Would Another Type of Loan Cost Less?
There is definitely a reason we have renovation loans, car loans and other types of loans. It is true that you could go a personal loan to do all this and several other things. But you have to bear in mind that specific loans come with lower interest rates and will obviously have more benefits than a personal loan. For instance, if you have already taken home from a bank, the same bank might offer you an interest-free loan to do renovations in your house which makes it cheaper. If you have your own businesses, it is not wise to take a personal loan to finance. I am aware that credit officers will ask you more questions when taking business loans but in the long run, they come with lesser interest rates compared to a personal rate.
Am I investing the money?
Have you decided to take a personal loan in order to buy gold, stocks, or invest it? If so, I would advise you to try safer activities like wrestling bears and chainsaw juggling since they are less dangerous.
It is very important to be aware that most personal loans cannot raise capital. You will just be leveraging your financial future. There are very few investments that appreciate faster than personal loans whose interest rates are normally around 6 percent per annual. Even if getting a personal loan to invest will not leave you broke, you will certainly incur losses. It is best to go for specific loans such as business loans.
Will I Be Over-Leveraged for Other Loans?
It is also advisable not to get a personal loan if you are contemplating on getting a bigger loan within a period of 3 months. For instance, take a home loan. Let’s assume that you have decided to buy yourself a house in the next 3 months and you have not yet secured a home loan. You will be required to pay a 20 percent down payment which will not be covered by the home loan. So you decide to get a personal loan in order to pay for the 20 percent down payment.
After you have secured the home loan, you go ahead and apply for a home loan. The bank is going to check for your debt serving ratio and if it exceeds 50 percent no bank is going to give you a home loan.
Do Other Banks Offer Better Rates / Benefits?
As I began by saying, banks offer different interest rates and benefits for various loans. For instance, some banks will offer fewer interest rates for their existing customers or even interest-free months. In order to be on the safe side, sample a variety of banks and compare what they have to offer.
There are Licensed Moneylender across Singapore to provide others loan. Usually, they offer personal loan, debt consolidation loan, wedding loan and so on. As the Best Licensed Moneylender Directory, we will be able to provide you with sound advice.