An unsecured loan is a type of loan that does not require you to pledge any collateral or assets to secure the funds. Unlike secured loans, the approval for an unsecured loan relies on your creditworthiness, income, and financial stability.
Most unsecured loans come with fixed interest rates, whether they are term loans or revolving credit lines. In contrast, secured loans often give borrowers the option to choose between fixed or floating interest rates, depending on the lender.
At Unlimited Finance, our unsecured loans are ideal for individuals who need immediate financial assistance without risking their assets. Typical uses for unsecured loans include:
- Emergency medical expenses
- Debt consolidation
- Travel or vacation expenses
- Education costs
- Wedding or special event funding
Unsecured loans are popular short-term financing options. Typically offered in smaller amounts, these loans can be approved quickly, with some borrowers receiving funds on the same day, making them an ideal solution for those who need immediate financing.
In the event of bankruptcy, unsecured creditors will have a claim on the borrower’s remaining assets after the secured creditors have been paid from any pledged collateral. As a result, unsecured creditors typically recover a smaller portion of their claims compared to secured creditors.
In Singapore, unsecured loans don’t require collateral, but lenders have specific eligibility criteria. These may vary slightly between banks, financial institutions, or licensed moneylenders, but generally include the following requirements:
- You must be at least 21 years old.
- Singaporean citizens, permanent residents, and foreigners with a valid work pass are eligible to apply.
- You must be employed full-time or have a stable source of income.
Unsecured Loans vs. Secured Loans: Which is Right for You?
When deciding between an unsecured loan and a secured loan, it’s essential to consider your needs and financial situation.
| Factor | Secured Loans | Unsecured Loans |
| Collateral Required | Yes | No |
| Loan Amount | Typically higher based on asset valuation | Up to 6x of monthly income across all licensed moneylenders / 12x across all banks |
| Interest Rates | Determined by the value of the collateral and the borrower’s credit score. (The more valuable the collateral, the lower the interest rate) | Capped at 4% |
| Approval Speed | Slightly longer (due to asset valuation) | Same-day |
| Risk to Borrower | Asset at risk if payments are not made | No asset at risk |
If you need quick, short-term financial support and don’t want to risk your assets, an unsecured loan is the better option.
At Unlimited Finance, we’re here to help you bridge financial gaps with ease and provide the support you need during unexpected times. If you’re looking for a short-term solution with flexible terms and competitive interest rates, we offer fast and reliable unsecured loans in Singapore designed to meet your unique needs, whether you’re managing an urgent expense, consolidating debt, or just need a bit of extra cash to tide you over.
