Things to Consider When Applying for a Personal Loan and Business Loan in Singapore

Applying for a Personal Loan and Business Loan in Singapore

When it comes to loans, you have made several choices to get the best out of it. Getting a loan is not a simple process. You have to consider various factors before going for a loan.

If you are a start-up owner in Singapore or want business finance, you need to consider various options. You need to watch for the best opportunity.

If you try to get a loan in haste without considering important factors, you might end up paying more money. The interest rate is the biggest factor you need to consider.

Before you sign any loan agreement, you need to read all the terms and conditions. Suppose you don’t understand any clause, research about it, or ask an expert. Don’t fall into a loan trap.

You need to thoroughly understand the loan process, take precautions, and go with the best available opportunity. You need to consider different factors when applying for a personal loan and business loan in Singapore.

Things to Consider Before Applying For a Personal Loan in Singapore:

It is very easy to get a personal loan. Because of this reason, people don’t put any thought before applying for it. But need to beware because this loan takes up more interest than any other loan.

You need to consider all these things before you apply for a personal loan Singapore.

  • Reason for Loan:

You need to use personal loan money wisely. Don’t take the loan just because it is available. You need to take this loan only in emergency cases or urgent funding. You can use the money wisely by investing it in the stock market to get a higher return.

  • Check Interest Rate:

Personal loans have a higher rate of interest. You need to check the banks that offer you this loan at a lower interest rate. The loan also changes as per the amount and risk.

  • Fees and Charges:

There are lots of fees and charges that come with this loan. You need to check these charges and fees beforehand. You need to check the annual fees, late payment fees, and tenure change fees.

  • Borrowing Limit:

You also need to check the borrowing limit with the bank. This type of loan has a low limit and less time period. You also need a good credit score and income statement to get this loan. The amount depends on the income.

  • Funds Acquiring Time:

You can get this loan very quickly as there is less documentation. You can check with the bank the time needed for approval and disbursement of funds—the time changes as per bank. So go with a bank that gives you the loan in lesser time.

  • Lender Behaviour:

Consider the behavior of the lender before applying for a loan. Some banks will harass you to get the money on time. They even use illegal methods for collection. Go with a bank that is trustworthy and avoid such practices.

  • Early Repayment Charges:

If you want to settle the payment before the tenure, you have to pay early repayment fees to the lender. It varies from bank to bank.

  • Credit Card Limit:

If you take the loan and credit card from a common bank, it will affect the limit. The bank will reduce your card limit. Check this thing with the bank.

  • Credit Score: 

This loan can also affect your credit score. Confirm these things with the bank.

  • Monthly payment:

You need to check the amount you have to pay every time to clear the loan. Check how much more you have to pay and then apply for the loan.

Things to Consider Before Applying For a Business Loan in Singapore:

It is one of the most common types of loans in Singapore. If you are running a business, you will need a loan from time to time. You can get a loan for purchasing land, factory, machinery, working capital, etc.

Getting a business loan is much more complicated than taking a personal loan. Because of this, you need to consider certain things before applying for a business loan.

  • Loan Type:

There are many types of business loans available in Singapore. You need to check all the types of loans and match them with your requirements to determine the loan that is perfect for you. Here are the types of loans.

Merchant Cash Advance

Invoice Financing

Unsecured Business Term Loan

Venture Debt Financing

Business Overdraft

  • Application Process:

It is quite difficult to apply for a business loan. It is a complicated process that includes lots of steps. You need to understand this process before going for the loan. You need to consider the ways by which you can apply for the loan.

  • Documents:

The documentation process is quite strict. If you miss any document, they will reject your application. You need to check all the documents. You mostly need five major documents.

ACRA Business Information

2 Years NOA

CBS Report

2 Years Financial Statements

6 Months Bank Statement

  • Types of Institutions:

The next thing you need to consider is the institution; most of the major institutions provide business loans. These institutions provide the loan.



P2P Lenders

Private Lenders

Family Offices

Each institution has different requirements. The interest rate, lending amount, and time differ from one institution to another. So choose the best option.

  • Eligibility:

You need to check if you are eligible for the loan. Check all the criteria and make sure you fulfill them before applying.

  • Rejection Cases:

There are many reasons why your loan application can face rejection. You need to understand all these reasons.

  • Compare Loans:

You need to compare all the business loans in Singapore to get the best opportunity.

  • Loan Amount:

Make sure the institutions provide you the amount of loan you want. It differs as per the institutions.

You need to consider these things before applying for a business loan and a personal loan. If you follow all these things, you can get the best possible loan as per your requirement.