There will always be a time when we are tight on budget or badly need something but don’t have enough money to pay for it. People apply for a loan from a debt solution in Singapore to make enough room to move financially.
A loan is a sum of money lent to an individual or group of people. This sum of money is bound for future repayment with or without interest. People loan cash from financial institutions such as money lenders and banks with help from a debt consultant. They can also borrow money informally from family and friends.
4 Different Types Of Loans And Their Purposes
We spend our money for different purposes. We splurge on our daily needs, such as food and shelter; we pay for our education, and we spend our leisure activities.
Similarly, loans are spent in certain and quite restricted ways depending on their types. Some are for education, while others are for vehicles, and usually, a debt consultancy service will help you which type of loan you can get.
Here are the most common types of loans:
1. Business Loan
A business loan is a sum of borrowed money to be spent on business-related expenditures.
Companies and entrepreneurs apply for business loans to start businesses, expand operations, open new branches, and hire new people.
The number of debt companies and entrepreneurs can get depends on the size of their business. Micro, small, and medium enterprises get smaller business loans than corporate giants. But they can tap a debt consultancy service to score bigger loans.
● Business expansion
Business expansion can be opening a new branch in other areas, upgrading machines relevant to the operations, purchasing new assets, such as vehicles and properties, and increasing staff size.
Besides replenishing the inventory on a weekly or monthly basis, some retailers need to stock more supplies than usual during peak seasons. Sometimes, retailers don’t have money to buy extra supplies. You can ask your debt consultancy service regarding this.
● Improve credit history
For micro, small, and medium enterprises to become eligible for bigger loans, they should improve their credit score with smaller business loans. You can ask a debt consultant regarding this.
WHERE CAN YOU GET BUSINESS LOANS?
● Large banks
Large banks are widely known retail banks.
● Challenger banks
Challenger banks are small and new banks.
Moneylenders are small private financial institutions that are not as safe as banks. They can also be a friend or relative.
2. Auto Loans
An auto loan or car financing is borrowed money used to buy a car.
The process of car financing is quite different from a business loan. Instead of giving the borrower the money they loaned, the financial institution will pay the car dealer for the vehicle.
On the other hand, the borrower will repay the financial institution according to the agreed arrangement. Although the borrower can drive the car they bought, the financial institution makes them as collateral. It means that if the borrower fails to repay the loan, the financial institution can take the vehicle.
You can ask your debt solution services in Singapore for more institutions about auto loans.
● Vehicle purchase
People get car loans to buy new or second-hand cars.
WHERE CAN YOU GET AUTO LOANS?
Some banks have auto loan offerings for people. You can check them out with the help of a debt consultant.
● Car dealership
You can also get car financing from the place where you bought your car. You can’t apply for an auto loan from the owner of the used car you just bought.
● Car financing institutions
There are financial institutions that only offer auto loans and car financing. You can learn more about them from your debt consultant.
A personal loan is borrowed money you can spend on anything and everything.
A personal loan is an unsecured loan, meaning it does not have collateral, unlike your auto loan. The amount of money you can borrow depends on your credit history and ability to pay.
You can ask your debt consultancy service about personal loans.
● Home renovation
People apply for a personal loan to renovate their homes or build a home expansion.
People also get personal loans to pay for their hospital bills, surgery, therapies, and medication.
They also use a personal loan for funerals. You can learn more about this from your debt consultant.
Enormous events, such as birthdays and weddings, need a lot of money to execute. Personal loans can be used for these events.
People use personal loans to fund their domestic or overseas vacations.
● Daily expenses
You can also use a personal loan to buy food and pay for your housing, electricity, and water. You can learn more about this from your debt consultant.
WHERE CAN YOU GET PERSONAL LOANS?
You can apply for personal loans in banks.
You can apply for personal loans in moneylenders. You can also get it from friends or family.
Debt Consolidation Loan
A debt loan consolidation is borrowed money used for paying other outstanding loans.
Loan consolidation in Singapore works quite differently from other forms of loans. Its aim is to streamline your debt payments.
For example, you have outstanding business, auto, and personal loans. You have a business loan worth SGD 100,000 and an auto loan worth SGD 500,000. On the other hand, your personal loan is SGD 100,000. Your total outstanding loan is SGD 700,000.
You can apply for loan consolidation in Singapore worth SGD 700,000 to pay for all your existing loans. Once you have finished paying for your business, car, and personal loans, you will start paying for your debt consolidation.
The advantage of a debt consolidation loan is you pay your debt in one financial institution instead of three separate institutions (business loan bank, car dealership, and personal loan bank).
● Repayment of other loans
You can use loan consolidation in Singapore to pay for your business, home, car, student loans and credit cards.
WHERE CAN YOU GET DEBT CONSOLIDATION LOANS?
You can get loan consolidation from Singapore banks.
You can get loan consolidation from Singapore moneylenders.
Which of these loans do you need? You need a debt consultant to identify the right one.
Debt Aid is one of the best debt solution services in Singapore. Visit Debt Aid.