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Getting into Debt: You Should & You Should Not

Debt is one of the things that many people wish to delete from their lives and vocabularies. Financial experts have revealed that many people in Singapore try to commit suicide when they realise that they have huge debt which they do not know how they get out of it fully. But do you that there are many goods that can make you get into debt.

If you compare between the bad and good debt you will realise that not all debts that you can take are bad. You can also realise that even bad debt cannot be bad enough especially if you keep at a reasonable level that corresponds to your income/ Some of the best reasons that can make you get into debt are:

Get a college degree

Comparison by financial experts among the college graduates in Singapore has shown that they earn more income than workers who only possess a high school diploma. These graduates do earn almost double the income that the individuals who have not attained any degree. Experts say that it can be a good idea if you visit any financial institution so that you can take out a student loan. You can use this loan to pay for the college fees in a degree in the job field where you can be paid high income.

Although financing the college education can be highly expensive, it is valued as the best investment that you can take as a parent for your children. The skills that the children get can enable them to expand their knowledge which they can use to invest and in turn be able to pay the debt without struggling. Do not worry when you take a debt to finance your education as it can be beneficial in your future life.

Buying a home

Many of the residents in Singapore consider the idea of buying houses as the best investment since their value increases with time. If you take out a mortgage loan that has the best terms and conditions, you will enable you to have an asset that is valuable once you finish in repaying your debt. You can look around for financial institutions that have the give you a loan and the best places that you can get a house. There are so many houses for sale in Singapore that you are buying when you have received a loan. These houses can be the best investment that you can make with your loan. Most people will set emergency money aside to pay for renovation fees and etc.

Ways on how to get the best mortgage

You can start a business if you have ever thought of engaging in business in future and you do have a profitable business idea, getting a loan from reliable and licensed moneylenders in Singapore can best way to start. Although a business has its own challenges and benefits it is a matter of taking a risk in your life. Once the business starts to do well it will be considered as if you have invested in yourself. If the business is profitable enough you will be able to pay your debt within the shortest period of time even before the debt period elapses. After that, you will be debt free and all the profit and the whole business will be yours.

When you start a business you will be able to control you’re your future and get the benefits than you would if you were employed. Although you will not be guaranteed of 100 % success, if you look at the residents of Singapore you will realise that many people who take out loans to expand their business have benefited them for many years.

Reasons that can make you not to go into debt

1. Going on vocation– It is not good for you to borrow a loan so that you can go on a vacation. You will not be able to get means of repaying the loan.

2. Buying designer shoes, purse, and clothing- This items do cost a lot of money and yet they do not last for long. These items will also not add any value to your life, it will only be for prestige. After that, you will suffer the burden of repaying the loan, even be forced to sell some of your assets so that you can repay the loan.

3. Buying luxurious gifts- There are some gifts that you can buy will cost your life. You will not gain anything by buying this gifts just to pleasing your friends. It is good that if you want to buy any gift for your friend just buy a simple one without taking out a loan.

4. Buying a furniture for your house- Furniture are one of the expensive items that do cost a lot of money. If you have new house avoid taking out a loan so that you can furniture. You can be buying the furniture slowing from your savings. Some of the reasons why experts say that it is not good for you to go into debt over this items is that they do not appreciate in value even if they are left for long period of time. All of the above items continue to depreciate as you are using them. You will actually be left with a huge debt and have nothing to pay the loan with. The best advice against the above items is to save so that you can finance them.

Good debt can also turn bad

Experts in Singapore have revealed that if you are not careful enough with your good debt, it can turn out to be bad. Some of the best ways on how you can avoid your good debt from getting bad are by:

You should avoid taking out a loan debt that is beyond your means. If you want to take a loan take on that can be able to cover your business idea, buy a house, cover your educational requirements. Avoid taking a loan then you need as it can be difficult for you to repay since the interest rates continue to rise up with time. Take a loan that you can pay within the shortest time possible. It is good that you budget the finances that you get so that you can keep your credit score to the correct standard. When you delay repaying your debt you will ruin your credit score.

Author: Carina.W

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