The choice between secured loans, which require collateral and have higher loan amounts and lower interest rates, and unsecured personal loans, that do not require collateral and are therefore much smaller, depends on your financial health. Doing a self-evaluation by getting a Credit Bureau Singapore (CBS) report and evaluating your financial status can help you make an informed decision. Reach Us Now
Licensed money lenders in Singapore are able to offer unsecured loans to Singaporeans and permanent residents on a case-by-case basis. These loans can be utilised for a wide range of purposes including home renovation, business expansion, and debt consolidation. They also have expedited and streamlined application processes that allow for fast loan disbursements.
How to Apply for an Unsecured Loan in Singapore with EDUdebt
Unsecured loans are popular because they do not require a collateral. However, the lack of security makes these loans more risky for the lender. As such, banks and regulated money lenders carefully evaluate your creditworthiness and borrower history before approving an unsecured loan application. This includes examining your credit score and borrowing history, current employment status and salary, and the capacity to pay off the loan on time.
In addition, regulated financial institutions are required to evaluate the borrower’s Balance-to-Income ratio (BTI) to ensure that borrowers are not overleveraging. BTI is calculated by dividing the amount of an individual’s outstanding interest-bearing unsecured debt by his or her monthly income. In addition, if you default on your unsecured loan, it will negatively affect your credit score and will impact your future loan applications.