Credit Card vs. Personal Loan in Singapore – A Comparison

Credit Card vs. Personal Loan in Singapore – A Comparison; In Singapore, both personal loans and credit cards promise speedy cash in their advertising. The interest rate and lending term of a personal loan is fixed. An open-ended lending period with higher and variable interest rates characterizes a credit card. With a fixed interest rate and a fixed loan duration of up to 5 years, a personal loan is a flexible type of loan that a person can obtain while they are experiencing a temporary cash-flow problem. Personal loans are “term loans” that are amortized, which means that throughout the repayment period, the balance of principal and interest adjusts so that the borrower repays the same amount over a predetermined number of months.

The Basics

A personal loan has a predetermined lending amount and the repayment period. If someone has credit card debt, they can consolidate it with a personal loan and pay it back at a significantly reduced interest rate.

“Standby cash” is a credit card. When you withdraw money from it, interest is added.

A person might swiftly acquire a significant sum of money through personal loans. However, many people ask ‘how can i get a personal loan urgently?’.

They are able to apply for a quick cash loan in Singapore and get the money the same day. The instantaneous distribution of funds is the best feature of an urgent cash loan. Applying for the loan should be done at a reputable, authorized money lender.

A credit card is a part of a line of credit. As long as it stays below the credit limit, the withdrawal amount is flexible. It is a “revolving loan,” which means that interest rates add up every day. A credit card is a special kind of line of credit since you can use one without having to pay interest as long as you pay the balance in full each month. The loan duration is open-ended and not fixed, unlike personal loans, and the interest rate may change. A one-time processing cost is required for personal loans, whereas an ongoing annual fee that renews annually is required for lines of credit.

Personal loan vs. Credit card

Following is a comparison between personal loans and credit cards in Singapore

1. Interest rates: Personal loans have fixed interest rates that vary from 3.7% to 4.5%. The interest rate of credit cards is variable and falls under the range of 18.6% p.a. and 20.9% p.a.

2. Loan term: Personal loans can be obtained for a maximum of 7 years, whereas the duration for credit cards is open-ended.

3. Repayment: personal loans are repaid by paying a fixed amount of money every month. The repayment of credit cards ranges from daily to monthly to yearly payments.

4. Processing fees: There is a one-time processing fee that applies to personal loans. Credit cards have annual fees up to $192.60 in some cases.

5. Early repayment penalty: personal loan has an early repayment penalty, whereas credit card doesn’t.

Issues related to Credit Card vs. Personal Loan Choice in Singapore

Two of the most popular ways of borrowing money in Singapore are a line of credit and a personal loan. However, these two also have their own set of differences and issues. While personal loans can provide the borrower with an upfront lump sum of money once their loan application is approved, a line of credit allows for more flexible withdrawals. In regards to a personal loan, the repayments would have a fixed interest rate, which would, of course, depend from lender to lender. On the other hand, credit cards have a credit limit on them, and there are no fixed repayments in this case. In the case of a line of credit, the interest rate is charged on only the amount of money withdrawn. The loan term for a personal loan can be between 1 to 7 years, depending on both the loan amount and the repayment capability of the borrower. However, the line of credit doesn’t have a fixed loan term. The funds are available to the borrower as and when they repay the amount they withdrew, along with the interest rate applicable. Another factor is that while personal loans only charge processing fees from their applicants, lines of credit charge annual service fees from their customers.

Which Personal loan to get in Singapore ?

Mentioned below are some of the best personal loans available in Singapore.

1. Standard chartered CashOne: This loan has an interest rate of 3.88% (7.63% annually). A rebate incentive that offers 50% off your first month’s installment is also available.

2. Citi Quick Cash: They have an interest rate of 3.45% with 0 processing fees.

3. UOB Personal Loan: UOB has an interest rate of 3.4%. According to various offers that they offer, the borrower can receive immediate cash incentives upon applying.

Which credit card to get Singapore?

The following are the best credit cards available in Singapore.

1. Standard Chartered Smart Credit Card: They provide 6% cashback from Netflix, Spotify, and fast food joints along with 0% interest for a 3-month EasyPay with no processing fees. Reward points are awarded on every installment.

2. Citi Cash Back Card: they provide up to 8% cash back on dining, groceries, and petrol. S$80 cashback is provided per category per month. It provides up to 20.88% savings.

3. CIMB World Mastercard: it provides up to 2% unlimited cashback on various spendings. The minimum spending per month for this card is S$0.

Conclusion

Credit cards and personal loans are both popular methods of borrowing money in Singapore. If you can manage the money and be consistent about repayment and need some bulk money once in a while, you may want to re-evaluate your repayment capacity and consider credit cards. If you want more than the credit limit you have been offered and if you believe it’s something you will not be able to manage with the cash you have or can possibly save within the next couple of months, a personal loan could be an option. Personal loans tend to have lower interest rates than credit cards, making them a better choice if you need to borrow a large amount of money. However, credit cards offer more flexible repayment terms and can be a good option if you only need to borrow a small amount of money. Ultimately, the best choice depends on your individual financial situation.

Licensed Moneylender in Bugis– Singa Credit Pte Ltd

Established in 1992 and previously known as Yong Seng Credit,
Singa Credit Pte Ltd is Licensed Moneylender in Bugis regularly updated with the latest regulations to be in line with the requirements set out by Registry of Moneylenders.

Please feel free to call 66946166 for more info on our lowest interest rate in Singapore or walk in our office 470 North Bridge Road #02-01 Bugis Cube Singapore 188735.