finance

Borrowing money by applying for a bank loan or any other type of loans is a very serious move. Filing for a loan application will surely have a tremendous impact and would probably alter your usual management of your finances.

You would always think first is how to get a loan but, it is therefore necessary to initially ask yourself whether you really need the loan or not. If the answer is in the affirmative then you should be ready to face all of the consequences of being in debt for several months or even years depending on the amount of money you want to borrow.

It is quite common that most people are much uninformed when it comes to borrowing money from an external source. So the first thing that borrower must learn is to understand what a loan is and how it will impact our financial status once the loan is approved and released to us.

For instance, if you had applied for sizable amount of business loans, it is necessary to study first the capacity to pay of the business once the loan is released. If you are the businessman involved in the loan, then you would have to seriously study whether the company’s income will able to handle several months or years of large amount of amortization.

When borrowing money, it is important to know what type of loans exists in the market today. This is to make sure that you are applying for the right loan for you or your business.

Remember that the only thing identical among financial loans is the fact that it would provide monetary consideration to the borrower. The procedures, processing, interest rate, finance charges and other factors will surely differ from one another. For example, a business loan is different from a car loan or a personal loan can either be secured unsecured or can be a type of flexible loan.

In short no two types of loan are alike so it is important that you fully understand the various types of loans and their functions. When finally deciding to take out a financial loan make sure you know the type of loan you need to get and learn all you can about it.

If the amount of loan is quite sizable and would entail for you to pay a large amount of amortization for it, it would be wise to talk to a financial analyst and perhaps a lawyer to know the dos and don’ts of borrowing large amount of money. It is also advise you get a bank account when going to this route. You can find out more guide on ibanking using this OCBC ibanking guide.

One of the first things that you should be aware of when applying for a large sum of money is how the interest of the loan will be calculated. Also the length of time you’re supposed to repay the debt should also be a serious issue. The reason for this is that getting a good interest rate and short repayment terms are the keys to getting a good deal on a loan. These are just some of the basic things you should consider when applying for a financial assistance from any of the loan company that exist in the market today.

There is an affordable type of financial loan that is being offered in the market today and this type of loan is referred to as payday loan.

Payday loan is a short-term loan whose amount usually ranges from 100 to 1000 dollars. This type of loans normally have three distinct features namely that the loan amount is relatively small, full payment is usually due on the borrowers next payday and borrowers are obliged to give the lender or lending company access to his or her checking or ATM Account or in some instances require the borrower to provide the lender a postdated check for the full amount of the loan plus interest and finance charge.

Quick cash loan or payday loans can also be categorized as short term small loan and although the loan has basically three features, lenders or the lending company can include a variation of the loan like including an interest-only payment, lump sum payment and/or loan renewal of the loan.

The cost of the payday loan (basically known as “finance charge”) may range 10 to 30% for every 100 dollars depending on the loan policies of the lending party. However there exist laws that limit the interest rate and financing fees lenders are allowed to place on payday loans.

Small lending entities such as pawnshops and other retail outlet are the normal source of payday loans. The loan amount is immediately issued to the borrower upon applying from the outlet.

There is no extensive credit or background check on the borrower and it is only the loan contract that the borrower have to sign that will indicate that the borrower must repay the loan in full once he or she has received his or her next paycheck. It is therefore necessary for a person to have a steady job to be able to apply for a payday loan. The drawbacks of a payday loan are the more than normal interest rate and high financing fees.

The usual guarantee that the payday loans will be re-paid is the borrower’s obligation to issue a postdated check to the lender (upon receiving the cash loan) which includes the principal amount, finance charge, interest amount and other incidental fees of the loan. As soon as the payment due date arrives, the borrower is expected to go back to the payday loan outlet and pay in cash the total amount due on the cash loan online.

The lender in turn will return the postdated check earlier issued to him but in the event that the borrower does not arrive at the appointed time, the lender has the right to cash or deposit the postdated check. There will be additional surcharges and a possible lawsuit in the event that the postdated check issued to lender bounces.

Payday loan is also a type of personal loan but with a much higher risk and to lessen this risk, payday lenders require the borrower to show proof of steady income and this usually comes in form of a multiple payment stub, business license (if the borrower is a businessman) or employment certification from the borrowers employer.

personal loans

With the continuing rise in the cost of goods, services and other necessities needed to get us by in our day to day activities, it is no wonder why many individuals are forced to look for other ways and means to obtain a little more extra cash. Some would take a second job, sell valuables or in extreme cases, apply for a second mortgage loan on their property. For others, if the needed expense do not require a large sum of money, applying for a personal loan would be the best alternative.

Personal loans are perhaps the most accessible loan that you can apply for from any loan company like banks and other S’pore money lender institutions.

Personal loans are usually availed to cover any kind of expense such as paying off credit cards, debt consolidation, education expenses, home renovation, car financing, small business needs, wedding expenses and any other expenses that may requires  sizable amount of money.

But you most people might be wondering on how to get a loan?

Generally, there are two types of personal loans namely secured and unsecured. Secured loans are usually the preferred type because of the much lower interest it entails. However, the reason it is called a secured loan is because it a type of loans that require some form of collateral which in most cases need to be of the same value with the loan amount you are applying for. If you default on the loan, there can be no alternative but for you to surrender the collateral to the lender or lending institution.

Unsecured loan also known as “signature loan” or character loan is basically a loan that will be provided for you by the bank or other lending companies without the benefit of collateral. The drawback to this type of loan is its interest rate which is unusually higher than normal.

After deciding whether to finally get a personal loan, the next thing to do is find the best financial agency to file for a financial loan.

Banks and credit union should be first on your list primarily because these are the institutions that are most friendly to loan applicant and their interest rate are the most competitive in the financial market.

Also, it is not uncommon for individuals to file a financial loan with the bank that they have been having a great deal of business with. As a matter of fact these are the type of borrowers that can easily get an unsecured loan simply because the borrowers are already known to the bank.

Here are some lending tips or things to watch out for when taking out a personal loan from a bank or any other financial institutions.

First and foremost is to never disregard but rather give importance to the fine prints stipulated on the loan agreement because you just might end up that you have signed to an agreement that is very one-sided and very much in favor for the lender.

Things to look out for is first, it should be stipulated in the agreement that there should be no prepayment fees, second, make sure that there are no automatic withdrawals from any of your bank account, and finally make sure that the lending company you are dealing with is legit and above board.

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