A personal loan is an amount of money that an individual take from banks or other financial firms to address financial needs. In doing so, the borrower has a financial responsibility, which has to be repaid with interest and within a given set of time.
The borrower and the lender must agree on the terms and conditions of the loan before any amount changes hands. In some situations, the lender asks the borrower to offer collateral. However, with personal loan, you can borrow without collateral from one of the best money lender Singapore.
A personal loan is a type of unsecured loan offered by licensed moneylenders and banks. However, you can find an instant loan option with online money lender Singapore.
Personal loan is offered to by various financial institution to address your financial needs. And, you may be asking if you can get a loan even with low income. Let’s find out!
Types of Loans which can approved with low income:
Loans can be explained into three types: secured and unsecured, open-end and closed-end, and conventional.
- Secured and Unsecured Loans
Some form of guarantee needs a secured loan. For example, most financial companies need borrowers to show their title activities or other documents showing ownership of a property until they ultimately pay back the loans. Other assets that can be put up as insurance are stocks and land property. Most people ask for secured loans when they want to take a large amount of money. Since granters are not typically willing to lend large amounts of money without collateral, they hold the recipients’ assets as a form of guarantee.
- Open-End and Closed-End Loans
A loan can also be explained as closed-end or open-end. With an open-ended loan, an individual has the independence to take it again and again. Credit cards and lines of credit are detailed examples of open-ended loans; despite that fact, they both have credit limitations. A credit limit is the most significant amount of money that one can borrow at any point in time.
- Conventional Loans
The term is mainly used when requesting a contract. It refers to a loan that is not assured by government firms.
Few things to keep in mind before asking for a Loan with low income:
For individuals thinking to apply for a personal loan, there are some things they should first look into:
- Credit Score and Credit History
If an individual has an excellent credit score and history, it shows the granter that he’s capable of making pay back on time. So, the greater the credit score, the higher the likelihood of getting approved for a loan. With a good credit score, a person also has a better chance of receiving favourable terms.
- Income
Before requesting any type of loan, another feature that an individual should assess is his/her income. For a worker, they must have a stable income. However, if the candidate is self-employed, he must provide his tax return for the past two or more years and a statement where applicable.
- The interest rate
One of the top and expected things to look at while seeking a loan in Singapore. At first, know about it very clearly, research it, or someone expert to get full clarification on it. Otherwise, you may have to face so many problems in the future.
Conclusion:
If you have low income, you still have chances to get a loan from licensed moneylender. However, a personal loan is much harder to get if you have low income. To have a better loan offer it is important to maintain a good credit score and find a stable job.