenders have different requirements and procedures however there are requirements that are common to all lenders. You need to have a verifiable and stable source of income in order to qualify.

In conclusion applying for a personal loan can be a good source additional funds for your investment plans cater for emergencies and even help you take a vacation. However it is important to have relevant information about the personal loan for which you would like to apply. You should understand the terms of the lender regarding the amount you intend to borrow the interest rate chargeable by the lender and any other additional fees that may be chargeable by the lender. Therefore in order to get the best terms it is crucial to research and compare different lenders. Nonetheless the amount of borrowing and interest chargeable is dependent on your annual income as well as the effective interest rate stipulations as of June 1 2012.