We will approach its definition, some of its characteristics, as well as certain particularities and other financing alternatives.
In this blog we will try to explain all the details to take into account when a personal loan singapore is contracted . On many occasions we request loans with less information than we should have and with some urgency, situations that are not recommended to negotiate in the best way.
In this blog we will try to publish the best offers on the market and how a personal loan singapore should be negotiated .
To begin with, we will define in a simple way what is a personal loan singapore , which is nothing more or less than a banking product that allows the client or borrower to receive a certain amount of money (the so-called loan capital). a credit institution (lender), in exchange for the commitment to return said amount , together with the corresponding interest, through periodic payments (the so-called installments).
They are called personal because in this type of loans the entity does not usually have a special guarantee for the recovery of the borrowed amount. Thus, the current and future assets of the debtor have a generic guarantee.
Its characteristics are quite defined and leave no room for doubt.
Loans with personal guarantees are normally used to purchase consumer goods and services: a car, a computer, furnish the house, go on vacation, study abroad.
They are not usually high . In addition, the client responds of the fulfillment of his obligations (return of the loaned amount and payment of interests and bank commissions) with all his assets, both present and future. For this reason, it is normal that before giving the loan, the credit institution studies its ability to pay , requesting proof of its income (payroll, rental income …), an inventory of its assets or a sworn statement of its assets.
The client does not usually commit any particular property in particular (for example, a home, as in mortgage loans), so the processing of this type of loan is usually faster than that corresponding to mortgage loans. However, they tend to have a higher interest rate , that is, they are more expensive .
Among personal loan singapore, there is a category that has a special regulation: the so-called consumer loans, regulated by Law 16/2011, of June 24, of consumer credit agreements.
This Law applies to contracts in which a natural or legal person in the exercise of its commercial activity, profession or trade, grants or undertakes to grant a consumer a credit in the form of deferred payment , loan, opening of credit or any equivalent means of financing, to meet personal needs regardless of their business or professional activity and whose amount amounts to at least 200 euros.
The special protection to consumers established in this standard focuses on the information and actions prior to the conclusion of the credit agreement, on information to consumers, on the content, form and nullity of contracts, the right of withdrawal and in the determination of concepts, such as the total cost of credit and the annual equivalent rate , defining the cases in which the total cost of the credit can be modified and collecting the conditions to which the modification agreement must conform.
With regard to contracts entered into by consumers that expressly establish their link to obtaining a financing loan, it is stipulated that the failure to obtain the loan will result in the ineffectiveness of the contract, leaving the exercising rights safe. by the consumer, both against the supplier of the goods or services and against the employer who had granted the credit.
In this way we find:
Rights in linked contracts :
This Law establishes that the consumer who has obtained a credit for consumption, has the same rights as the credit entity or employer that granted it, the same rights that it would have against the supplier of the goods and services acquired with the money of said credit, always that the following conditions are met:
That the goods or services have not been delivered in whole or in part or are not in accordance with the agreement.
That the consumer certifies that he has claimed before the courts or outside of them against the supplier and has not obtained satisfaction.
Right to request the ineffectiveness of the credit agreement:
The Law also states that the ineffectiveness of the contract for the acquisition of goods and services -that is, the resolution of said contract declared by the courts, because the supplier has failed to do so- will also determine the ineffectiveness of the consumer credit agreement that financed it. therefore the resolution of said contract.
There are other valid forms of financing if you decide not to resort to this type of loan that can be adjusted more to your needs.
Leasing is a series of operations normally offered by credit institutions in which the entity cedes to the client during a determined period in advance the use of movable or immovable property that it has purchased expressly for that purpose, in exchange for which the client pays certain monthly installments (part of which is the one corresponding to the amortization of the property sold and the other the financial cost). The financial leasing contract will necessarily include a purchase option, at its end, in favor of the client whose amount is determined from the formalization of the contract and, if the client exercises it, paying the amount will obtain ownership of the property. The leasing becomes aren’t with option to purchase at the end of the contract.
This type of financing is usually used by entrepreneurs and professionals because of the tax advantages it has for them, but nothing prevents it from being so for any consumer.
In addition, there is the so-called renting, which comes to be a lease but with no purchase option , that is, a rent. In this way, it could not be considered a financial product, although it is also offered by many credit institutions. As leasing is a product more aimed at businessmen and professionals than consumers .