High Risk Personal Loans are provided to those with a bad credit history. It usually comes out with higher interest rates. At times, people may come across a situation, where they need money urgently. In such cases, high risk personal loans could be the only way out. In Singapore there a quite a few banks who offer high risk personal loans to people who have default payments and a bad credit score. Here, we will go about the pros and cons of high risk personal loans in detail:

PROS AND CONS OF HIGH RISK PERSONAL LOANS

Pros of High Risk Personal Loans

High risk personal loans offer many benefits. Here are some of the important ones.

1. Available for Anyone

The biggest advantage of unsecured loans is they make it possible for anyone to get cash based on their financial responsibilities in times of an emergency. Whether you’re a tenant or a homeowner, you can borrow money without putting up any collateral.

2. No Risk to your Property

For those who own a house or any property and not interested to risk it, an unsecured loan is the solution since it doesn’t directly pose a risk to it or to your assets.

3. Fast Processing

Unsecured loans are usually in small amounts, so the loan completion is much quicker compared to the secured loans. The loan application can be processed within 2-3 working days and as soon as the application is processed the money will be credited to your specific bank account.

Cons of High Risk Personal Loans

Despite of the apparent benefits, high risk personal loans do have a fair share of drawbacks. Prominent amongst them are as follows.

1. High Interest Rates

The biggest drawback of a high risk personal loan is that they charge high interest rates for your loan and so your overall cost of borrowing will be very high as well. Borrowers with bad credit will face higher interest rates on an unsecured bad credit loan.

2. Limited Loan amounts

If you need to borrow a substantial sum of money, an unsecured loan is not the solution for you; unsecured loans are given in small amounts.

3. Lack of Flexibility

Most lenders don’t allow partial payment of loans. This means you will end up paying the entire tenure of the loan which is quite expensive. Also, if you wish to pay off the loan sooner, you will face an early repayment fine.

Compare the Personal Loan Interest Rates in Singapore

Almost all banks in Singapore offer personal loans and you could even try checking out with financial comparison websites. They allow you to compare financial loan products from different banks based on criteria like monthly interest rate, annual interest rate, maximum loan amount based on the salary, maximum repayment tenor, administration fees etc. The interest rates and repayment amount vary from bank to bank and from account product to product, ranging from ludicrous to the fairly reasonable.

Compare and see which bank offer personal loans with best interest rates in the market based on your needs and requirements.

Think carefully before applying for a loan and avoid over-borrowing. Remember to repay on time after taking out a loan to avoid additional expenses on finance charges.