Hello, and welcome back to GoBearTV! I’m Denise. And I’m Pooja. Last season’s guide on home loans was much loved, so we’re back with another helpful guide on personal loans. When applying for a personal loan, you may have come across the terms Applied Interest Rate and Effective Interest Rate. Confused by these terms? Don’t be! The Applied Interest Rate, also known as the Advertised Interest Rate, is the rate you see in ads and other promotional materials. On the other hand, the Effective Interest Rate factors in additional borrowing costs, such as legal and processing fees. The Effective Interest Rate is the actual interest rate you’re paying on your loan. The fees you will commonly encounter when getting a personal loan are the processing fee, late payment fee and early repayment fee. These fees are typically a fixed cost or a percentage of the outstanding principal, whichever is higher. The maximum amount you can borrow is often based on your annual income. The more you earn, the more you can borrow. That’s right. And every bank has a different maximum loan tenure, or loan term, for a personal loan. A loan tenure typically lasts up to five years. But before you choose a longer loan tenure to get a lower monthly repayment, remember! The longer you hold a loan, the more interest you pay. Yep! So, make sure you carefully weigh the pros and cons between a longer loan tenure and a shorter one. To be eligible for a personal loan, you generally need to be at least 21 years old and have a minimum annual income of $20,000. You’ll also need your NRIC, your latest computerised payslip and your latest income tax notice of assessment. Lastly, check out GoBear before taking up a personal loan. We have many exclusive promotions. You’ll be surprised by how much more you can save. That’s all for our guide to personal loans. Don’t forget to like this video and subscribe to our channel so you don’t miss out on new episodes. Till next time… See ya!