In this day and age, the bulk of our long-term ambitions is forever intertwined with the finances we have at our disposal. Are you looking to expand on the profitability of your business, invest in your children’s educational pursuits, or purchase goods and services that will make your everyday living a bit better? In such a case, like the vast majority of Singaporeans, you have likely, in the past, utilized the financial aid services left at your disposal, either by banks or by private lenders. But it’s quite easy to overdo it.
Are you currently in a precarious financial position, and you can no longer afford to pay the monthly payments associated with your current credits? Are you looking for a fast and efficient way to merge your existing debt into a singular payment, and perhaps even to reduce the lump sums you are expected to pay with each paycheck? In such a case, one of the best tools you have at your disposal, in Singapore, is to go for a debt consolidation loan.
Why a debt consolidation plan? It’s quite easy. If you have several unsecured debts, such as credit cards, or personal, long-term loans, a DCL can be a way to combine all your existing payments into a single monthly expense. Instead of worrying about three, four, or five payments per month, you will only need to keep track of one. Moreover, the conditions of the DCL will likely be more advantageous than the ones in place for your existing loans.
Why Not Lower Your Interest?
In our country, credit cards and unsecured loans can sometimes charge more than 20% per year in interest. In fact, according to the provisions of the Moneylenders Act of 2008, private lenders and conventional banks are only limited by a maximum interest rate of 4% per month, or 48% per year. A DCL, when it’s offered by a lending institution that follows the guidelines of the MAS, could provide you with a plan that will significantly reduce your total interest for the credit packages already contracted.
In other words, the total interest you are expected to pay over time will be lowered, and the repayment terms of the new debt consolidation plan will be better laid out. The consolidation of your existing loans into a new, singular payment should simplify your financial planning, make it easier to calculate the financial resources you have at your disposal, and can also be an efficient way to improve your existing credit score.
Multiple high-utilization credit lines can hurt your creditworthiness and make it harder to obtain the financial packages that your family requires. But if you consolidate your loans and pay your new financial obligation on time, your credit score should improve.
How Does a Debt Consolidation Loan Work?
A debt consolidation loan in Singapore can be looked at as a type of financial aid package in which you receive a lump sum that can cover your existing debt and replace it. The lender or bank to which you are applying will assess your total debt, decide how much you need in order to cover your financial obligations, determine your ability to follow up with the conditions of the loan and assess how long the tenure of the financial aid package should be.
If you are approved, you will receive a lump sum that you are obligated to use for clearing up your existing debt, and then, you will have to repay your new DCL via monthly payments that can last from a couple of months to more than two years. The key benefit of a debt consolidation plan is the ability to terminate high-interest loans that can compound over time.
Why Not Make Your Life Easier?
Let’s say, for example, you owe $15,000 across multiple credit cards that have an average interest rate of 25%. This is a lot, and if you can’t pay up your dues in time, it’s likely that it will become harder and harder to overcome your existing financial commitments.
A top-notch debt consolidation loan in Singapore might not exactly be that much more advantageous when it comes to total interest, but your monthly financial commitment should be reduced and the payment process for your existing debt will be simplified. Ideally, of course, you will have the existing resources to pay off your debt without external help. But if you don’t, a debt consolidation plan is the second-best thing available.
What Are the Benefits of Taking It from a Private Lender?
To start with, private lenders are more lenient with the conditions of their commercialized credit packages. If your credit score is low, you have missed payments in the past, or you are working as a freelancer, chances are that the approval process for a debt consolidation in Singapore, from a bank, will take some time, and in the end, it’s very possible that it will result in a rejection.
Private lenders in Singapore are more lenient when it comes to creditworthiness, can be a bit more flexible with lower-income individuals, and represent a solution for those who need longer repayment periods. Now, it’s not guaranteed that they will approve your application. But your chances are greater than they would have been if you applied for the services provided by a conventional bank.
A More Advantageous Long-Term Solution
With a private lender, approval for the debt consolidation plan can sometimes come in less than twenty-four hours, and once you sign the contract with the lender, the money will be disbursed into your account on the spot.
The documentation involved is also simplified and the information you need to make a decision will be available online, on a dedicated platform. Simply put, while the interest rate associated with the loans of private lenders can sometimes be greater than what is offered by conventional banks, the convenience of their services is hard to beat.
Do you want a cash infusion, and do you need it now? In the past, have you been refused by your local bank, and are you looking for a fast way to consolidate your current debt into a single payment? In that case, there really isn’t a better solution than the services of a private lender.
