Money has become most essential part of our life. People work hard day and night to earn money for themselves and their loved ones. Due to increasing expenses and prices of goods everyday it has become very hard for everyone to manage. The people of Singapore are also facing such issues.
You might have heard word “personal loan”, do you know what it is? Let me tell you what it is a type of unsecured loan bank offers to its customers without asking you where you spend the money you take on loan. It does not require to put any security against your loan. These personal loans are quite popular in Singapore for the past ten years. Singapore banks offer personal loans up to 5x of your monthly income. These loans are given on usually high interest rates and a period of 1 to 5 years. An annual fee of S$50. 00 to S$90. 00 is also charged by banks for the loan.
The government of Singapore has numerous licensed money lenders to offer personal loans to the people. It is very important for you to check your lender properly before taking any loans. Firstly, we need to see our lender is registered member of Insolvency and Public Trustee’s Office (IPTO). You should personally visit the office of money lender to check that your paperwork is done properly and documents must be signed after checking. Singaporean government is very active and alert to protect its people from illegal lenders. It emphasizes the use of landline numbers in advertisements from licensed money lenders. The personal loan
contract should be in easy to understand and benefit to the borrower. One should examine it closely and clarify if needed.
In Singapore family planning has to be done keeping in mind your finances. A baby doesn’t bring responsibility, but it increases your family budget as well. It’s very important to a have secured job before having a child. One you expect a baby, you should work on clearing your debts having higher interest rates so you save for expenditure on baby. One should must include baby on your existing insurance so that if something bad happens to you your family is secure.
There are two important things one should know before taking a Personal Loan. The Total debt service ratio (TDSR) helps us to determine whether we could spare the loan instalment from our monthly salary after deducting our current monthly expenditure. The next important point one should keep in mind is annual fees and late payment are charging your licensed money lender charges you. The late payment charges could be high up to 2.5% on top of your interest rate. If we keep these in mind before taking a loan it would benefit us to a great extent.
Now, we would talk about three main ways by which we can save money with Personal loans. First of all, we should look to clear our loans with higher interest rates with loans with smaller interest rates so it helps us to save money. Second way could be the amount of money you are taking from personal loan to invest it in a side income or side business. This would certainly help you in paying off your instalment and would bring more income for you. The third way is to upgrade your skills or qualification.
You must have also heard about Payday loan. Many licensed money lenders offer payday loans in Singapore. Then comes a question in our mind should be we take payday loans or not? One-word answer to this would No, as payday loans are very short-term loans offered to serve your financial need. One should be able to pay the payday loan on promised date, otherwise it incurs a hefty penalty on the borrowers. One should only be thinking of taking this loan when you have funds to pay from your monthly pay.
If you have an urgent requirement of money, and you are really confused to choose between Payday loans or Personal Loans, let me tell you the difference between both. Taking which loan would depend upon requirement and when you will be able to pay off your debt. If you want less money urgently and you think you can definitely pay in short duration with high interest rates, then you can go with payday loan, but if you need a higher amount of money and want to pay it in a year or two with ascomparatively lower rates than a personal loan would serve you better and would be appropriate for you.
When you need something you always take advice from your friends or colleagues. Let me make you aware about 5 false things you must have heard from them about Personal loans. Never ever take a personal loan to pay off your credit card debt, it is not right. Don’t think personal loan is the most expensive of all loans that are available in markets. It is better than taking payday loans or cash against credit cards as it saves you from higher interest rates. Never ever use the money of personal loan to buy a luxury item as it should be only used in emergency situations such as a medical problem, wedding, etc. People around you always say every licensed money lender or bank charges same interest rates but please survey market because that’s not true. Similarly, you don’t need a high credit score to avail personal loans.
We have heard people saying save money for emergencies, it is very important, but the question is how? One can take help from a financial advisor, who can help you manage your expenditure wisely and help you save for emergency funds. It does not matter if you save little initially because in your future you will see it gradually increasing.
With the latest conditions prevailing in Singapore people say that their retirement saving would not be sufficient
enough to survive for them. They would require to work even after 65 years for extra income to cope up with their monthly expenses. Considering your lifestyle, we would advise you to please plan for your retirement wisely and start saving from today so that you could have relaxed life in your old age when you cannot give you 100%.
At the end, we would say money is definitely having become one of the most important and essential part of our life. We need it from morning till we sleep at night, so plan everything accordingly and save more and choose the correct option to avail loan at the time of any crisis or emergency. Hope this article would help you in making correct decisions about your financial need.