Type of loans available in the financial market today is many and classified into various categories depending on the loan requirement. I will just try and discuss with you some of the more common loan types that are usually availed by most individuals and businesses here in Asia.
Singapore has been known to have one of the most active and well-developed economies in Southeast Asia, and this is perhaps the reason why its population is very active in applying for monetary assistance when it comes to financing purchases of properties, cars and other important necessities such as appliances, and other comforts in life. It’s quite common for its citizenry to apply for various kinds of loans and this has become a normal day to day activity between Singaporeans and money lending institutions here. Personal, car, home, Payday, business and surprisingly foreigner loans are some of the most common types of loans being applied for in this country.
- A personal loan is perhaps the most common among the six loans being availed by most individuals here in Singapore. Because borrowers don’t need to specify where he’s going to use the money for, the financial assistance is also referred to as a multi-purpose loan. The money involved in this transaction is normally small but there are cases wherein large sums are involved, but this is more of an exception to the rule and will depend entirely on the agreement between the lender and the borrower.
- Being a multi-purpose loan, the money is commonly used to add to the borrower’s money to buy a car or to purchase appliances, electronic devices, or to cover other small to medium scale expenses. The cash borrowed from this loan can be as much as four months of the borrower’s monthly income and the interest rate is usually fixed. Repayment options are usually short-term and the amount of amortization paid each month is fixed.
- The payday loan is a new type of financial assistance and allows the lending of the small amount of money. The interest rate for the loan is unusually high and needs to be paid within thirty days.
- Business loans are usually provided to various types of trades such as corporations or individual businesses. The assistance is usually used to solve business cash flow problems. Repayment terms and interest usually varies for this type of loan.
- A foreigner loan, on the other hand, is provided to expats and legal foreign workers in Singapore. Normally the loan needs to be secured with collateral but the approval of the loan is usually fast and carries a very low-interest rate.