The phrase ‘follies of youth’ has been popularised to describe that stage of life where one is prone to making rash and often irresponsible decisions. True, for some, this may be the case. However, there are also many who strive to make the right choices, especially financially, but unfortunately, have their hands tied behind their back.
One way the youth can help themselves is by getting a loan to achieve their dreams and life goals. Depending on your needs, you can choose from different types of loans offered by licensed moneylenders in Singapore. Before making a decision, you have to understand each type so that you can pick the one that best suits your needs and that you can comfortably repay. Take note that you want a loan that will help you get ahead in life and not oppress you.
The Conventional Loan
In this case, the lending institution has no backing by the government. A conventional loan can be either non-conforming or conforming. If it complies, it follows industry guidelines including a set amount for the maximum loan you can get. This amount varies by location, but it is there. Other directions included here cover things like your credit history and debt in regard to your income.
A non-conforming loan, on the other hand, does not follow any industry guidelines. Some things may coincide, but in most cases, the lender sets their terms. You are likely to get more money from this lender than with the conforming loan.
The Secured Loan
If a loan is secured, your personal property is collateral. By default, the lender gets that property and keeps it if you are unable to pay the loan in the time you agreed. The amount of money you get and the interest attached to it will change depending on how much your property is worth.
In general, the more valuable your leverage is, the higher the possibility of better interest rates and upper loan limits. This type of loan may also consider your credit history. Properties used as collateral include houses, vehicles and saving accounts.
The Unsecured Loan
With this loan, you will need no collateral. The lender will bank on your credit history and information about your income as guarantee that you will pay back. Since the risk for the lender is significant, this loan is likely to be attached to a high interest rate. Go for this loan if your payback plan is solid, your income is guaranteed and you have a good credit score.
The Open-Ended Loan
This loan has a fixed credit limit line. You can borrow from the lender again if you have repaid the first loan. For example, credit cards fall under this category. This loan typically functions like this: a lender approves your request for a certain amount with a loan limit arrived upon based on your income. This amount works as the credit line. Once you borrow and pay back, you can borrow again.
As a young person, getting ahead may be difficult with many economic systems working against you. However, as long as you take the loan wisely, you can use it to gain milestones. The basic principle is to borrow only what you can afford to pay back.