Every adult in Singapore is saddled with a loan or two. Whether it is a car loan, personal loan, student loan or a housing loan, if not managed correctly, the amount owed can and will snowball into huge debt that you will not be able to clear it immediately.
If you are in debt or struggling to make regular payments to clear your loans, this article is for you.
Set a 30% Increase In Your Minimum Obligatory Repayment
Your payments will not be reduced into less than a year repayment if you pay only the due amount per month. Paying what is beyond the given monthly due per month for at least 30% and more will give your capital and interest a grand slam reduction.
This might sound difficult, but the faster you repay your loan; the faster you will be debt-free.
Set Your Goals
When times get tough and the debts are more than enough, set your goals and aim for it. Don’t look at the total amount that you owe upon paying, but break that loan amount into parts and prioritize each part one by one. If it seems to be bearable, then dealing with monthly loans will be well-managed. Aim for clearing credits as fast as you can.
Repay The Loan With The Highest Interest Rate
Multiple loans will drain you in a year. Soon enough, you won’t have a single penny left and the interest is still scaling higher and higher. If it is just two or more credits, evaluate the one with the highest interest and clear it first. Remember, interest rates do get out of control. The more late payments, the less paid principal amount because all will be deducted from the interest.
Do Not Repay Your Existing Loan With Another High-Interest Loan
Some Singaporeans came up with the idea of borrowing an amount from other money lenders to repay their current balance from the previous moneylender. This will create a never-ending cycle. Instead of clearing your existing loans, you are creating new ones to roll credits over. It is a lose-lose solution. You should find another option that won’t land you in more trouble.
Communicate With Your Creditors
Make sure that you spare some time talking to your creditors about your loan and its status. When you missed out on a payment, see to it that you let them know the reason for your delay and assure them that you will pay for it as soon as you can. Disappearing and not returning creditors’ phone calls will result in legal actions taken against you. Rather, you can initiate a discussion to perhaps refinance your loan so that you have a lesser amount to repay each month.
Motivate Yourself To Be Debt-free And Remain Free
Setting yourself free from all financial worry is like a physical workout. It needs motivation, planning, consistency, and practice.
Set your mind to aim to be debt-free. It is easy when you know how to handle it. Don’t hesitant now and set yourself to be free of all debts in this year to give yourself a brand new start in 2018!
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