No one likes to be compared and probably will not be making it easy for you to do so. FindTheLoan.com is here to change that. When using us, you will notice on your dashboard all their offers are in the same terms or jargon so that it is easy for you to compare apple to apple.

And when it comes to comparing loans, there is more than just going for the cheapest interest rate you see. Here are a few other factors that you may want to take into consideration, which will be clearly indicated on your dashboard. 

Fees

Take for example, 2 loans both with a quantum of $10,000 and 1 year in tenure, with the 1st loan at 11% p.a per year without any fees, while the 2nd has a lower interest of 10% p.a, but with an additional of one-time processing fee of $1,000 and 1% annual fee. The total fees of $1,000 and $100 make it slightly more expensive than the 1st, despite a lower interest rate - with an Effective Interest Rate (EIR) of 21% as you will pay a total of $2,100 in interest and fees.

There are times a lender may split the fees just to make it harder for you to compare. For one-time fees, they usually call it processing, faculty, set up or admin fee and for usage, they use terms like drawdown, usage, and advance fee. This is the reason that you will notice that our articles are written, as much as possible, with as many of the other names of the same loan type and terms that might be used, through our careful research (take for example there are 5 different names for gear up loan in another of our article under our Glossary page). In fact, it has become such a nightmare that at times even an experienced relationship manager joining another bank or lender might become confused.

Interest calculation method

Flat, compounding or reducing interest can drastically change how much interest you are actually paying especially for a loan with a long period. For example, a $100,000 (P) loan at 3% p.a (I) with just a 5 years (n) tenure calculated using the 3 methods can cause you to pay more than double the interest amount if not careful:

On your dashboard, we will convert any reducing interest to flat so that it is easier for you to compare apple to apple. Simple interest is used on your dashboard instead of reducing as most banks and lenders communicate in simple interest plus it is also easier to calculate the total interest, even though it may appear more expensive. However, please note on the actual term sheet/loan agreement, if they are used to communicating in reducing interest instead, they may revert to that. Your total interest should remain the same as it is simply their preferred method of communicating interest rates internally or externally or if required by law. You can also double-check the amounts again by using our calculator.

Block period

Take for example a 45 days loan; a lender may calculate it as 45 days, 7 weeks or 2 months. A $100,000 invoice financing at 3% per month interest will work out to be $4,500 for one with interest calculated daily or $6,000 for another calculating it as 2 months - 33% more for the 2nd even though both on paper state the same 3% per month. For short term loans that are measured by days than months or years, this is another way lenders make it hard for you to compare apple to apple.

Repayment term and lock-in period

For example, if you expect cashflow to be tight over the next few months but expect completion of a large order or a sale of a property later which will allow you to easily repay your loan, an interest servicing repayment means you only have to service your interest monthly, making your initial monthly repayment much more affordable. However, if you have a long lock-in period when your cash flow is freed up, you will pay an early repayment fee to discontinue the loan. (To find out more on the various repayment term types, please refer to another article of ours.) If you are getting a property loan, having a long lock-in period may mean if you believe the interest rate will be trending downward, you might not be able to take advantage of that and refinance your loan to a new lender without paying a penalty.

Some lenders make it hard for you to compare the early repayment fee between loans by having a 2-tier early repayment fee calling the 1st one, for example, the more familiar “Early Repayment Fee payable within 6 months at 10% of principal sum “ which you will then tend to focus on – and may overlook later on the page, for example, a, “Early Redemption Fee payable after 6 months but within 2 years at  5%”

As most lenders only have a single lock-in period, for simplicity your dashboard’s lock-in refers to the final period free of any penalty whereas secondary ones, they would state in under the terms and condition column

Tenure

Naturally, the duration of the loan is another important factor. The same quantum divided over a long period means smaller monthly instalments and easier for the business to cope with, with the trade-off being more interest paid. Note for overdrafts and for loans such as Merchant Cash Advance, where there may not be a fixed tenure especially if it is on a revenue-based repayment model - the Financing Partner may not enter a tenure.

In summary

The above factors will be clearly indicated on your dashboard, using the same jargon and product names, regardless of what a lender calls them, allowing you to easily compare and Find The most suitable Loan for you. You can also consider using our loan comparison calculator, to compare 2 loans, side-by-side. Check out our glossary if you would like to go into greater detail for any of the terms above.

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EFS is a series of schemes not a loan type. For example. The "SME Fixed Asset" is essentially a scheme for 3 types of loans: Hire Purchase, Construction Loan and Property/Land Loan. While the "Project loan" also has a construction loan, it is meant for construction enterprises. Please visit ESG's website for the most updated information.

We included it as a loan type on this page as many users are used to looking for it as a "loan type".Please thus continue by selecting the actual loan type that you are looking for. And if you like, you can get a quote from other non-Participating Financial Institutes as well. This can be done when you reach the Select Financing Partner page, where you can decide which lender you would like to enquire with.

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A Working Capital Loan or WCL for short simply means a short-term loan that is used for financing a company's everyday operations. These loans are usually not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company's short-term operational needs.

Some lenders may call it a business term loan even though a term loan simply means a loan where the lender provides cash upfront and receives that money back through a series of smaller payments over a fixed certain amount of time(term) and can technically refer to a number of loan types.

With FindTheLoan.com you don’t have to worry about all the various terms used by different lenders - reach all our lending partners with just one submission to compare and Find The Loan you need. If you are looking for a loan, not using our platform and are concerned that you and your own relationship manager might not be talking about the same thing, send our glossary page to them!

A Working Capital Loan is often the first thing that most SMEs go for as it is the loan that the most number of lenders offer and therefore market. However, there are many other loan types you can consider so it would be beneficial for you to check out the rest of the glossary page!

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Accounts receivable are the monies that customers owe your company for products or services that were invoiced. Accounts payable are the reverse.

When applying for a loan, lenders look at your financial statements to try to assess your repayment ability. But at times, they would also like to look at your AR/AP to determine if you can service your monthly instalments and not just about paying off the loan as a whole. We wrote a blog on common cashflow mistakes and potential issues when one does not prepare a monthly ARAP statement. If you are interested in reading it, please click here.

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Alternative finance refers to a broad range of financial instruments and platforms that provide financing options outside of traditional banking channels. Depending on who you speak to, it can range from Venture Debt to Crowdfunding, Stock financing to Revenue-Based Financing. In fact, these days, alternative finance can start to be a misnomer as even some banks and financial institutes are starting to offer Venture debts while Revenue-Based Financing is nearer to being an investment vehicle and Crowdfunding is more of matchmaking to investors than a loan type.

We have previously done an event where we invited speakers from all these channels to share respectively, how it works and when should you go for which. Click on the link above for more.

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Amortization refers to the process of paying off a debt, typically a loan or mortgage, over time through regular payments. These payments usually consist of both principal (the original loan amount) and interest (the cost of borrowing the money). It is more often used in long-term loans such as a mortgage

In an amortizing loan, each payment is divided into two parts:

1. Principal Payment: This portion of the payment goes toward reducing the outstanding balance of the loan. As the borrower makes payments, the amount owed decreases.

2. Interest Payment: This portion of the payment covers the cost of borrowing the money. The interest is calculated based on the remaining balance of the loan.

Here is an example of an amortization schedule.

Amortization may look similar to reducing interest to the untrained eye, which actually refers to the method used to calculate the interest on a loan. With reducing interest, the interest required each month/period is typically calculated each time based on the outstanding balance of the loan after each payment is made. As the borrower makes payments, the outstanding balance typically decreases proportionally each month/period too, leading to a lower interest being charged as well as a reduced instalment amount.

While your balance/principal also reduces from amortization,  a larger portion of the payment goes toward paying interest, while a smaller portion is applied to the principal. This is especially important when there is any early repayment or refinancing, as you may realize your outstanding balance may be larger than you expected despite paying a monthly instalment for months or years, as most of it may have just been going towards paying off the interest with the principal largely untouched.  It is a little similar to when you surrender a life insurance policy early on, you get so much less than how much you paid, compared to surrendering it much later, ratio-wise. 

A lender may calculate your interest based on reducing but offer level-repayment so that the borrower knows what to expect each month in terms of monthly instalments and vice versa for amortization. To sum up the above, there is :

1)How interest is calculated
2)Ways to calculate monthly installment
3)Ways to calculate outstanding balance

For two 100k loans both 10 months long and both P+I monthly instalment - the reducing interest loan will have the outstanding halved to around 50k after 5 months of payments(calculators, where the payment is made at the beginning of the month/period vs end of the month, will show some slight difference or due to rounding), whereas the amortized one will have a much higher outstanding balance. 

For more on repayment/monthly installment methods please click here. For more on interest calculation methods, click here.

Confused? Not to worry, our dashboard makes it easy for you to compare apple to apple by using the same term throughout. If you receive an offer from elsewhere, you can also use our loan calculator to compare 2 different loans side by side to see which one is more expensive or cheaper. 

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A bridging loan as the name implies is a loan to “bridge” the time between the proceeds from the sale of your old home and the money/loan to make a down payment for the new property for the interim and thus the name interim loan.

A business may need short-term cash flow in instances where they have works or projects that ensure funds would be coming in but need some cash upfront to, say, pay for raw materials. Technically that is an intention rather than a loan type as many types of loans can serve that purpose. Though many relationship managers and salespeople may call it a bridging loan, confusing the purpose, for a loan type or trying to be different so that the borrower cannot easily find the same loan type on another bank's website - another problem you will not have if you use FindTheLoan.com to Find The Loan you need!

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A board rate refers to an interest rate that the lender determines internally. How this rate is set, is something usually not revealed to the public.  Unlike international lending or interest rates such as Libor, for example, if you try searching the term online and it returns no results or solely from one lender, chances it might be just a board rate.

With little transparency, and no telling how it will rise or fall in the future, consumers have begun avoiding them. So, some lenders have begun calling them by other names instead of board rates. Also, lenders usually include in their loan agreement the right to change their board rate at any point in time, giving the borrower only as little as 30 days’ notice.

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To own a vehicle in Singapore, individuals are required to bid for and obtain a COE. The COE system is designed as an auction where interested buyers submit bids, and the highest bidders are awarded the COEs. Once a COE is obtained, it must be registered with a vehicle purchase within a specified period. The COE is valid for ten years, after which it can be renewed for a further period, subject to prevailing regulations.

A COE loan in Singapore refers to a loan taken to finance the purchase renewal of the Certificate of Entitlement. When a car owner renews his COE and takes a loan for it, it is different from a Hire Purchase loan which is done on the onset and the quantum typically covers both the initial COE and the cost of the vehicle or sometimes called machine price.

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A construction loan is a type of loan that is used to finance the construction of a new building or the renovation of an existing building (not to be confused with a renovation loan which is usually for the interior of a house/apartment). Construction loans are typically short-term loans that are used to cover the cost of the materials, labour, and other expenses associated with construction.

Some construction loans are disbursed in a series of instalments, depending on the progress of the construction, while others loans are typically disbursed in a lump sum.

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Crowdfunding is a method of raising funds for a project, venture, or cause by collecting small contributions from a large number of people, typically via an online platform and there are 4 types of crowdfunding :

Donation-Based Crowdfunding: In this model, contributors donate money to support a cause or project without expecting any financial returns. Donations are typically driven by the desire to support a social cause, charity, or community effort.

Reward-Based Crowdfunding: In reward-based crowdfunding, contributors receive non-financial incentives or rewards in exchange for their financial support. These rewards can vary depending on the project and can range from pre-ordering a product, receiving exclusive merchandise, or getting special access to events or experiences.

Equity Crowdfunding: Equity crowdfunding allows individuals to invest in early-stage companies or startups in exchange for equity ownership. Investors provide capital with the expectation of financial returns, typically through dividends or capital appreciation when the company succeeds.

Debt Crowdfunding: Also known as peer-to-peer lending or crowdlending, debt crowdfunding involves individuals lending money to borrowers, who can be individuals or businesses. Borrowers repay the loan with interest over a specific period, providing lenders with a return on their investment.

Although most businesses still prefer traditional loans due to the longer cycle and effort to clearly communicate the purpose, benefits, and impact of the project to motivate potential contributors - It has become increasingly popular in some regions in recent years.

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For loans such as overdraft or invoice financing where interest can be calculated using various methods, it is very important to know if the Financing Partner is offering it on a daily, weekly or monthly basis.

Take for example a 45-days invoice of $100,000 at 2% per month calculated accordingly in the following example :

To compare between 2 different loans easily, you can also use our calculator. On your dashboard, when quoting you, your Financing Partners are to indicate which method they are using, if they are not calculating it on a per annum (p.a) basis, so it is easy for you to compare and Find The Loan best suitable for you                      

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A Debt Consolidation Plan (DCP), works by taking out a new loan to pay off your existing loans and debts. It is also called debt restructuring by some lenders.

2 reasons why you can consider that -
1) if the new loan has a lower interest rate than your current one/s, you can save money on interest each month and may be able to pay off your debts faster.
2)Or if the new loan has a longer tenure (up to 10 years for version 1) you may be able to lower your monthly payment making it easier for you to service them each month.

There are 2 versions of DCP. One is a scheme offered by The Associations Of Banks Of Singapore and its participating institutes and is suitable for unsecured debt on all credit cards and unsecured credit facilities with these financial institutions in Singapore, that exceed 12 times one’s monthly income. 

The other type is offered by lenders who are not members of the association and could apply to any type of outstanding loan—secured or unsecured—with any category of lender. Some lenders and loan brokers are marketing using personal loans as debt consolidation to repay your existing debt. While technically you can do so, the assessment methods are different and you may end up paying more.

E.g you have existing debts of $5,000 total with 3 different lenders of different interest, quantum, start dates and tenure. 

A lender that takes over these debts is doing so, either because he has a new "bulk" customer and is willing to give a discount and thus lower interest rate, or the interest environment has improved and he has a better margin (cost of lending vs cost of his funds). But from a risk point of view, unless he is aware of the 3 other lenders you will be paying off - to him you will now have $10,000 outstanding from 4 lenders, especially when he can see your debt level via your DSR and you may be deemed a riskier borrower and he would have to factor that in, in determining how much interest to charge you.

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The debt servicing ratio (DSR) is a financial metric used by lenders to assess a borrower's ability to manage debt repayments. It measures the proportion of a borrower's income that goes towards servicing current debt obligations, such as loan repayments and credit card payments.

The DSR is usually calculated by dividing the total debt obligations by the borrower's gross income. Lenders use this ratio to evaluate whether a borrower has sufficient income to cover their debt repayments comfortably. A lower DSR indicates that the borrower has more disposable income available to manage debt, while a higher DSR may suggest that the borrower is at risk of financial strain or default.

Also, on an industry level, the authorities such as MAS may set a DSR level. They are aggregated among lenders, meaning you cannot e.g. borrow 5x from 5 different lenders resulting in a 25x DSR level when the industry level is 8x. (Please note this is just an example and varies depending on the loan type and lender type.) 

Please look at the following industry DSR levels in Singapore, for the one that applies to you.

For individuals :
Unsecured Credit Borrowing Limit (unsecured loans with banks)
Mortgage Servicing Ratio(MSR) and Total Debt Servicing Ratio(TDSR) (property)
Moneylender DSR 

MLCBs are usually updated within hours and all moneylenders will be able to see who else you borrowed from. Your DSR for one loan type or lender category is typically not used in the calculation of another and you may be able to borrow from 2 lenders from different categories.

The specific formula and thresholds for internal DSR can vary depending on the lender's policies. Depending on the lender's risk appetite, they could also be lower than the industry DSR. 

Some personal loan brokers just introduce you to the first lender they find, to have a quick sale. We are here to help you Find The Loan you need, and as you can only borrow from a limited number of lenders, you should compare and pick the right one/s for you. 

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For businesses: There is currently no industry-level DSR though there may be for business property-related loans (Please refer to here for more)

Please also note that where there is no industry-level DSR, members of CBS or MLCB can update it, making it available to other respective members, who may then factor it into their internal DSR. After taking a loan, you can check your CBS to see if it has been reflected. Members of CBS are mostly banks and some FIs, while MLCB is all moneylenders. MLCBs are usually updated within hours and all moneylenders will be able to see who else you borrowed from. 

However, as CBS can take some time to update, banks and non-bank lenders often rely on your latest bank statements to guide your DSR. An injection of funds will allow them to look at the sender and try to determine if the sender is a non-member lender and therefore a loan. Also, if they quoted you in early July based on your bank statements from January to June. By mid-August, you will have received your July bank statements and they may ask you to furnish them if you have not signed the loan agreement by then.

Your DSR for one loan type or lender category is typically not used in the calculation of another and you may be able to borrow from 2 lenders from different categories or even a number of non-bank lender

The specific formula and thresholds for internal DSR can vary depending on the lender's policies. Depending on the lender's risk appetite, they could also be lower than the industry DSR. 

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Early repayment fees, also known as prepayment penalties or early redemption charges, are fees charged by lenders if a borrower pays off a loan or debt before it's due. These fees are designed to compensate the lender for the interest income they would have received if the borrower had continued to make regular payments over the full term of the loan. However, not all lenders see it the same way especially smaller lenders or those without depositors. As they may not have a large fund to lend out, receiving back the loan earlier may allow them to lend it to new customers, you can try to negotiate for it to be waived off when the time comes. 

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The total cost of taking a loan is more than just comparing the interest rates charged. 

Take, for example, 2 loans both with a quantum of $10,000 and 1 year in tenure, with the 1st loan at 11% p.a per year without any fees, while the 2nd has a lower interest of 10% p.a, but has a one-time processing fee of $1,000 and an annual fee of 1%. It's total fees of $1,000 and $100, make it slightly more expensive than the 1st, with an Effective interest rate (EIR) of 21% as you will pay a total of $2,100 in interest and fees. 

EIR is meant to be an easy way to compare between 2 loans. However, note that there are many ways to calculate EIR - for example, even the projected inflation rate can be used(although seldom), as one dollar today might not be the same tomorrow - to show a lower EIR. Calculators, where the payment is made at the beginning of the month/period vs end of the month, will also show some slight difference or due to rounding.

As there is no standard way to calculate EIR, we decided not to compute it for you as your method of EIR may differ. As such the EIR (if any) shown on your dashboard is entered by the Financing Partners. You should consider using our calculator to break down your monthly instalment, total cost etc when Finding The Loan best suitable for you.

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A floating rate, also known as a variable rate or adjustable rate, refers to an interest rate on a loan or financial instrument that can change over time. Unlike a fixed rate, where the interest remains constant for the entire term of the loan, a floating rate can vary based on certain factors, typically tied to a benchmark such as a reference interest rate index

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A foreign legal opinion letter is a written opinion of a law firm in the same jurisdiction as the foreign party involved in the cross-border commercial transactions and is a service common provided by many law firms.

As a cross border transaction might end up being considered by the courts of any of a number of countries, a legal opinion is sought to ensure that the foreign party has the necessary capacity and power to enter into the transaction or to certify the legal validity of the transaction.

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A green loan is a type of loan specifically intended to finance environmental or climate-friendly projects. They typically receive more favorable terms from lenders compared to conventional loans, as a way to incentivize green projects. Some key characteristics of green loans:

Use of Proceeds: The loan proceeds are used for projects or activities with environmental benefits, such as renewable energy, green buildings, clean transportation, pollution prevention, recycling etc.

Green Credentials: The borrower provides details on the specific green projects, and the lender reviews the environmental impact and credentials of those projects.

Tracking/Reporting: Borrowers track and report on the use of proceeds and environmental outcomes.

External Reviews: Many green loans will have a second-party opinion or verification from external consultants to validate the sustainability credentials.

They lean towards Discretionary Lending and typically not a loan type that you can "shop" around.

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Hire purchase is a type of financing option that allows borrowers to purchase a vehicle over time by making regular payments to the lender. With a hire purchase agreement, the borrower pays an initial down payment and then makes monthly instalments until the loan is fully paid off. Once the loan is paid off, the borrower becomes the owner of the vehicle.

Vehicle loans, also known as auto loans, are a type of financing option that allows borrowers to purchase a vehicle by borrowing money from a lender. Like a hire purchase agreement, a vehicle loan requires the borrower to make regular payments to the lender until the loan is fully paid off. However, unlike a hire purchase agreement, a vehicle loan does not transfer ownership of the vehicle to the borrower until the loan is fully paid off. It is just like your house can be technically the lender's, legally speaking, until you paid off your mortgage. 

In some jurisdictions, the cost of depreciation may be tax-deductible for businesses that use vehicles for business purposes, depending on the ownership. To learn more, consider talking to your accountant or our community partners that are accountants.

Some lenders or salespeople may use the term interchangeably with the term leasing. However, there are some differences in tax implications - For simplicity, our website will therefore treat the 2 as the same, with the lender stating such details under the misc column tab on your dashboard. 

Hire purchases can also be done on industry and office equipment. Often purchasers may simply take the in-house- instalment plan offered by the seller where they can actually hunt for their own loan, which could be better at times.

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You offered a client say 120 days credit terms, but as you need the cash flow now, you can take the invoice to a factor where they advance e.g. 80% (advance/finance percentage) for your cashflow needs right now.

Used by businesses to improve their cash flow until their customers pay up, invoice financing (Some financiers may also call it Forfaiting) is when a business sells or pledges its accounts receivable or invoices to a Factor (and thus also the name factoring and invoice discounting) at a discount. 

At times, fulfilling an invoice requires you to have the finances to fund raw materials or inventories. Purchase Order finance provides dedicated funding for businesses to pay only specified suppliers. Think overdraft but with a limited range of usage.

Read the full version here. To get started, sign up/apply here.

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Disclosed (also known as notified) invoice financing and Undisclosed (non-notified) invoice financing refers to who your customer makes the payment to – the lender/factor, who will then deduct whichever is owed to them and refund you the balance if any -  or you and which you will then pay the lender. As you need to notify or disclose to your customer to do so typically via a signed memo by them, thus the name notified invoice financing.

Disclosed invoice financing may cost lower than undisclosed financing as receiving the monies directly lower the risk to the factoring house. The reverse is true if your invoices are small amounts from multiple customers as it makes it harder for lenders to assess the risks. 

SME owners might at times feel uncomfortable with disclosed financing, as they fear that their customers will think that they are in financial difficulty. If your business is with large MNCs or government projects, they usually understand their long credit terms will affect their vendors’ cash flow. Furthermore, their finance and purchaser are often not the same people anyway. Knowing that you have a financier supporting your business, may actually give them the confidence that you have the funds to get the necessary equipment or to fund your payroll and deliver on the project.

Some factoring houses understand for some borrowers, the concern remains. So, they may instead set up a joint account that reflects your company name instead, which you will just have to inform your customer to pay into later without a signed memo.

With FindTheLoan.com you do not have to worry if the various terms used by different lenders’ websites refer to the same thing. Simply reach all our Financing Partners with just one submission to compare and Find The Loan you need. To get started, sign up/apply here.

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Land area refers to the size of the land the property is on, whereas the built-up area is the size of the property where space can be used – such as bedrooms, bathrooms, kitchens etc. For non-landed properties such as condominiums and apartments, land area is usually not used. And for properties that have multiple storeys, it will be larger than the land area. This would help you identify which is which even if your developer may have used another term. If can typically be found on the front plan or brochure.

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Machine scoring in lending refers to the use of automated algorithms or computer-based models to assess the creditworthiness of loan applicants. It involves the use of advanced analytics and machine learning techniques to analyze various data points and generate a credit score or risk assessment for each applicant.

Traditional lending processes often involve manual underwriting, where loan officers or credit analysts review applicants' financial information, credit history, and other relevant factors to make lending decisions. Machine scoring aims to automate and streamline this process by leveraging technology to analyze large volumes of data quickly and make more objective and consistent lending decisions.

Often brokers claim to be able to negotiate the interest rate for you but we don't see how they can negotiate with a machine. Unless you are a large company or high net worth and in that case, you are unlikely to need to apply for a loan that is structured under program lending but discretionary lending instead.

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A merchant cash advance works by advancing a portion of your future daily debit and/or credit card sales in a lump sum to you. Credit and debit card transactions involve electronic processing through payment networks and card issuers, which requires infrastructure and services provided by merchant services providers. These transactions leave a digital trail that can be tracked and recorded, making it easier for businesses to reconcile their sales and for lenders to assess transaction history, so they can assess you differently as compared to applying for a working capital loan.

Unlike most business loans where there is a fixed term or tenure and monthly instalment, a percentage of your card sales are released to the Financing Partner until the lump sum has been paid back.

It is a pre-negotiated percentage (for example 5-20%) and may be suitable for retailers with fluctuating monthly sales due to seasonal demand, as they repay more when there are more sales, instead of a fixed monthly instalment that can be harder to stick to on months where there are lesser customers. 

The mutually agreed-upon percentage is called a “holdback” or “retrieval rate” and the “lender” will prepare a letter for you to sign and inform the card processor to process it.  

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An overdraft (OD) is a standby credit facility that gives you instant access to short-term cash flow. Unlike a term loan with a fixed tenure(therefore the name term), you can typically repay it whenever your cash flow situation improves and any amount you repay into the OD account can be withdrawn again as long as the total outstanding amount is within the OD limit. Therefore, it is also called a “revolving credit facility or standby credit”. 

An overdraft can be a valuable financing instrument to consider even when there is no immediate need, as interest is only charged when there is a drawdown. Having a standby credit on hand could be useful for those urgent times when you do not want to wait for your loan to be approved. However, interest for an overdraft tends to be higher than a term loan and is best used for short-term ad hoc needs. 

There are 2 types of ODs – Secured and unsecured. Unsecured ODs are issued using largely your credit profile & income to determine your repayment ability, while secured ODs allow you to pledge collateral such as insurance (that has cash value), property, certain investments, and deposits etc as security and can be as high as 120% of the value of the collaterals depending on the lender and quality of the collaterals. 

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A personal loan is a type of loan that is designed to help individuals meet their financial needs. Personal loans can be used for a wide variety of purposes, including financing a home renovation or repair project, paying for medical expenses, or covering the cost of a wedding or other large event or emergency.

A payday loan is a form of personal loan just that instead of giving you a tenure of weeks or months, it is based on the next payday for repayment.

Personal loans are typically unsecured, which means that they do not require collateral, such as a home or car, to be taken out.

It is important for borrowers to carefully consider the terms and conditions of their personal loans, including the interest rate, fees, and repayment terms, before taking out a loan. Check out another article of ours here to learn more about how to select a suitable loan and things to consider.

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There are 2 main costs to borrowers when they take up a loan whether it is for personal or business - interest & the fees they incur. Borrowers frequently look for the cheapest loan based on the interest and overlook that the fees charged can impact how much more they are paying in total (use our calculator to find out). The most common is the Processing fee (also known as the Admin fee or Origination Fee) in which the lender charges a one-time percentage of the quantum or a fixed value, on top of the interest charged.

Application Fee. This kind of fee can be annoying because you might pay the fee but not get a loan. However, this is very rare in Singapore, though they may request a commitment fee.

A commitment fee or some lenders call it a cancellation fee, applies where they will incur significant costs such as from engaging an appraiser but you may decide not to take up the loan. In such cases, they will bill you for the costs incurred. (Not applicable for program lending loans in Singapore. Please be wary if a lender or broker asks you to pay upfront)

Other terms you might come across on a term sheet are :

Early repayment charges. The fee a lender charges borrowers to recover the "losses" the lender incurs when a loan is partially or fully repaid earlier than agreed. Some lenders may also call it a Prepayment Penalty.

Late Payment Fee. Late payment fees are found on both personal and business loans. They are charged whenever you fail to make a payment on time.

Returned Check Fee or insufficient funds fees are charged when you try to make a payment/GIRO on your loan but don’t have the cash in your account to cover the payment.

Payment processing fees may be charged when you insist on paying via a cheque versa digital payment.

Confused? Not to worry, FindTheLoan.com is all about transparency and simplifying the process of finding and comparing a loan and all the Financing Partners use the same terms when quoting you. From your dashboard, you can easily see the various fees from our Financing Partners to calculate which is The most suitable Loan for you. Other fees such as termination fees, and late payment fees could also be found under the misc details column of your dashboard.
 

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Program lending, also known as policy-based lending or formula-based lending or checklist lending, involves providing loans based on criteria or guidelines set by the lender to help their credit officers make quick decisions and process large amounts of enquiries. 

Often brokers claim to be able to negotiate the interest rate for you. Due to the "straightforward" method of Program lending assessments, most borrowers will therefore often find one bank or lender offering a different rate to another lender and the way to find a cheaper loan is by simply comparing around.

Furthermore, these days lenders deploy machine scoring, so there is no one to even negotiate with. Think about it, if every deal can be negotiated, would the cost to assess them not be very high which will translate to higher borrowing costs for everyone?

Discretionary lending allows for a more flexible and tailored approach to lending, considering the unique needs and characteristics of each borrower.

It, therefore, requires extensive evaluation, research and analysis by the lender to assess the borrower's creditworthiness, risk and other qualitative factors such as the borrower's business strategies and competition landscape. Because of the high manpower and cost required to evaluate and craft a proposal/s, they are usually reserved for very high quantum loans taken by large companies or high-networth individuals.

Discretionary lending typically involves lengthy proposals back and forth with more than just quantum or interest but many other terms and conditions for the borrower to consider and negotiate - usually by the C level of the CFO and typically cannot be performed by a broker that is involved only during the loan application process and lacks the insights of the company that may take years to form, to be taken seriously by the lender.

A discretionary borrower typically enjoys many years of personal relationship with their main bank, which has good insights into the borrower and will be able to do their assessment differently from other lenders and may not find it that beneficial to shop around.

As there is no hard line on where program lending stops and where discretionary lending begins, so some Relationship managers may use the term discretionary a little differently.
 

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Property gear up or cash out is similar to refinancing except that rather than just refinance based on the outstanding amount, you take a loan based on the current valuation of the property/land.

For example(1), Daniel took up a $700,000 loan on his property worth 1 million with ABCD bank some years ago at 2% p.a with just $300,000 outstanding now. Interest rates have fallen and Daniel can by refinancing with another bank at the now 1%, enjoy a lower rate for his current outstanding, paying a lower instalment each month.

Gearing up/Cashing out your property, is taking into consideration the amount of equity you have built up over the years, (thus it’s also called property equity Loan, mortgage withdrawal, or reverse mortgage in some regions), but rather than taking a loan on the $300,000, Daniel takes a loan of $700,000 again - pay off the outstanding, and still have a cash flow of $400,000 which he can use to purchase another property or fund his business. If his property valuation has increased over the years or if another lender offers a higher Loan To Valuation (LTV) now, he could potentially cash out even more.

Gearing up can also be done with the property fully paid off. It is usually called a property equity loan though many lenders use them interchangeably. 

(2) But if interest rates have risen, instead of gearing up and borrowing $700,000 at a higher rate, Daniel could take a second loan of $400,000 from a new lender while still servicing the $300,000 outstanding with the first bank at the lower rate concurrently. The second lender places a second charge (lien) or caveat on the property to protect its interests, and it is called a second charge(lien) because the second lender is second in line after the first mortgage lender(In these cases, you will have two lenders, and it’s also referred to as a second mortgage or second charge) The term "caveat" is a Latin term that translates to "let him beware." It acts as a warning to third parties that the lodging party, known as the "Caveator," has an interest in the property/land.

Note that a caveat may sometimes prevent the owner from transferring or selling the property without the Caveator's consent. In contrast, a lien gives the lender the right to repossess the property in case of default. A charge is similar to a lien, but instead of directly taking repossession in the event of a default, a charge typically requires them to use legal proceedings to convert the charge into a repossession right.

Please note in the above 2 examples, one part is about whether the old lender is paid off or not or not while the other is about how the new lender lodges its "claim".  A new lender instead of lodging a 1st charge(lien) may simply only lodge a caveat for its cost-effectiveness even if you paid off the 1st lender.  They are particularly important if you are worried about defaulting on a loan. While the lenders can indicate whether it is a lien, charge or caveat under your dashboard - as they can be used interchangeably, if you are worried about defaulting, please contact us with your enquiry number so we can coordinate with them to also send over the loan contract, so you can seek legal advice.

Please note Singapore HDBs are not allowed to be placed a 2nd lien on, at the point of writing. 

Please note for property-related loans under a company name, you should choose the Business category instead of Consumer, followed by the loan type. If the property belongs to an individual shareholder - he/she usually takes up the loan in his/her personal capacity and loans it to the company/shareholders.

For industrial and commercial machinery and equipment etc that have a high resale value even after taking note of depreciation, and with high liquidity that lenders can easily dispose of in the secondary market in the event of default, gearing up might also be possible.

There are rare instances where an individual sets up a company just to be able to borrow from lenders that can only lend to businesses unless they have a moneylender license. To set up a company, the accountancy firms listed under our Community Partners section would be able to help you with that.

Note: These lenders typically only lend to borrowers that are High Net Worth individuals with assets totalling at least 2mm. So even if you are an HNW, consider getting quotes from the Consumer lenders first to see if there is a quote you like - as you would incur extra time and cost to set up a company, which may offset any savings. The assessment process is similar and you are unlikely to get a cheaper offer from approaching the same lender in your personal capacity vs business, but more of being able to reach more lenders.

7 different names for the same loan type?! If you notice, there are some slight nuances between each. But unfortunately, many RMs lack the experience, thus we only work with the lenders on a company level, among many other features, making us Singapore's 1st Loan Marketplace.

With FindTheLoan.com you do not have to worry about all the various terms used by different lenders. Reach all our lending partners with just one submission to compare and Find The Loan you need. In fact, it has become such a nightmare that sometimes a relationship manager joining another bank or lender might become confused. If you are looking for a loan, not using our platform and are concerned that you and your relationship manager might not be discussing the same thing, send our glossary page to them!

To get started, sign up/apply here.

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Property/Land Sales Proceed Advancement Loan is an advancement of your sales proceed or loan disbursement, which as it will only be completed/disbursed much later - but as you need cashflow immediately for example your business - can be considered when you have
1) an exercised OTP from a buyer or say during an en-bloc sale, or
2) a letter of offer for the refinancing/new loan of the property/land, from another financial institute. For the latter, please note some banks may specifically state in their agreement that is not allowed.

Please note for property-related loans under a company name, you should choose the Business category instead of Consumer, followed by the loan type. If the property belongs to an individual shareholder - he/she usually takes up the loan in his/her personal capacity and loans it to the company/shareholders.

There are rare instances where an individual set up a company just to be able to borrow from lenders that can only lend to businesses. Note: These lenders typically only lend to borrowers that are High Net Worth individuals with assets totalling at least 2mm. We recommend that you get quotes from the Consumer lenders first to see if there is a quote you like and reach out to us to see if it is worthwhile to get quotes from these business lenders.

To get started, sign up/apply here.

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A property decoupling loan is used by homeowners who are going through a divorce and want to separate their mortgage from their property. This usually means a new loan is required as the previous loan is being serviced by 2 or more people. Often, it is not as simple as just taking one name out, as when the loan was initially offered, the lender assessed the risk factors based on 2 or more people.

It is important for homeowners to carefully consider the terms and conditions of these loans, as well as the potential risks and benefits of separating their mortgage from their property, before taking one out. Some of the factors that homeowners should consider include the interest rate, fees, and repayment terms of the previous loan, as well as the potential impact on their credit score and current financial situation.

In some regions, a decoupling loan is for homeowners who want to sell their property but have not yet paid off their mortgage and are thus unable to do so(Please read our article on Lien for more details). So, they will take out a property decoupling loan, which is used to pay off their existing mortgage. In Singapore, we typically call it a bridging loan instead.

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A property loan, also known as a mortgage, is a type of loan used to finance the purchase of a property, such as a home or a commercial building or the land beneath it. Some lenders may call both as property loans whereas some will offer land loans as a separate product.

Property loans are typically secured loans, which means that they are backed by the property being purchased as collateral.

There are a few different types of property loans, such as fixed-rate mortgages, floating-rate mortgages, and interest-only mortgages depending on the region. Fixed-rate mortgages have a fixed interest rate and a fixed repayment term, while floating-rate (also called adjustable-rate in some regions) mortgages have an interest rate that can fluctuate over time. Interest-only mortgages allow borrowers to pay only the interest on their loan for a set period of time, after which they must begin paying off the principal as well.

The latter is technically a repayment method rather than a loan type). However lenders like to brand their loan types differently to try to stand out but end up creating a nightmare for consumers with so many different terms for the same loan type. So do refer to our glossary and not just rely on the label they use to make sure both are on the same page, and you do not end up applying for the wrong loan type if you are not using us!

Please note for property-related loans under a company name, you should choose the Business category instead of Consumer, followed by the loan type. If the property belongs to an individual shareholder - he/she usually takes up the loan in his/her personal capacity and loans it to the company/shareholders.

There are rare instances where an individual set up a company just to be able to borrow from lenders that can only lend to businesses. Note: These lenders typically only lend to borrowers that are High Net Worth individuals with assets totalling at least 2mm. We recommend that you get quotes from the Consumer lenders first to see if there is a quote you like and reach out to us to see if it is worthwhile to get quotes from these business lenders.

To get started, sign up/apply here.

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Flat, compounding or reducing interest can drastically change how much interest you are actually paying especially for a loan with a long period. For example, a $100,000 (P) loan at 3% p.a (I) with just a 5 years (n) tenure calculated using the 3 methods can cause you to pay more than double the interest amount if not careful:

For a Flat interest rate loan, the interest you have to pay is simply 3% x 5 years. Thus it's also called simple interest. 

For, a reducing-interest rate loan, the next calculation is on the principal balance outstanding and not the initial principal amount. In the 1st year, you pay interest of 3% and therefore $3,000. But in the 2nd year, your principal would have been reduced to $80,000 (calculators, where the payment is made at the beginning of the month/period vs end of the month, will show some slight difference or due to rounding) and 3% interest on it would be $2,400 and so on if it is based on yearly servicing. If it is based on monthly servicing, it would be the same method :  (3%p.a / 12 months) x the reduced principal that month.

On your dashboard, we will convert any reducing interest to simple/flat so that it is easier for you to compare apple to apple. Simple interest is used on your dashboard instead of reducing as most banks and lenders communicate in simple interest plus it is also easier to calculate the total interest, even though it may appear more expensive. However, please note on the actual term sheet/loan agreement, if they are used to communicating in reducing interest instead, they may revert to that. Your total interest should remain the same as it is simply their preferred method of communicating interest rates internally or externally or if required by law. You can also double-check the amounts again by using our calculator.

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Refinancing a mortgage or "refi" for short, means paying off an existing loan and replacing it with a new one. Borrowers often choose to refinance when the interest-rate environment changes substantially, causing potential savings on debt payments from a new agreement.

Other reasons why borrowers refinance include:

• To shorten/lengthen the term of their mortgage resulting in a higher/lower monthly installment respectively.
• To convert from a floating rate to a fixed-rate mortgage, or vice versa

There are many ways, where a refinancing package can be sold to you by a RM or broker to let you think there is a real saving where there is not. Consider reading our blog to ensure you are not paying more after a refinance. 

To get started, sign up/apply here.

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A renovation loan is a type of loan that is used to finance the renovation or repair of a property. Renovation loans are typically short-term loans that are used to cover the cost of materials, labor, and other expenses associated with renovating a property.

To get started, sign up/apply here.

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There are several repayment terms types out there(not to be confused with Early repayment) and it is important to understand how which one works as it impacts your ability to service a loan. On your dashboard, please note that the "Estimated Monthly Payment"  are all shown in P+I only for your convenience in comparing one loan with another as it is the most widely used. The actual repayment method will be under the Repayment Terms column. Continue reading on, to understand the different possible repayment methods.

Let us look through them with the use of this example:  Daniel borrows $100,000 and the tenure is a year while the interest is 20% p.a. for simplicity. His total P (principal) and I (interest) would be $100,000 + $20,000 = S120,000.

Interest-only loans tend to be more expensive as the lender requires a longer time to receive its principal back because it means a longer exposure to defaults and less cash flow for it to lend out again until much later.

Front end refers to the lender taking an amount upfront, typically the interest amount of $20,000 disbursing only $80,000 to him, which he then services $ 6,666.66 monthly for 12 months ($80,000/12 months). In some regions, it is also called a Discount Loan.

A Balloon repayment or a two-step mortgage can further reduce the monthly repayment installment for when the borrower has limited repayment capacity in the earlier years but is able to repay or refinance the loan after several years.

If it is a Deferred repayment (also known as Back End or Moratorium), the lender requires Daniel to start servicing the loan only after a couple of months or years. For example, in renovation loans after the renovation has been completed.

The last few types tend to be less common, as the principal is at risk to the lender for a longer period, and as such the interest charged could be higher, to offset the risk the lender is taking.


On your dashboard, all the various repayment terms are clearly displayed so that you can easily compare the various offers from our Financing Partners to find out which is The most suitable Loan for you.

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Revenue-based financing (RBF) is a form of alternative financing that provides capital to businesses in exchange for a percentage of their future revenue. It is a financing model designed to support growth-oriented companies, particularly tech startups with recurring revenue(like SaaS, and subscription services), by offering them flexible funding options without the need for traditional collateral or fixed repayment schedules but based on their revenue.

It resembles merchant cash advance where the loan repayment is also based on future revenue. However, MCA's assessment tends to be more on using historical sales to try to project future revenue, such as from your POS machine.

While RBF is often equity-free and not considered an investment, the assessment method weighs heavier towards qualitative factors than just quantitative factors from your financial statements and thus is not something a broker can easily facilitate apart from just connecting the borrower and lender. 

 

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A stock loan is a financial arrangement wherein an investor or borrower, borrows funds by using their existing stocks as collateral. Rather than selling the stocks outright, the investor temporarily transfers ownership of the securities to a lending institution or individual, commonly referred to as the lender. In return, the borrower receives a loan, typically a percentage of the stock's value.

Depending on the lender, they can be at times, a director of a large unlisted or listed company's own stock in the company. This is how billionaires like Elon Musk probably pay less income tax than you and I. As they can borrow against their own stock to fund their purchases of a jet or mansion, they do not have to draw an income.

In Singapore, lenders generally lend against the borrower's personal assets of various stocks or a director's own stock in a listed company. Also, Stock loans are generally not done as a form of program lending(refer to another article of ours for more) and are best left to the directors & officers for to company to apply and enter into, than for example, via a broker.

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With an Unsecured Loan, the borrower undertakes to make the repayments, and the lender will make a judgement on whether or not to lend solely based on their creditworthiness. 

A Secured Loan is when a borrower puts up a security(collateral) using something of value, such as a house, that the lender can take and sell to recover their losses if the borrower does not keep up with the loan repayments. Such loans include secured overdrafts and property gear-up and they are usually cheaper than unsecured loans or the quantum larger, as the risks for the lenders are lower.

Some lenders consider loan types like invoice financing and contract financing as secured loans too, especially if a strong paymaster discloses them. You can find more details on them on the same page.

When you take out a loan to buy an asset or house, the asset or property itself is securing the loan if the lender can repossess it directly such as by having a charge or lien over it and it would be considered a secured loan too. 

In the UK, a secured loan is also called a debenture, whereas in the US, a long-term loan even when unsecured, is called a Debenture.
 

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Reverse factoring is a type of supplier finance solution that companies/buyers can use to offer early payments to their suppliers based on approved invoices. Suppliers participating in a reverse factoring program can request early payment on invoices from the buyer or other financial institution, with interest or discount and with the buyer or supplier sending payment to the financial institution on the invoice maturity date if it is the latter. 

Many RMs use it interchangeably with PO financing. We recommend when applying with any lenders, to check their glossary if any, to make sure you are not applying for the wrong loan type delaying your process. Or sending our article over to clarify if they meant the same thing.

Check out our blog for more on reverse factoring.

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In the context of loans, "tenure" refers to the duration or period of time over which a borrower is expected to repay the loan in full. It represents the repayment period or the time it takes to satisfy the loan's principal and interest obligations.

Shorter tenures are typically associated with loans that have higher monthly instalment amounts but result in lower overall interest costs. while, longer tenures usually involve smaller monthly instalments as the loan is spread out over a loan period but may result in higher overall interest payments over the duration of the loan. To learn more, we suggest heading over to our article "How to compare loans and understand your dashboard" under our Glossary page.

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Venture debt is a type of alternative finance that combines elements of debt and equity investing to provide capital to high-growth, early-stage tech companies FindTheLoan.com and is not available to traditional businesses.

Venture debt is typically provided by specialized lenders who understand the unique characteristics and risks associated with investing in these companies. Venture debt providers combine their loans with warrants (or rights to purchase equity), to compensate for the higher risk of default, although that is not always the case.

In recent years, the Singapore government has made some effort to promote the incorporation of venture debt providers and the use of venture debt, to provide more channels of financing available to enterprises. At the point of writing, Enterprise Singapore has a page dedicated to venture debt. If you are a tech business that can consider venture debt, you may consider heading over to their website.

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