Types of Personal Loans
Many Singaporeans nowadays are struggling with financial problems.
Personal loans are usually applied for by people seeking methods to solve debts or buy the item of their dreams. There are two types of personal loans – namely ‘secured’ and ‘unsecured’ loans. Unsecured personal loan is provided and supported just by the borrower’s credit reliability, as opposed to by a type of collateral. It is one that is acquired without the use of residential property as security for the loan. Customers usually should have high credit rankings to be accepted for an unsecured personal loan.
Secured personal loans are backed by properties concerning the customer in order to lower the risk presumed by the lender. The properties may be forfeited to the lending institution if the debtor fails to make the needed payments.
For bad credit personal loans, it is easier for the bank to approve your loan under secured personal loans as it requires collateral pledged to the bank and the bank has reduced risk of you not repaying the loan. If that happens, they would be able to take over the collateral that you have pledged upon taking the loan. However, for someone with bad credit ratings, they may be required to pay higher interest rates than others who have good credit ratings. For unsecured personal loans, as it does not require any collateral from you and it depends on good credit history, the banks will be reluctant to approve your loan as they do not want to take any risk.
Lastly, the terms being offered to people with bad credit history may be less attractive than those with good credit history. Most of the private creditors, similarly to banks, do not deal with bad credit personal loans other that second mortgage. Other organizations prefer dealing in secured personal loans as it has reduced risk for them due to the collateral pledged to them when the loan is being negotiated before it gets approved. Private creditor companies that deal with bad credit personal loans can be found in local newspapers and increasingly, online, as a result of recent findings. Due to an abundance of private creditor companies going online recently, it is most advisable to people who have bad credit looking for personal loans, to shop around and compare the interest rates set by different companies and the repayment method.
You will be able to find many online sites that allow you to request for a bad credit loan rate
quote from various creditors at once. Shortly after submitting the request for a loan quote, you will be contacted by the representatives from the various private creditor companies and from there, you would be able to receive different quotations and ideas as to what each company can offer, in terms of interest and other finance fees and charges. Just keep in mind to select the loan that is suited best to your needs and you will have no problem in taking a loan even with a bad credit history.
Personal loans help to tide you over during tight financial circumstances, now you can find one with our comprehensive list of licensed money lenders in Singapore.