When unforeseen expenses or events crop up, personal loans can be an invaluable source of funding. These unsecured consumer loans, usually issued by banks or authorised money lenders, are used for a short- or medium-term period (a few months to a few years) and are typically repaid in monthly instalments. They can be used to meet many objectives, from tackling significant home renovations or planning a wedding to paying off overdue credit card debts and meeting unexpected medical bills.

However, it is important for borrowers to understand how these loans work before submitting an application. Whether they are looking for personal loans from banks or licensed money lenders, it is critical that they compare rates and terms before selecting the right loan package to suit their needs.

Aside from ensuring that their eligibility requirements are met, borrowers should also consider the loan tenure and amount they can afford to repay. For example, a longer loan term will increase the total cost of their borrowing as they have to pay interest for a longer duration.

Moreover, it is essential for borrowers to look into the lender’s fees and charges before submitting an application. For instance, some lenders charge a flat fee for every year of the loan and this can add up to a significant sum over time.

Fortunately, there are fintech companies that specialise in providing personal loans to individuals with lower incomes. Lendela, for example, is a loan matching platform that tailors personal loans from various MAS-regulated banks and financial institutions in Singapore, which often have lower eligibility requirements compared to traditional bank loans. personal loan singapore