Here’s All You Need to Know About Debt Consolidation Loan
So you’re struggling with multiple debts featuring high interest rates? Fortunately, there is a way to ease your problem and bring you back on the right track. Try consolidating your debts, and you can pay off your debts faster and with a single monthly installment. Now you won’t need to keep track of multiple repayments, which ultimately helps you manage your finance in a more subtle way. Well, here’s an example to make things crystal clear. You owe three bills – SGD 5000 on a credit card that charges 20% interest, SGD 2000 on an over draft with an interest rate of 25%, and SGD 1000 at 30% interest.
Let’s assume that you will clear these dues through monthly installments for next two years. If you opt to pay three installments for next 24 months, you will have to pay a total sum of 254.48 + 106. 74 + 55.91 = SGD 417.13 X24 = SGD 10011.12. But if you decide to act smart and take a loan to consolidate all your previous debts, you can save a considerable amount of money, and at the same time get relief from the stress and financial burden. For instance, you avail a loan of SGD 8000 with interest rate of 15%. All you need to manage is SGD 387 per month, which is less than what you used to pay earlier. Besides, you don’t have to track record of three installments, last repayment dates and other documentations. And at the end of 2 years, you pay about SGD 9290 and save a good amount of money. Debt consolidation loans are undoubtedly helpful, especially for salaried people who are struggling to keep up with the repayments of their previous debts. Usually, there two types of debt consolidation loans offered by moneylenders Singapore. First, secured loans where the lender asks for an asset or property to secure his money. In case you fail to repay the loan, the lender will take possession of the property. Second – the unsecured loans where you don’t need mortgage to get your money. Unsecured loans are offered to the people with good credit history. Things you should consider while taking a debt consolidation loan Benefits are apparent, but you should not be in hurry. Make sure you research thoroughly and make well-informed decisions. Availing debt consolidation loan makes sense only if –
The interest is less than what you were paying earlier The overall amount doesn’t increase You aim at reducing your expenses and getting back on track You feel that installment is within your budget The fee or charges for switching your loan is reasonable Another important suggestion is you should contact a reliable moneylender in Singapore. Discuss you financial status with an expert so that you don’t end up facing more problems. A number of moneylenders in Singapore offer debt consolidation services. Research online and find which one offers the most reliable and affordable services.