Loans and borrowing money

No matter how much we think we can do without loans, we're wrong (Well, unless you're from a rich family). Everything needs loans, from the HDB apartment that you're buying to that next Ford convertible you're eyeing on.

I only know of two types of loans, one is secured loans and the other, personal loans. Yes they do sound similar, but the concepts are slightly different.

Secured loans are those which uses your assets as a security, kinda like a guarantee. I think it's called mortgaging. This method allows you to raise a large amount of money even if you have a poor credit history. Thus, it is easier to obtain such a loan as the interest rates are lower too.

Personal loans on the other hand, are those normal (unsecured) loans that you probably have heard of every other time. They are obtained for various reasons like paying for a holiday, clearing debts, purchasing a new vehicle, or even funding a wedding ceremony. However, to be successful in the application of these loans, you need to have excellent credit track record because these type of loans are unsecured and therefore the risks are higher.

From my experience, GE Money provides 100% (10 year) loan for cars while the other banks like Maybank and OUB (or issit UOB?) only provide up to 70% (10 year) loan. Yes, this means the reamining 30% is payable by you, IN CASH. Let's say you're buying a car that costs $100k. That means you gotta fork out $30k as downpayment. Now $30k is a very huge sum and some people may not want to fork out and use such an amount immediately.

So it all boils down to the situation and your preference. Scout all related information and make the right choices for your needs. Good luck!