5 Extremely Important Things You Absolutely Must Know Before Taking a Term Loan in Singapore
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Otherwise known as a Home Equity Loan, A Term Loan refers to using your property as a security or a collateral for the loan
Whether it’s a Home Equity Loan, Term Loan, Home Term Loan, they all mean the same thing. Term loans are designed to ensure that you have a lower interest rate and you are able to repay the moneylender or the bank.
This would dramatically reduce the interest rate of your loan since your home is being used as a security or a collateral.
What would make you eligible for a home equity loan?
As the name sounds, you obviously must own a home. Particularly, a private property. Unfortunately, HDB home owners are unable to be eligible for a home equity loan. Executive condominium owners have to wait for their 5-year Minimum Occupation Period to be up before they can be eligible for a term loan.
The interest rate for a term loan
The interest rate for a term loan is extremely low. It could be anywhere between 1% all the way to 3%. This also largely depends on the amount that you intend to borrow for the loan as well.
The amount you can borrow on a term loan in Singapore
The short answer is that you can borrow up to 80% of your property value. In several instances, you might not be able to borrow 80% of your property value since you likely will already have an outstanding home loan. Your best bet is to click on the button below to speak with a qualified Customer Success Manager in order to check the amount that you qualify for.
The maximum loan tenure for a home equity loan in Singapore
The maximum loan tenure could be up to 54 years.
However, it also depends on your age.
The formula is as follows: Use 75 years of age minus your current age.
That would give you the maximum loan tenure for a term loan.
Frequently Asked Questions About Term Loans in Singapore
A term loan is a loan where you use your property as a security/collateral in order to obtain a loan.
Not necessarily. A mortgage loan generally has a maximum term, which is the number of years the loan needs to be repaid. On the other hand, a term loan might not have a maximum term.
A term loan ensures that you have the lowest interest rate possible by using your property as a security or collateral, to give the lender a peace of mind. Interest rates could go as low as 0.88% to 3%.
If you want to free up cash flow to perform other activities, a term loan is an amazing option.