While the holidays are wonderful, they can also be extremely expensive. From new clothes and gifts to travel expenses, holiday parties, and yuletide feasts, everything comes with a price.

You might find yourself among those lacking funds and can’t take advantage of pre-holiday sales and fulfil your holiday plans.

But, there are the best personal loans that you can easily apply to achieve your holiday plans.

You can easily get a personal loan because there are many lenders who are willing to offer you money for your needs. It’s hard to choose which loan deal is right for you. If you’re interested in getting the best personal loan before Christmas, here’s all you need to know.

What is a Personal Loan?

A personal loan is an unsecured loan usually taken out by individuals or households to cover a variety of needs, such as an emergency, debt consolidation, home improvement, wedding, travel, or car repair.

Banks and licensed moneylenders in Singapore offer personal loans. These are usually short-term loans with terms ranging from a few months to five years.

Unlike secured loans, personal loans do not involve any collateral, so if you default on your payments, the lender will not be able to seize your assets.

Why you should take out the best Personal Loan to Cover Your Holiday Expenses?

Taking out a personal loan can ease some of your holiday stress, and here are a few ways to make it happen.

It’s more affordable than other credit options.

As a personal loan has a fixed interest rate, you know how much you will pay every month. This makes it less expensive than other forms of credit such as credit cards or overdrafts.

Get instant cash.

If you need quick money to pay for gifts or travel, most licensed money lenders offer same-day approvals on personal loans.

 You don’t have to worry about paying it off right away.

With most personal loan terms lasting 5 years, you have plenty of time to pay off your loan and enjoy your holidays guilt-free!

There are ways to make payment more affordable.

You can choose to make your payments later in the month, or pay a smaller amount every month. This will help you make sure you can afford your payment every month without putting too much stress on your budget.

How much you can borrow with a Personal Loan for Holiday?

Usually, lenders will ask for your income and credit history when you apply for a personal loan. However, your loan amount will be determined by a few things.

Your request for a loan will be approved if everything checks out.

Second, the type of loan you apply for has a direct impact on the loan amount. For instance, an unsecured personal loan offers a much lower maximum loan quantum than a secured loan. This is because the lender is taking more risks by giving you more money.

For a licensed moneylender, you may refer to the table below on how much you can borrow.

Annual Income Singaporeans/PRForeigners Residing in Singapore
Less than $10,000 $3,000$500
At least $10,000
and less than $20,000
At least $20,000 6x monthly income 6x monthly income

Source: Ministry of Law – Registry of Moneylenders

What to Consider When Getting a Personal Loan for the Holidays?

Periodic repayments

If you have been granted a personal loan, make sure you understand the repayment period. Although most banks offer flexible repayment periods, there are some that will require you to repay them in as little as three months.

Terms and conditions for loans

In return, you’ll pay more in interest if you take out a loan over a longer period of time and pay less each month.

Evaluation of creditworthiness

In order to get approved for a more favourable personal loan deal, lenders will review your credit history.

A document

Even with a good credit history, you may not be approved for the best personal loan if you cannot prove your income, identity, and residence.

Impact on credit score

You should understand how personal loans will affect your credit score so that you can plan ahead if you are not able to make your payments on time.

Read also: How do you improve your credit score?

Tips for Getting the Best Personal Loan in Singapore for Holidays

Before applying for a loan to finance your holiday plans, there are several factors you will need to consider. Here are some helpful tips to help you make the right choice.

Have a definite plan for your holiday spending

You must have a definite plan before taking the loan for the holidays. You must know how much you will need for the holidays. For instance, if you plan on travelling overseas, you may need to list all the expenses involved in your holiday vacation.

Make sure you qualify

Your credit score, your monthly income, and your existing debt are all criteria you must meet before getting the best personal loan.

Before applying for the best personal loan for your holiday expenses, check your eligibility. The amount you can get will be based on these factors.

Find out what loans are available

In Singapore, you can compare personal loan offers once you have verified your eligibility. There are many financial institutions offering personal loans.

You can compare their offerings and select the best one. In this way, you get to choose the best loan for your holiday expenses. There are several ways to compare personal loans in Singapore.

You can compare them based on interest rates, tenure, and processing fees. Before getting a personal loan, make sure the terms are favourable.

If possible, go for a personal loan that has a lower interest rate. You can also consider a long-term loan if you don’t want to pay it off quickly. The longer the loan tenure, the lower the monthly instalments will be.

Choosing a lender

Applying for personal loans in Singapore can be done using one of the best licensed moneylenders in Singapore. Make sure that you will only deal with a licensed moneylender and avoid dealing with a loan shark.

Here are some ways how to identify a licensed moneylender than a loan shark.

With the best personal loan, your holiday plans will become a reality. Make sure you check out the best lenders online.

You may find the best personal loan easily by using MoneyIQ’s personal loan matching platform.

The loan agreement should be reviewed and understood

The loan agreement must be reviewed and understood once you have applied for the loan. All details must be accurate in the loan agreement.

When applying for a personal loan, there are several things you should keep in mind, including the repayment tenure, interest rate, and processing fee.

Choosing the loan tenure is essential. Make sure you choose a tenure that is appropriate for your finances. If you choose a short tenure, you will be required to pay the loan in one go. Getting a loan with a short tenure will be a large financial burden.

Final Thoughts

Make sure you shop around and find a good deal, so you can pay off your loan as soon as possible. Personal loans can be a smart way to get the money you need, especially during the holidays.

The sooner you get a loan, the sooner you’ll be able to pay it off. And, finding the right personal loan is essential for a stress-free Christmas.

However, make sure that you will be able to repay it on time. So, in the future, you can able to get a much higher offer and avoid getting a bad credit history.

Are you searching for the best personal loan offer in Singapore?

Published On: September 22nd, 2023

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