It’s a great practice to save or earn the money that you need for living and expenses in Singapore. However, loans can give you a large cash outlay to do now what you’d have to save for years to be able to do. Also, there are other situations that just come out of nowhere, and you need a helping hand to get out. The following are times when a personal loan can be a great source of financing:
Consider that credit cards have the same credit limit as most personal financing options – two to four times your monthly income. But credit cards often have a higher interest rate, so it would make sense to buy out that debt with a lower interest loan. There are in fact loan packages designed by moneylenders for the specific purpose of debt restructuring. As you look for a loan, explain to the lenders what you’re doing and see what they’re willing to offer. Either way, you will likely be making great savings in the grand scheme of things than if you maintained a set of credit cards for your purchases.
Friendly loans can sometimes have the same connotation as ‘friendly fire’ coming from a soldier. They usually are one of the trickiest sources of financing. For the lender, it may be tricky to collect from a defaulting borrower with whom you have a personal relationship with. Forwarding the borrowers to a collection agency when push comes to shove is even harder and it could permanently sever the relationship.
As a borrower, you’ll maintain a record of repayments and so will the lender. What if the lender’s record doesn’t match yours? If you do qualify for a loan, it may be safer and easier to go with the professional lender rather than the friend, for your relationship’s sake.
If you lack capital for a small business you want to put up on the side, a personal loan may be a good place to start. Your chances of getting a business loan from banks are almost nil, since they lend to businesses that are a couple of years old or more. You can use the money from the loan to set up operations, as long as you’ve done your homework properly. If you have, your side gig might even take over and pay for itself in no time: win-win!
Sometimes you need money but you’re not sure about every aspect of the dynamic. Like if you have two different expenses and you aren’t sure when the funds for one will present itself. For instance, you have to pay school fees and renovate the house. You can take out a renovation loan, but that can only be used for the house. Even if you found some other way to fix the house, you can’t divert the money from the renovation loan towards your fees. But a personal financing loan allows the flexibility to change your mind, divide and divert as you see fit. Repayment plans are also negotiable.