What is the definition of a loan?
Loan is an act of borrowing and it is expected to be returned. In financial terms, loan is borrowing sums of money that are tied to a certain timeline to be paid back with interest.
What kinds of loans are available here in Singapore?
Loans can be mainly broken into 2 different categories
1) Secured loans
2) Unsecured Loans
Secured Loans are loans that are taken to get certain things which are called assets. These assets could in turn act as a form of security for the creditors – to repossess it back should the borrower could no longer service their repayments.
Examples of secured loans
• Housing Loans
• Car loans
Examples of unsecured loans
• Personal / Cash Loans
• Credit Cards
• Payday Loans
One major difference between secured and unsecured loans are the interest rates set which are generally higher for the latter.