Which Debt Management Products Should You Consider?

Do you have a lot of debt and would like to manage it in such a way it will allow you to be free from it in a few years or less? If that is a yes, you may be wondering what kind of financial program or service would help you because they all sound similar from one another and do the same thing.

Out of all these financial products, personal loans, balance transfer and debt consolidation would be at the top three. All three products are offered by banks, credit institutions and moneylenders across the country and each one of them has their pros and cons for those who plan to avail them.

However, what exactly are these pros and cons and how can you pick which one is right for you? Here are the questions you can ask to help you to pick the right debt management product for your needs:

How fast can I pay my loans?

The tenure duration for personal loans and debt consolidation plans tend to go on for a couple of years considering the amount covered. Usually, this may be for a year to 10 years, perfect for those who want to spread out their payments.

Balance transfers, on the other hand, may take up to 3 to 12 months considering that the interest rate is just 0% p.a. during these periods. However, if you failed to pay within this period, you will need to pay off your loan with an interest rate of 24% p.a.

What kind of financial program do I need?

If you want to get funds without being restricted to where it is used, a personal loan is a way to go. If you apply with a moneylender, you can get the amount you borrowed as fast as 30 minutes and you can pay off the debts you have which have high-interest rates, especially if you have gotten a personal loan with a low-interest rate.

Similarly, a balance transfer program would help you pay off your debts. However, this is good if you plan to pay it for short-term needs thanks to the fact it has a 0% promotional interest rate. If you can pay it within the promotional period, you will find a lot of benefits from this program.

If your debts all have high interests, taking the debt consolidation program is ideal. With this program, you can consolidate all your debts that is worth 12 times your actual monthly salary and put them into one single loan with a low-interest rate. Sadly, you cannot use this program for other expenses.

How are repayments done?

In terms of paying for each one of these programs, they do have different repayment schemes.

If you will take a personal loan or a debt consolidation program, you will need to pay a fixed amount every month throughout your loan tenure. The amount is computed based on your loan term, the interest rate of the loan program and the total amount you borrowed.

However, for balance transfers, it does not have a fixed monthly amount when you pay it off. Instead, you can determine how much you want to pay every month so long as you can pay the minimum repayments.

Usually, this is around 1% to 3% of your loan’s principal. Unfortunately, you may need to pay more than the minimum repayment amount throughout the 0% p.a. period because any amount you did not pay off during this period will be paid with a higher interest rate and it could be around 24% p.a. and up. If you will undertake this program, you will need to be patient in paying off your debts with a higher repayment scheme.

 

If you think you can’t handle this pressure, you can pick personal loans or a debt consolidation program.

What is the interest rate?

Each debt management product comes with different interest rates.

For balance transfer programs, moneylenders and banks tend to offer it with a promotional rate which can be for the first 3, 6 or 12 months. Around this promotional period, you won’t have to worry about paying an interest rate since it will be at 0%. However, they will charge a one-time processing fee that can be around 1.38% p.a. to 5.50% p.a. When the promotional period ends, your interest rate can be around 24% p.a.

For personal loans and debt consolidation programs, they do not have a 0% interest rate. However, they do have a fixed interest rate throughout your loan. Personal loans come with a fixed interest rate that starts at 3.7% p.a. to 13.14% p.a. Debt consolidation programs come with interest rates starting from 3.98% p.a.

Which one is good for me?

Finally, it is important you know the requirements of each debt management program before you apply for them.

For both personal loans and balance transfers, you need to be at least 21 to 65 years old to apply. You should also have a minimum annual income of $30,000 and a maximum annual income of $120,000.

Your credit history should also be good and if applying for balance transfers, you have a total debt must be at least 12 times more than your monthly income. The same total debt amount should also be reported if you will apply for debt consolidation.

Final Thoughts?

If you are hoping to reduce your debt immensely and reduce the number of times you have to pay monthly, getting a balance transfer or debt consolidation program would work wonders. However, before you sign up for one, it is ideal that you check its loan tenure, interest rate and repayment schedule before you sign for one because it may not be as affordable as you think.

If you plan to just borrow a few amounts of money to take care of expenses, a personal loan is the most viable.

Of course, make sure that you consider your status before you sign up for either one of these programs because if you do not, you may find yourself in an even deeper debt than before.

Singaporeans Urged to Spend More Money in Order to Boost the Economy

Considering the size and location of the country, Singapore’s economy is mostly driven by its exports. From raw materials to heavy machinery, Singapore exports it out of its shores and to other countries.

However, there is now a growing call from economists for Singapore to change its strategy and focus on boosting domestic consumption to assist economic growth.

Some groups find this recommendation quite unique because Singapore has reported low expenditure rates throughout the country despite the high cost of living in the country.

Current Status of the Global and ASEAN Economy

In recent years, the global economy has been besieged with various issues. There is the decline of the Eurozone and its attempts to assist ailing countries. There’s the crash of the Shanghai Stock Market, which affected stocks across the globe due to the fact China is the second largest economy in the world. The global economy had also experienced several ups and downs, mostly due to the increasing inflation rate.

Within the ASEAN region, five major issues have been identified by the Institute of Chartered Accountants in England and Wales which affects its current stability:

  • The sudden drop of prices for commodities.
  • The weakening and instability of the Chinese economy
  • The weakening of the global trade
  • The US Federal Reserve’s constant pronouncements over changing its interest rates
  • The performance of the export markets isn’t very good.

These five issues have caused problems for the growth rates in the region and ultimately led to the decline of economic growth. Since China no longer requires a lot of raw materials due to the end of its construction boom, many markets who depend on experts have lost a lot in the process.

Recommendations to Help

According to the ICAEW and various experts who looked into the matter, it is time for ASEAN economies to look into other industries such as knowledge-focused industries and manufacturing to help sustain their economies. Singapore has already taken the first steps to bolster its technology sector through TechSG, which would assist technology entrepreneurs to kickstart their business.

However, if governments wish to really assist individuals to help with spending even if money is very scarce for many people. Governments can introduce new policies that would strengthen citizens’ social security so they don’t have to save money.

Can Getting a Personal Loan Help?

While the idea of spending a lot may assist the economy to improve, it is not very easy to spend in Singapore due to the high living costs in the country. Both Singaporeans and foreigners alike would need a lot of money to get by every day.

One of the most notable ways to get by in the country is by acquiring personal loans from moneylenders, banks and other financial institutions.

However, personal loans should not be taken lightly and must only be used in extremely serious circumstances. In the UK and in the US, debt-fueled consumption has led to the decline of its growth and economy.

So, where should you use personal loans and where you shouldn’t?

Yes, you can get a personal loan through a moneylender in these occurrences:

  • Paying off your debts

If you have a lot of debts, especially those with high interest like credit card bills, you should use personal loans to sort it out easily. By using a personal loan, you can consolidate all your debts into one massive debt that can be paid every month with a lower interest rate. Since you only have to worry about one bill, you can save up more money and manage your finances and spending better.

  • Improving your home

Investing in a home is a very good debt people should consider because it offers a lot of benefits in the long run. However, you will need to have a lot of money to invest on a house and getting a personal loan is the way to go. If you have gotten a renovation loan, it will help you increase the value of your home. If you got a home loan, you will be able to buy the house of your dreams quite easily without having to worry about high debts.

  • Education or Career

Similar to getting home loans, using a personal loan for one’s career and education is good because it will provide you a lot of benefits in the future. Once you finish your education in a good university or training overseas, it will allow you to get more opportunities to get more income since your skill set matches high paying jobs.

No, you shouldn’t get a personal loan for these instances:

  • Luxuries

It is not ideal to take on more debts if you plan to purchase luxury items, hold extravagant parties or go to exotic locations. While yes, you can borrow money for these instances, it will just cause you to be stuck in a lot of debts even further.

For those who wish to have their dream wedding or honeymoon, it is ideal to borrow what is enough for the wedding or honeymoon.

  • Medical bills

If there is a medical emergency in the family, personal loans would be crucial to help you pay it all up. However, before you do consider using a personal loan for this specific bill, you need to sort out your payment terms with the hospital or medical provider so you do not have to worry about paying the interest. You should also try your best to speak to the provider if they can waive some of the fees so you do not have to pay a lot.

  • Purchasing or refinancing a property

Finally, it is not ideal to take out a personal loan just to purchase a car or refinance it. It would be good to just get an auto loan or auto-refinancing loan since this is a secured loan and costs less than a personal loan.

Final Remarks

As the global market slowly changes its course, it is important for governments to ensure that the public do not suffer in the process. However, even if the government and experts recommend that the public should do its part to help the government improve the economy, the public should not jump immediately to assist.

In this end, try making small contributions by making sound financial decisions such as when to apply for personal loans. By making these decisions, you will be able to help even a little bit and every bit counts.

The Total Debt Servicing Ratio in Singapore: What Should You Know and How it Affects You?

Singapore is currently considered one of the busiest financial capitals of Asia as all sorts of business and transactions occur around the country every day.

Since it is one of the region’s richest and busiest nations, it is very expensive to live in the country. However, Singapore offers a lot of financial solutions to help the public live comfortably in the country: from offering personal loans through financial institutions like moneylenders to affordable service fees and charges.

In order to ensure that these transactions and financial solutions are done properly, the Monetary Authority of Singapore (MAS) released an extensive and detailed framework that must be applied to all property loans offered in the country.

The framework is meant to consider the current status of borrowers who have outstanding debts in other loans while the process of processing property loans. All financial institutions in the country, including moneylenders, are tasked to follow this framework to ensure that proper credit underwriting practices are improved and to ensure that they improve their financial judgement

For personal loans, the total debt servicing ratio (TDSR) allows moneylenders and other financial institutions to determine the loan and its value.

TDSR also focuses on the following

  • Determine the credit worthiness of potential borrowers by giving moneylenders a strong framework that bolsters their debt servicing capability.
  • TDSR can be computed based on the total percentage of one’s monthly debts to their gross monthly income.
  • TDSR ensures that there is no room for error as it is now a standard for all property loans, secured property loans and refinancing loans.
  • Borrowers must present all relevant information that would highlight their debt obligations and their income so the TDSR can be computed.
  • The Monetary Authority of Singapore stresses that borrowers should not have a TDSR that is over 60%.

In 2016, the MAS revised the TDSR to loosen the policies for current home loan borrowers and those with existing investment property loans so they will be able to refinance their mortgages and pay their loans easily.

For those with current property loans, they will be exempted from the 60% rule no matter when they purchased their home. For those with investment property loans, they will now be able to refinance their loans above the framework no matter when they purchased the property. However, they will need to abide by two conditions:

  • They will agree to a debt reduction plan which would ask them to pay at least 3% of their current loan balance in the span of three years.
  • They will also need to pass the bank or the moneylender’s credit assessment.

Computation Details:

In order to compute the TDSR, you need to check the total monthly repayment for the loan being applied for by the borrower and their monthly repayments in all their other debts. Once you check the totals, add the medium-term interest rate. You should then add the 30% of all their eligible asset and income.

Why Does it Matter?

TDSR is placed to ensure that you, as a borrower, could repay your loans alongside the interest rate without any problems. It is also there to help financial institutions like moneylenders determine if you will not default on your personal or property loans.

TDSR also allows more people to apply for loans, especially joint borrowers, since the Monetary Authority of Singapore now ordered that a loan tenure must be computed based on the income of all the borrowers.

For example, if the joint borrowers are 30 and 50 years old, their income age average will be considered rather than their age itself. If one makes $10,000 while the other makes $5,000 per month, their income age average is 50, enabling them to take out a loan payable in 15 years if they will take out 80% loans for their property loan.

Previously, the borrower’s age is considered for joint loans. Based on the scenario above, 30 years would have been the max tenure permitted for the loan. Unfortunately, due to the short loan terms, repayments are more expensive. Loan terms cannot be stretched out as well if one of the borrowers is not working.

TDSR also removes the former requirement of having a guarantor to step in if you are planning to apply for property loans. With the framework, the guarantor will serve as a joint borrower and boost the chances of the property loan from being approved.

How to Reduce your TDSR

If you have experienced getting your loan applications denied because of the TSDR framework, there are ways you can reduce it before you apply for a loan again. Here are some tips to help you get started:

  • Try paying all your dues on time for a year without any delays. Banks and moneylenders will check your history to determine if you should be trusted with a new loan.
  • If you have any legal trouble because of your defaulted loans or bankruptcies, try holding off applying again after 5 years since if they see the bankruptcy or defaults are recent, they will not approve your application.
  • Pay all your outstanding loans as much as possible unless you are open to accepting smaller loans. You should also consider applying for secured loans since the banks or moneylenders can hold the collateral as an insurance that you will pay your loans. If you do not, they can repossess the property to cover your dues.
  • If you are going to work on your own or leaving your job, make sure to buy or refinance your property before you leave your employed job. Make sure to pay the taxes correctly and declare all your income.
  • Make sure you check your credit history before applying. If there is a glitch, ask a mortgage consultant to help you with your loan application.

Final Remarks

If you are planning to apply for a loan, it is important that you understand all the aspects that will be considered before your loan is approved. Before considering the finer points of applying for a loan, find out if your debts will be damper your application and find a way to fix it so your application will be successful.

Once you settle your debts and prepare the right documents, you will have no problems getting the loan that you need.

Prioritising Your Financial Goals Right Now

Prioritising financial goals can sometimes seem hard, especially with high cost of living that seems to be ever increasing. Although there is no blanket procedure on how to go about it, it will help to admit that you need to have some financial priorities.

However, you can start by deciding where you would like to be in a near, medium and long-term future as concerns your finances.

Having effective financial goals can prove to be beneficial

Planning Your Finances For Your Special-Needs Loved One Future

Looking after the physically challenged is an extremely challenging task, both emotionally and physically for family and the challenged. This is with the consideration that these challenges are different for each family. Even then, the most overlooked need is financial planning for the special needs member.

Unlike normal children, many special needs children require regular financial support which is usually covered directly by family members, through government incentives and also other financial institutions like licensed moneylender offer personal loans in cases of emergencies.

How then can you set an effective plan for your special needs child future?

  • Opening a Trust with SNTC:

This will ensure that your special needs child is cared for in the future and is among the most effective choices for a secure future. SNTC trust will work with the special caregiver to see that the financial obligations of the special needs individual are met. Additionally, the government supports SNTC, thus fees and interest charged are favorable.

  • Go for the Special-Needs Savings Plan:

This was established in 2014 whereby parents contributed towards this scheme using the CPF savings which ensures that their relatives are cared for through the regular scheme of fixed payouts when their parent pass on.

  • Funding a Healthcare Plan:

In Singapore, getting sick can be an expensive affair, but what when you are unwell in what ways can you then finance the medical bills? In the recent past, the government has taken on a multi-layered scheme with participants in private employment, the government, insurance industry, and each individual to assure an efficient health scheme.

The government using initiatives like providing grants to the health sector, Medifund, Medisave which helps individuals build up their savings, Medishield and different life schemes has assisted make healthcare a lot affordable.

Thus all you will have to to do is select a scheme that fits you, and you can get better health-care in the country. Personal loans by moneylenders can also help you fund scheme of choice too.

What Amount Will You Pay For Your Child’s University Fees In 20 Years?

In this article, we will state the amount you need to cover your child’s higher learning. So then, how much is a tertiary education in the country? These costs keep changing each time but according to NUS tuition fees, a year stands at $9350 for each academic year. Thus this totals $37400 for a 4-year course. Also, it has been estimated that this cost keeps growing at 3.2 percent p.a in the past 6 years hence this cumulatively puts an estimated cost of 70221 by 2035.

  • Grading Your Money Goals after Graduating:

After finishing formal education and having done some tarmacking you finally land that job which gives you the much desired financial freedom. It is then that you realize that you need to order your monetary goals but you do not know how to do this.

First, begin by identifying your money goals and arrange them in order of importance beginning with short-term goals followed by long-term objectives. Ensure that the goals are realistic and more refined. By ranking your objectives, this approach can help make your decisions thus classifying them as important, important urgent, not urgent, not important, and also not important urgent.

How to Prepare for Successful Retirement

Preparation for retirement is key in financial planning and it requires a mix of sound strategic planning and discipline. Look at the possibilities of owning a family home, making investments and grow them. Importantly starting right away is best. Avoid waiting until you are much older. Below are pointers to guide you.

  • Buy a Home You Can Afford:

It is prudent to buy a home that is within your financial capability, a home that you can afford without extending yourself financially. This is since getting a pricey home will only wipe out all your savings and leave you with nothing at all.

  • Wisely Grow Your Investment:

An investment is your saving tool after retirement, therefore it is wise to carefully decide where and with whom you want to invest your money. Have the likelihood of the investment venture earning profits instead of loses.

  • Time Counts:

Saving and beginning to invest as you prepare for retirement is the best practice. A popular error in planning for retirement is waiting until you are too old. Preparing at an older age can be challenging and you might not eventually accomplish.

Monetary Mistakes to Avoid in Your Marriage

For couples, not having financial planning in a marriage is among the fateful mistakes to ever make in life. This is because there will be no financial goal for the couple to work towards thus an emergency event will only mean they are ill-prepared for it, not to mention a lack of planning for the future.

Let’s look at some common money mistakes that married people make around financial issues.

  • Lack of regular money-talks and refusing to applaud your spouse when they deserve it:

In each relationship, communication is important hence for success in your relationship money-talk needs to be upheld. The couple should agree on key economic concern and praise each other on attaining a set financial milestone

  • No Accounting:

Having financial accountability is a key component in any marriage. Most couples make mistakes if they merge their financial accounts yet fail to set regulations and rules guiding their spending of the money.

  • Not Establishing Goals and Future Planning:

Establishing your financial goals will entirely be profitable for the couple, hence coming up with your business goals immediately will assist you in making the right decisions as regards money and will prevent unnecessarily spending.

In Closing

Although the cost of living in Singapore is ever increasing yet wages remain unchanged. Singaporeans should find tools to help them grow their earnings for a secure financial future. Importantly, having financial goals will help you plan on securing both your future and the future of your loved ones too.

5 Reasons Why You Shouldn’t Use Cash Advance From Credit Cards

You could get tempted to utilize cash advance from your credit card. Your card will come with several features, this includes one that will appear to be a little misplaced at first glance. This cash advance feature will allow borrowers to withdraw (about 90%) of the accessible credit limit as ready cash.

Even though this option is undeniably handy (it could be you want to repair the aircon, but the neighborhood mechanic accepts cash only, and its 10 days to payday). do recognize that this cash advance comes with many caveats and conditions.

Here are some reasons why you need to be super careful when utilizing the cash advance:

The Interests on Cash Advance are Higher

Getting a cash advance can increase the general interest on your credit card unless you repay everything before the following billing cycle. The reason is that the interests on the cash advance are about 29% per year. This is opposed to a usual 26% a year on most cards.

The easiest way to avoid this is in ensuring you pay back the card debt in full, ahead of the interest being charged. However, you might be losing funds because of the cash advance charges.

You Get Hard cash on Credit, With Lower Fees and Interest

When you are able to acquire a credit card, then you most certainly can access the personal loan facility or credit line. These two credit facilities will put cash straight into your account.

In all fairness, you will be charged processing fees for the personal loans. But, the loan processing costs are a lot cheaper when compared to cash advance charges, for huge loan amounts. For instance, when you want to take out S$10,000 as a loan, most personal loans will attract a fee of about S$100 or lesser. But, when you utilize the cash advance option to withdraw an amount of S$10,000, you might end up incurring a cost of S$600 in fees (6% of S$10,000).

What is more, lines of credit and personal loans are inclined to attract an interest of between 6 to 9 percent a year. You can also get the balance transfers facilities, that will offer you an interest-free time period of six to twelve months period. All these credit facilities are better options compared to the sky-high credit card cash advance rates of about 29 % per year.

Remember: when you want to take out a substantial sum of money, that you are not able to repay all in one go, do not use the credit card cash advance loan facility. Realize that there are many and better credit options for you to consider.

There are No Reward and Cashback for Utilizing Cash Advance loans

One main reason why people use the credit card cash advance is the benefits they often come with, be it the air miles, vouchers, rewards points, discounts or even cash back. But, randomly using the credit limit on your card in form of cash advance can stop you from enjoying some of these benefits.

Let us say that you get 2.5 % cashback on your credit card, then you purchase a bag worth S$250.

When you do the purchase the normal way – through charging the buy directly to your card – you will pay S$243.75 ( saving you $6.25 of the 2.5 percent cashback). Alternatively, you could receive rewards points and even other perks.

But, let us say you that you opt to obtain a cash advance since the store does not accept credit. You then withdraw S$250 through your cash advance facility, thus you incur an S$15 charge. You might end up repaying S$265 in total for the bag purchase; said differently, you will be paying an extra S$21.25 for the very same purchase.

Thus not only do you miss out on the card offer (2.5 percent cashback), you eventually have spent more money than everyone else!

Cash Advance comes with Steep Fees

For many credit cards, the charges for the cash advance are either S$15 or 6% of the cash advance amount, the amount that is higher. For instance, when you take out cash advance amounting to S$50, you will incur a charge of S$15. when you get cash advance totaling S$1,500, you will be charged S$90 (6% of S$1,500).

(Keep this in mind that the charge is S$15 on cash advances amounting to S$250 or less).

As well, take note that the fee will be charged on each cash advance that you make. It then means that the biggest mistake you can make is taking several cash advances on that credit card – the EIR (effective interest rate) would shoot through the roof!

Taking Several Cash Advances will Make Moneylenders Uneasy

Borrowers need to realize that there is one easy reason why the cash advances are a bad deal: banking institutions do not like them since they are a big risk signal.

Credit card cash advances are mostly utilized by untrustworthy individuals to access huge sums of money ahead of default, leaving the country for good or declaring bankruptcy (of course they will hide the hard cash on them).

As an alternative, cash advances often are used by individuals who will find themselves in some financial trouble and are not able to access any loans (besides those existing on the credit cards they hold).

As such, most moneylenders do get concerned when several cash advances start appearing on your report. This will cause issues in accessing other loan types approved.

Only Use the Cash Advance as the Last solution

There is little reason as to why you will need the cash advance, except for the rare unusual situations – an instance would be needed to withdraw some money while abroad since a specific merchant does not accept credit cards.

However, even then because of the large fees involved, it may be better for you to have someone pay cash to you. Also, you using a debit card to make a withdrawal of the amount you need is a much better solution for you.

Top Reasons Why You Should Pay Off Debt

When you are trying to pay off all your debts, it is often common that you fail to succeed in them because new debts may pile up on top of those you are trying to pay. You may also feel hopeless because the debt amount is too high and you do not know how to pay them completely with your current salary and regular expenses. Even if you use a moneylender’s personal loan to pay off your debt, you may be discouraged to continue because it would take a while before you can truly say you are debt free.

If you wish to boost your efforts to clear your debts, you need to remind yourself why you want to stop your debts from growing and be free from it. Remember what being free from debt can bring, what restrictions will be removed by being debt free and others.

If you still cannot think of the reasons why being out of debt is good, here are 9 reasons why you should kickstart your debt free campaign:

1) It will expand your financial security

Remaining in debt can pose a threat to your financial security and prevent you from maximizing the full value of your cash. The amount you pay your debts could have been used for other things, like emergencies, medical insurance, retirement, and savings.

When you are finally free from debt, you can now ensure that you will be secure for the future.

2) You will have more money for your desires

When you are free from debt, it will leave you extra funds which you can use for your desires which you originally cannot afford. Of course, the number of funds you may get when you are free from debt can vary depending on your salary and regular expenses.

When you only get a small amount of cash from being free from debt, do not immediately purchase the expensive things you want. If you purchase the expensive ones first, you may have to borrow money again to afford it completely. Save the money first then purchase the item you want.

3) It can reduce your stress

Debts are a major cause of stress since you will always think about balancing your debt repayments and your regular expenses. A small amount of stress is ok every once in a while, but if you constantly have stress, it can affect your health greatly.

When you pay off your debts, it can save your life literally since you do not have anything to stress about.

4) It lowers the number of bills you need to pay monthly

The more debts you have, the higher your bills are every month.

When you gain debt freedom, your bills will now be fewer and easier to manage. The only thing you will need to worry about is your actual expenses like utilities, phone bills, and insurance. These expenses do not have minimum payments and interest charges, making them easier to pay.

5) It can boost your credit score

Debt can affect your credit rating, especially if you have a lot of debts which remain unpaid. If you are late in paying even one of these debts, it will also affect your credit rating.

When you pay all your debts and keep it that way, you will be able to improve your credit score.

6) It helps you teach your kids about proper money habits

Financial freedom would also give your children a good example to be debt free. Explain to your kids why being debt free is important and why it is beneficial for them to practice good money habits. Of course, you need to make sure you do not look like a hypocrite when you teach this lesson to your kids because an actual proof being debt free is good.

7) It will help you own the assets you have on loan

If you have an active mortgage, like your house or car, you do not own them completely. If you pay it off completely, you will own the mortgaged item in question. You will no longer have to worry about the bank or the moneylender from getting the item back when you fail to do repayments.

8) It will boost your earnings

When you get yourself a personal loan from a moneylender or charge something with your credit card, you are borrowing cash from your future income. As a result, you are basically going to pay for the things you borrowed now with the money you will earn the following month and the subsequent months hereafter.

Debts lower a person’s living standards since it restricts how much you can do with the money you currently have. When you pay off your debts, you will be able to maximize your income and improve your living conditions.

9) It frees you from moneylenders and other credit providers

When you have an outstanding debt, it means your money is controlled by the moneylender or the credit provider you used. They will decide how much you need to pay and when you need to pay. In some cases, the moneylender may even increase your interest rate and the minimum amount you need to pay per month if your budget will allow it.

Final thoughts:

Money is a very delicate possession that every person must handle with care because its value is irreplaceable. If we somehow lose funds, borrowing can be tricky to handle especially if the debts continue to increase.

However, we should not lose hope when it comes to paying off these seemingly endless debts because there is always a way to get past this hurdle. With the 9 points, we listed above, some patience, perseverance and focus, you will be able to pay your debts slowly and free yourself from it.

Imagine how much stuff you can do without worrying about debts! The possibilities are endless so start getting yourself together and begin the long yet steady process of paying your debts today.

Good luck!

Golden Tips To Settle Your Credit Card Debts

Many people are afraid of debts since it is believed that it can drag you down for a long period and even give you sleepless nights. But, there are various reasons that will lead to some people in spiraling debts.

You may have settled an emergency need using your credit card. But, regardless of the reason, defaulting on your credit card debt is a sure way to get into snowballing debts. This may be the case for those who have maxed out their credit card limit.

The good news is that there are several ways for you to deal with such a dilemma. Ignoring your lender’s calls and your bills is not part of the tips.

Here are 5 ways to help you get out of credit card debt.

Annual Zero Percent Interest Balance Transfer

Most banks in Singapore to offer this option of a balance transfer. A balance transfer may be used to repay credit card debts with zero or a low-interest rate loan. When you hold unmanageable credit card debt with a money lender or bank. You could consider applying for a credit card with another lender. This new credit card can then be used to repay your older credit card debts.

Normally balance transfers come with 0 % rates of interest for the first 6 months. This gives borrowers some grace period to look for more ways to settle the debt. Make sure that you only use your new credit card after you have repaid your debt. In so doing you will avoid accumulating new debts. The balance transfer process could take a period of 3 weeks or more to take effect.

Minimum Repayment

If you can, it is better to repay the whole loan amount in full soonest possible. But then, when the cash to do this is not enough to pay off the bill, you could choose to at least pay the minimum amount.

By paying the minimum amount you will be able to avoid incurring late payment fees however the interest costs will still apply. Borrowers need to be aware that most credit cards attract a minimum repayment of 3% or $50 of the unpaid loan. Thus it may be a good idea to inquire from your moneylender about it.

Although making the minimum repayment can be helpful, it will only serve as a short-term solution. Thus avoid making this a habit or you might soon find yourself knee-deep in debt.

Also, when you are only able to pay the minimum amount on your outstanding credit card debt. Then it is advisable that you avoid using the card. This will help you avoid piling more debt to the already existing bill. With this in mind avoid using the credit card as you work towards repaying the loan balance.

Personal Loan

Another good option for you is utilizing personal loans. Some personal loans come with lower interests than credit cards. Therefore, you could consider using personal loans to settle your credit card debt. These kinds of personal loans may be obtained from privately licensed moneylenders.

Since personal loans are normally multi-purpose, it then means that they may be used for various uses such as purchasing stuff to settling other debts.

Even though personal loans come with fixed repayment plans, you can still repay it at much earlier. But first, confirm whether you will incur a prepayment penalty. This will help you know whether you can repay the loan before the loan set tenure and at no extra charges.

Pay In Full

Certainly, the best solution to deal with any debt is to repay the existing balance in full. Sadly there are a few people who see credit cards as free cash thus they will keep swiping the card until they attain the credit limit. From that point, they only will pay the required minimum payment.

Keep in mind that although banks will boast of having low required payments for the set due dates. They do so as a way to offer an assurance to borrowers that they will not get charged the late payment fees. Though the interest rates charges still stand.

Just remember that even when there are no late payment charges, provided that you do not repay the loan balance. A borrower will still get high-interest rates charges for their loan. Thus settle the due loan amount to avoid incurring the interest rate charges. It is best to opt for this solution when your monthly salary is still adequate to repay the debt.

Debt Consolidation

For those borrowers who have several credit card debts, then it may be a good idea for them to consider getting the debt consolidation scheme.

Different from the balance transfer that will require that you obtain a new credit card. The debt consolidation plan may be done in different ways. Some banks will offer the debt consolidation scheme even when you do not hold a new credit card. However, you will need to hold a savings account something that moneylenders offer to their borrowers.

Choosing the debt consolidation plan it means that the financial institution you choose will repay the outstanding debts on your multiple credit cards. This leaves you with a single loan which has a single interest. This makes making on-time loan repayments easy since you are keeping track of only one loan.

This repayment option is best to be used when your card debts have reached 12 times your monthly salary.

What To Do Once You Have Repaid Your Credit Card Debts

When you hold several credit card debts, you could start by coming up with a plan on ways to repay them. Soon after you have repaid these debts up to the last dime, you will need to be careful not to get into a similar situation inthe future.

When you want to make any important purchases or are facing an emergency situation. You could consider getting a personal loan to help you manage. The personal loans offered by licensed moneylenders attract lower rates of interest that set at a 4% cap.

What To Do Before Declaring Bankruptcy: The Debt Advice You Must Know

Sometimes it can happen that you are not able to fulfill your financial obligations such as unpaid debts. The big issue here could be that the law will require that you pay off the outstanding loan amount. You might attempt to settle a personal loan that might appear to be equitable to you.

However, your moneylenders may not see themselves gaining from your repayment proposal. This can create a lot of financial strain for you. Thus, you might even end up considering the option of declaring bankruptcy.

When you declare bankruptcy it then means that you are recognized by law to be financially unable to pay off your debt as well as meet other financial obligations. In so doing, the debtor will be protected from being required to repay all the existing debt before the declaration.

Bankruptcy in Singapore

During the past year, 2,000 people filed for bankruptcy in Singapore. Normally this would not be something that many Singaporean would not wish to end up doing. But then again, in all honesty, this is a favorable way to relieve yourself from the big problems that seem to only get bigger. In essence, when you file for bankruptcy, you are swearing by the law that you, as an individual with free will, are not in a position to pay off any of your existing debts.

As soon as you have completed all the necessary formalities, you are now officially debt-free. Also, it means you are not liable to make any payment for any previous debt or even interest. But before you start celebrating, you need to realize that this has a catch. When you declare bankruptcy, you, in fact, are trading one difficulty for another.

In so happens that those individuals who by law have been declared bankrupt are mostly treated as if they were social outcasts. Unfortunately, no lending institution will trust any person who has been declared bankrupt. This will even make transactions not to look safe if it is carried out with a bankrupt person.

Mortgage, rent, credit, personal loans, and also fixed income are just about unachievable. This is once you are declared bankrupt. When you hold some assets, there will be a cap imposed on them by law. This then gives the extra to a trustee, who will thus sell your property or assets in order to repay your moneylenders.

Knowing How Debt Will Affect Your Credit Score

Another thing that will make matter worse is the stress that this social blemish will put on all emotional ties. It can happen that your loved ones and family will start to stay away from you. This can be due to the law-enforced tarnished reputation. It is for this reason that you will need to carefully think first ahead of filing for bankruptcy. Below are some things you will need to carefully look at first ahead of committing yourself to declare bankruptcy.

Consider Other Alternatives That Can Help You Address Your Problem

At times filing for bankruptcy may not be the most suitable solution for the large unpaid debts. You will need to be certain that your debt is beyond repair. You will need to first confirm whether you can find some achievable and reasonable solutions. This needs to be a solution that not only saves your repute but will also learn from it several things regarding working hard. This will help you pay for those losses you will incur.

As soon as you have actually repaid all your debt through all those challenges. It is actually possible for you to get better repute. You need to prove that you are able to settle a huge debt through hard work. Remember, there are people who find themselves in worse conditions when they come across debt troubles.

When you are constantly telling yourself that you have done your best yet you are not able to repay the debt. Then it is most likely that you have not to look at all avenues possible as yet. You will realize that there are very so many ways to make money and these will not even be illegal. There are some ways that are questionable yet others are just embarrassing to do. Even then you will need to focus on your set goal; this is repaid the existing debt.

Talk To a Debt Advisor About Your Filing

In the world of economics and finance, debt is a common matter. Luckily debt advisors or debt management experts, are there to assist you in dealing with debt problems. The one service a debt advisor can offer you would be a way to legalize your bankruptcy.

When bankruptcy is truly the answer you are seeking, your debt advisor will need to ensure that you first can really pass for a bankrupt. The advisor will need to look into your finances in order to find possible supporting evidence. Your advisor will also educate you on what will occur to you soon after you go bankrupt. Also, they will take you through away for a specific amount of compensation.

Know The Effects Filing Personal Bankruptcy Will Have On Your Relationships And Your Life

Once you are ready to start over, then bankruptcy could be right for you. But for those who value their relationships and simply love to interact with people and build bigger and close social network. Then you should not even consider filing.

Despite this being established to assist people with critical financial difficulties. However, filing for bankruptcy is simply a legal way of letting others know that you cannot manage money properly. The disgrace this will bring to you and your loved ones can become unbearable. From this, you might end up losing your integrity and credibility as a collaborative person.

When you are bankrupt, you will be limited in different ways. This can include finding it hard to get employment in the public sector. This can also be for specific jobs in the financial industry. Equally any potential employer will be able to view your profile indicating your bankruptcy status.

In the end, this will still be your decision. When you would like to learn more about bankruptcy, it is advisable that you contact an expert who can take you through the whole process.

Filing For Bankruptcy In Singapore: Process And Procedures

Even with the best attempt and desire to settle the outstanding debt. At times declaring bankruptcy may be the only option left should your financial problems spin out of control.

Regardless of whether it is a company or an individual filing for bankruptcy. You will need to engage the help of a trustee. Filing for bankruptcy should not cause you shame. Especially, when you already have tried all possible ways to repay your debts. By working with a reliable trustee, the experience of the filing process will go smoothly.

A trustee is licensed under the Superintendent’s Office in Bankruptcy (OSB) to manage the process. The initial meeting with a trustee, your current standing, and financial history will be reviewed. From this, the trustee can figure out the right plan to take, and continue the process.

Debts That Will Not Be Cleared

Once an individual or business bankruptcy is discharged, nearly all debt will be cleared except for the case of student loans, child support, court fees, alimony, and debts from fraud.

The Difference Between Individual And Company Bankruptcy

The bankruptcy trustee is frequently interviewed when it is a sole proprietorship business or even partnership. Basically, there is not much difference between these two. The business owner or partners will be in the business. Therefore their private and business assets are same. You could say that the process for personal and sole proprietorship businesses will fundamentally be the same.

When looking at an incorporated business, the business assets are separate from those of an individual. It is a legal entity, a company and the business proprietor have liability protection. In these cases, personal property will be kept every time business assets are seized.

What Happens Once You Declare Bankruptcy

When you are considering filing for bankruptcy, it is key that you know the requirements that you need to meet. You have to prove that you are not capable of repaying your debts. This could be due to joblessness, an absence of possessions to sell, and other failed investments. When you are quite uncertain of the process, it is advisable that you work with a reliable bankruptcy trustee.

Total assets compared to the personal loan. Bankruptcy trustees are not lawyers. But they can assist you during the bankruptcy process. They can assist in comparing the total possessions you own, assets you can provide and the whole financial commitment that you should repay. When you both realize that your possessions are not enough to settle your debt. The trustee can assist you to file for bankruptcy. The trustee will contact creditors to let them know of the filed bankruptcy.

Depending on how huge the debts might be, a meeting can be called with your moneylenders. From this point, the bankruptcy trustee may start selling the property to settle the debt. The assets might be property, automobiles, and business tools.

Based on your province, even after declaring bankruptcy, you find that some assets of a limited value you will be allowed to keep. This can be things like homes, incorporates vehicles, and also workplace equipment. You bankruptcy trustee might suggest to you on the possessions that they may keep all through the process.

How Long The Process Of Being Bankrupt Lasts

Theoretically, bankruptcy will last 9-months. Even so, this is not always the case. After the 9-month term, elapses, a release hearing will be scheduled. Some components that might make the bankruptcy exceeding 9-months include:

-The customer has in the past been bankrupt

-The trustee, moneylenders or OSB oppose the discharge

For both these situations, a court proceeding will be organized to analyze each situation of the bankruptcy. It will also consider the objections to the discharge. The borrower could wind up getting a conditional discharge, complete discharge, suspended or even complete refusal. By getting a conditional discharge, you may have to make further payments, prior to the bankruptcy is considered as absolute.

What happens to Your Assets

Most people will be troubled as to whether they get to retain most of their possessions or not. After all, you have worked tirelessly to acquire them, and certainly, you do not wish your lenders to repossess them. Fortunately, you can get seizure exemptions as pointed in the provincial law. To find out more regarding this, consider talking with an organization in Singapore which focuses on personal bankruptcy.

All through the filing process for bankruptcy one can expect:

  1. Economic counseling sessions

Counselling often is done in the bankruptcy trustee’s office. The chosen trustee an help their client to understand the causes of their bankruptcy. From this, you are taught preventative methods to avoid financial difficulties in future.

  1. The trustee suggests a discharge to the OSB

Your trustee will identify your activities and can suggest a discharge. Immediately after you the granted discharge, you get distributed copies. When finances become unmanageable, declaring bankruptcy is thought to be the last option. By understanding the process, and getting the assistance of expert bankruptcy trustee. Those considering filing for bankruptcy can be ready for the steps and process for the 9 months.

How Debt Is Repaid

The role of bankruptcy trustees is usually to provide their clients 1-monthly payment. The debtor gets to pay this amount to the trustee, who in turn pays off your actual moneylenders. A bankruptcy trustee can analyze the client’s income and other contributing economic factors, such as family expenditures. Then they can come up with a monthly total.

Your particular trustee can also talk to your moneylenders and explain your financial circumstances. Naturally, your lenders will provide the trustee with guidelines regarding payment. But, this is not a usual way to approach bankruptcy for the debtor. This is because declaring bankruptcy separates the borrower from lenders.

In many cases, this meeting is often done between your chosen trustee and your creditors. Even then there are those people who will go to loan advisor for some emergency funding like a personal loan. This is often when they are not able to repay the monthly on time since they cannot get personal loans issued by banks for long periods.

Using Credit Cards To Your Advantage

It is possible to have a credit card and never get into debt. However, in order to do this, you will need to have good spending habits in place. You will need self-control and discipline as you use your credit card to gain rewards. Luckily, it is not hard to cultivate good spending habits. Provided that you will take note of your bills due date and adhere to your budget, the remaining part will follow

When it comes to credit cards there are people who are ready to use them while others are against it. For Singaporeans who see credit cards as a necessity, they will have varying reasons starting with social status for convenience.

Then again, for those who may not accept that credit cards will do you good, will offer a million reasons against the use of the cards. Even then when you are considering whether to take one or not.

Below are some ways for you to use your credit card for the most benefit.

Choose The Best Credit Card For You

For a progressive country like Singapore, there are numerous types of cards available. The different types of cards may be availed for a large variety of uses. This means it is you who is to decide on the one that will be suitable for you. Cards like the POSB, OCBC, and Citibank are suitable for activities connected to EZ-Link.

When buying petrol the card to use is the POSB Everyday Card, Credit card by American Express – Platinum, and UOB PRVI Platinum Card. Therefore, before you get any card do consider why you are getting it. This will help you choose the best card for your financial needs.

It Can Grow Your Credit Score

Your score is a factor that will determine whether a moneylender you are trying to get a loan from will authorize your personal loan application or not. The licensed moneylenders will make their decision depending on whether a borrower can pay based on their credit score. When a borrower has a low score, then a lender may be reluctant to offer a loan to them. This is because the borrower may not be capable to make regular payments as required.

Similarly, when you do not have any credit score since you have never taken a personal loan as well you have never taken a credit card. Thus the moneylender will not have have a way to know if they may trust that you will repay or not. In a way, by getting a credit card you will get to grow your score. What you will need to do is ensure that you settle it and pay back regularly.

You Will Get Rewards

There are several credit cards that offer rewards should you spend through their cards. This is a marketing plan to get you to spend on something they are offering you. At times they will you offer miles which you could use for travel.

Therefore, when you spend cash on things, then it is ok provided you know you will pay promptly. At the same time, you know that you will get something in return. This will not be heavy on you.

Owning a credit card may not be as bad as it is at times pictured. It just will require lots of self-control and discipline. However, once you know the right method of spending wisely, then things will work out well for you.

Make The Best Of The Bonus Offers

Though it is not recommended that you go through several credit cards each year for you to gain their bonuses. It is normally a good idea that you be on the lookout for any promotional offers. This is more so when you are getting a new card. From these, you can often earn thousands of bonus points on most cards. This is by simply spending a given amount within a given time after getting a card.

Existing cardholders need to also look out for seasonal offers, particularly during the holiday season. Most credit cards normally offer special promotions in additional miles or even cash rebate during peak travel seasons in June and December.

Utilize Fully The Reward Points

The fastest way to fully use your reward points would be to use a given card which offers the highest points in rewards for specific purchase categories. This can be for things such as gas, groceries, or dining out.

Generally, it is best to have several cards that give most rewards for different categories of purchases. This way they will complement one another. Though for you to make the most of the card collection will require some effort. This is to remember the most ideal for each purchasing category. This will not be hard when done with 2-3 cards you frequently use.

People oftentimes make a mistake by choosing a card just simply because they want to. It is essential that you carefully consider the card you want before you get one. By doing a proper comparison it will help you know if it is worth getting the credit card

It May Be The Only Acceptable Way To Pay

Some establishments, particularly in other countries, will only accept leading credits cards as a payment option for their services. Certain conditions may also require you to have a credit card such as when you travel to another country and do not find any money changing stations. You will benefit most when you hold a credit card during such times.

Also, some airlines and hotels only accept advanced booking using credit card payments. Therefore, when you are planning to travel in the near future. Then it is wise that you consider taking with you a credit card.

Conclusion

Just like any tool, credit cards are only good or harmful based on what you make them be. Different from paying using cash, plastic money allows you to earn air miles, rewards, or discounts on every single dollar you use it. Provided that you have the good spending habits in place, then it will be easy to utilize credit cards to benefit you fully.