Every second person has a loan or loans. Some people have acquired all their houses and apartments thanks to credits and loans. As you may expect, people who use loans for daily purchases and expenses are not a small part of the society. Although this social behavior has pros and cons, it is still used by many. However, loans are not a new invention. Ancient people have used borrowed money or goods to live, too. Although loans are not new, there are some modern types loans, and we decided to write this brief guide in order to help all of you who have decided to borrow money from a bank or a moneylender.
Banks and moneylenders are two different organizations. Banks are way more regulated by the law than moneylenders, and they are allowed to give you a bigger amount as a loan. So people who need a mortgage loan, have to find a suitable bank and to get it from there. Moneylenders, in contrast, will give you a smaller amount, for a shorter term and for a higher interest rate. However, knowing these differences, it will be easy to explain different kinds of loans, like Bridging loan, Business Loan, Cash Loan and Foreigner Loan. In a business directory, like Loansingapore.sg you can find a lot of reviews of different loans, offered by licensed moneylenders in Singapore.
Bridging loans are also called caveat loans or swing loans. Although they have different names, their function is the same all over the world — they are bridges to bigger financing. So if you are going to have a bigger loan coming or another kind of financing but you need money now and can’t wait till you get them, then you can get a bridging loan. Of course, when you get the permanent financing, you use it to cover or pay back the bridge loan. Bridge loans in Singapore can be given for several weeks or months. People use them to finance their small businesses and personal expenses, both.
Although bridge loans are a different type of business loans, the limit can easily be blurred. Moneylenders in Singapore have a lot of limitations, and they could give only small amounts to their customers. This is the main reason why businesses who are able to get one business loan are not big companies, but small family businesses. Financing your small company with this type of loan is riskier but it is preferred by many because of its nature. A big advantage is that there is a really short period of approval and you can get the money almost immediately. For example, if you have a bar or a club and you expect a big celebration the next day but you don’t have enough money to cover initial expenses then you should check what moneylenders can offer you. Of course, you will pay back the loan as soon as it possible — after several days or a week. The interest rate is higher but you should think of it as the price of the convenience. Because it is convenient to use money that doesn’t belong to you for your expenses.
There are two popular types of cash loans in Singapore — cash advance loans and personal loans. The main difference is the amount of money customer can get. Cash advance loans are limited to $2 000 and people use it to cover some unexpected expenses before taking their salary. For example, if there is a sale of shoes (that you desperately want) and it won’t proceed until your salary date, you need this type of loan. Personal loans are aimed to cover bigger expenses. Their loan term is bigger and you can pay them back up to several months or years. Both of these loans are really easy to get and you can apply faster than applying for a bank loan.
It is suitable for expats or people who just come in Singapore and have a tight budget. Sometimes it is really hard to guess how much money you will need in a new country. Singapore is one of these countries where a lot of people come to work or study. So if you have a valid passport and a full-time job, then you can have foreigner loan. Of course, it comes with a higher interest rate. In addition, you will need a proof of billing, which is needed to prove that you have where to live and payslip for 3 months.
As you may notice, there are plenty ways of getting a loan in Singapore. Having the opportunity to control every expense is something that we should take advantage of.