Strategies To Compare Personal Loan Interest Rates
Every person who plans on taking a personal loan always wishes to grab a great deal from the lenders. Since borrowing money always has a cost, the lower the total cost of the loan, the easier it is to pay off the debt. However, it’s not always as easy as it seems to find the proper loan, especially in a busy and complicated place such as Singapore. When choosing a lender from which to borrow money, there are many factors to consider. Borrowers must be aware of the fundamental comparison techniques for the loan’s most crucial feature, interest rates, to ensure that they select the best loan for their circumstances. Following are a few steps that a borrower in Singapore should remember for comparing various interest rates.
1. Get various Quotes from various lenders
Many lenders, such as online-only lenders and regional, big-city, and credit union banks, provide personal loans.
When looking for a loan, it’s crucial to compare different quotes because there can be significant differences between lenders in terms of interest rates, repayment schedules, fees, and the time it takes to finance loans. In order to avoid missing out on a better loan offer, one should try to receive estimates from at least three lenders, but preferably more.
They should select a variety of lenders as well, as online banks frequently have more lenient qualification standards and lower rates than local banks and lenders do due to their lower overhead.
In Singapore, a person can apply for loans in reputed places such as CIMB Bank, DBS, and OCBC Bank. All these banks provide personal loans with various interest rates. The person can also move towards the online platform to apply for loans such as Citi Quick Cash. The online money lenders are open on Sundays.
2. Focus on lenders who permit you to compare loan offers
Sometimes a hard credit inquiry is made into the borrower’s credit report when they seek loans. However, making too many aggressive inquiries damages the credit. Inquiries can remain on a credit record for up to three years. Considering the importance of credit reports in Singapore, it becomes very necessary to keep the credit report clean and trustworthy.
Borrowers can check out the rate and terms for personal loans and be pre-approved through many lenders and online loan comparison tools before a hard inquiry appears on their credit report. After they give the lender their Social Security number and other identifying details, the lender conducts a soft inquiry. This allows the borrowers to subsequently learn what interest rate they are eligible for.
This also applies to exchanging currencies. If you are looking for ‘which money changer has the best rate in Singapore, the Arcade money changers have the best rate in Singapore, along with a wide range of currencies. However, it is advisable to check other lenders who might have different offers.
3. While comparing, make sure the types of terms are similar
When a person applies for loans at various places, they should make sure that they compare similar types of terms (e.g., interest rates). Many advertisements provide true information without mentioning the proper terms, such as the loan duration and interest rate. Hence, anyone can end up comparing unrelated characteristics of two different loans.
The borrower may wind up owing more overall for that loan than they would for a loan with higher monthly payments due to the additional interest they’ll pay if one lender provides lower monthly payments but a longer repayment plan.
4. Analyze the total cost
The annual percentage rate (APR), not merely the interest rate, must be compared when a borrower compares rates. The annual percentage rate (APR), which includes fees, displays the overall rate that must be paid for borrowing the money. Many lenders ask for processing fees that the borrower might not be aware of. For example, UOB Personal Loan has an annual interest rate of 3.4% with zero processing fees. However, DBS Personal Loan offers money at a 3.88% Annual Interest Rate with $100 as a processing fee. Although the characteristics of both loans may vary to some extent, the processing fees can be eliminated by the borrower by analyzing the total cost.
The total amount of interest that must be paid throughout the course of the loan should also be known to the lender. The timing of payments and the frequency of interest compounding will have an impact on this.
A person can select the loan that will cost them the least by being aware of the total payable interest.
Analysis
Different banks and financial lending institutions will offer different interest rates on personal loans, which depend on a lot of factors. Most lenders in Singapore have a processing fee of 1% for a loan amount of SGD 10,000. In terms of secured personal loans, borrowers need to pledge their assets to the lending institution in case they are unable to repay their debt on time.
In the case of unsecured loans, since there are no collaterals involved, such loans are risky, and hence money lenders charge a higher amount of interest rates. The borrower’s credit score is a huge determining factor when it comes to personal loans. The borrower’s credit history determines the amount of money they can borrow and the interest rate that would apply to their loan. Borrowers with low credit scores can be charged a higher interest rate on personal loans.
Borrowers are also recommended to use the Effective Interest Rates (EIR) to compare different interest rates offered by banks and financial lending institutions. Another thing for borrowers to keep in mind is that home loans, education loans, renovation loans, and car loans can have comparatively lower interest rates than personal loans in Singapore. Moneylender open on Sunday means you’ll receive better support. Hence, borrowers should think their choices through before applying for a personal loan.
Conclusion
Now that you have read this guide, you should have a good idea of how to compare personal loan interest rates. By following the tips outlined in this article, you will be able to find the best deal on a personal loan that suits your needs. Remember to shop around and compare multiple offers before making a final decision. Good luck!
Licensed Moneylender 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.