Loans are means of borrowing money to purchase goods and services that is paid by the borrower through a fixed term. Payment made by the borrower includes the interest fees and other finance charges that are applied by the lender for borrowing the money. The loan includes terms that govern the transaction between a lender and a borrower.
Loans are often provided by a financial institution or a licensed money lender singapore but can also come from individuals or businesses looking for ways to grow their money. This act of borrowing and lending helps grow the market with the overall flow of cash in a country’s economy. Below are the major types of loan that are flowing within the market:
- Payday or Cash Advance Loan – This type of loan are often short term loans that are granted to a borrower to address immediate financial concerns. This type of loan often come with high yielding interest rates that can become a concern if the loan is not paid on time. A payday loan singapore or cash advance loan are unsecured loans which backs the reason for high interest rates.
- Personal Loans – Also known as general type of loans. Similar with a payday or cash advance loan, they are unsecured loans that a borrower can use for whatever need they have. Personal loans singapore often have a high yielding interest rates as well. On the other hand, this type of loan is often long term and of high value. It requires a much thorough credit review of the borrower compared to a payday or cash advance loan.
- Business Loan – A business loan is a type of loan that is acquired by an entrepreneur or a business for business operations. It may come as an unsecured or secured loan. Unsecured business loan does not require the borrower to give a collateral while a secured loan is granted otherwise. A collateral may be in the form of property or even a lien on the equity of the business.
- Mortgage Loan – This is a specific type of loan that a lender provides a borrower for the purchase, build or finance of a property. The proceeds cannot be used for any other purchase other than for its intended use. The terms and conditions of this loan is specifically drafted based on the purchase of a property.