Having a loan in these modern times can be daunting for many people. There are many expenses to think about and most people are even having a hard time repaying their loans. Family budgets aren’t also enough to accommodate most kinds of loans. Are you encountering hardships in repaying your loans? If yes, then here are some important strategies that you can apply.
Know Your Financial Status
Many loan borrowers who suffered from unpaid loans don’t have an effective financial plan. This can lead to other potential problems, causing misery for years. You can begin the change by having a serious financial assessment. Once you do this, you’ll be able to see your monthly income and expenses. From there, it’s now possible to make room for your loan repayments.
Double Your Income
Nowadays, there are tons of extra income opportunities that you can take. Freelance jobs and projects are everywhere since the Internet has become more prevalent than ever. Doubling your income today is a matter of hard work and patience. The first step that you have to do is assess your skills. After that, search the niche for possible projects that you can do. Keep your work continuous and you can double or triple your income in no time.
Negotiate with Your Lender
The loan industry is all about negotiation and proper communication. If you can negotiate better rates with your lender, then that would be your advantage. Keep in mind that not all lenders will be open for negotiations. Additionally, if you can forecast that you won’t be able to pay ahead of time, you should communicate with your lender as soon as possible. Do not panic and try your best to emphasize your situation. There’s a fair chance that your lender may extend the payment terms.
Save a Portion of Your Income
Every month, make it a habit to save at least 10% of your income. This can be useful in the long term, especially if you can see yourself borrowing loans. Make sure that your savings account is untouched.
Repaying your loans shouldn’t be too hard if you are disciplined. So, understand the weight of your loans and plan ahead for repayment!
Applying for any type of loans can be a very tedious task for most people, especially if it is their first time to file for one. But it is a fact that there will come a time when an individual’s economic needs will bring them to apply for some form of financial assistance like a bank loan to cover unexpected miscellaneous expenses. They will however find it difficult especially if they have been financially independent for so long that they won’t know the first thing about applying for a loan either from a Loan Company, banks or other financial lending companies that can determine the rates and price of gold in Singapore. More often than not, most first timer who’s applying for any financial help usually taps conventional and conservative financial institutions to apply a loan with.
Rightly so because most conventional financial institutions like banks offers a variety of loans and although their policies are more stringent compared to other lending companies, their interest and repayment terms and conditions are friendlier to borrowers. The first thing to understand is that as a beginner, banks will be focusing on some key areas of your economic personality and this will mainly include your fixed assets, work and/or business income and your liquid assets that is currently available. It is important that you are ready with all the documentations that will support all of these areas.
However, as I’ve stated earlier, bank’s requirements are much more stringent so here are some financial tips that may be helpful to facilitate and hasten the bank approval for the loan. First after selecting the bank or financial institution that you would want to apply for loan, you need to study and see beforehand your preferred bank loan packages and if possible compare it with other packages offered by other banks. You need to know the type of loan to avail, repayment terms that suits you, and your estimated timeline in paying off the loan. Second, when you finally decide on the loan package, talk directly with the bank and immediately find out what their requirements are. Remember that although banks have similar functions, their policies and requirements differ and knowing this ahead will give you enough time to prepare all that is needed by the bank.
Third, always know your limitations. For any kind of loan you should always be aware of your credit history, score and rating. Remember that having a good and preferably an excellent credit rating will go a long way in having your loan approved. But if this is your first time to apply for a loan, there may be extra documents that the bank may require so you also must be ready for this. It is also to your advantage if you can already have somebody who will stand as a co-maker for your loan in the event that the bank will require you to have one. Finally, based on the requirements, documentations and other information given to you by the bank it would be wise to create a checklist for all of this. Remember that incomplete documentation may cause your loan to be denied.
There are various types of loans available in the Singaporean financial market today. This various type of loans is considered to be a big help in developing the country’s economy and raising the living conditions of many residents here. There are two general types in which loans in Singapore are categorized and these are the unsecured and secured loans.
Secured loans are those types of financial help where the borrower need to secure or cover the loan with some kind of valuable asset, such as a car, property or any other personal asset whose value is more or equal to the value of the total amount of money provided by the lender. The interest rate for this kind loan is usually reasonable and repayment terms are usually longer. Unsecured loans, on the other hand are exactly the opposite of secured ones where the borrower need not secure the loan with some form of assets. The interest rate for this type is a lot higher and repayment for the loan has shorter terms.
There are a variety of loan companies where one can get financial help in Singapore, and many of them provides both secured and unsecured financial assistance to loan applicants. There are conventional and conservative financial institutions like banks and financing companies. There are also various licensed money lending Singapore found around Singapore that provides short and long term small loans and other types of loans to various individuals here. All of them have their own loan policies and loan amount ceiling; interest rates and repayment terms. All one has to do is search the web for the right lending company and pawn shop in Singapore that would suit his needs.
Under the secured and unsecured loans are still a variety of loans that an individual in Singapore can avail of and they include the following.
- Personal loan – one of the most popular loan in Singapore. It has no specific use, but many take out this kind of a loan to purchase a variety of personal things. The loan can go as much as 4 months of your salary. The interest rate is fixed and repayment options are usually short. Personal loans are usually available in banks, and other licensed lenders.
- Payday loan – this is usually a small loan, but with high interest rates and needs to be repaid within the next 30 days or your by the time you receive your next paycheck. It’s easy to apply and qualify for. There is no credit check and the only document you need to submit is your proof of employment or business income. The loan is available in almost all parts in Singapore.
- Foreigner loans-basically for foreigners who has legal work or employment permit in Singapore. This type of loan is available mostly in banks.
- Business loans-these are funds provided to various businesses by different organizations, financial institution, private lenders and banks.
Home or mortgage loan-usually availed by borrowers to purchase home or to renovate one. This is normally a secured loan and is mostly available only with large and high financing companies and commercial banks.
The general rule in applying for type of loans in Singapore is if you need to choose between applying for a bank loan and borrowing money from a moneylender, it is for the best that you go with the bank. It is a known fact that in Singapore today you have three options by which you can procure financial assistance and these are applying for a loan from banks; from large financial institutions or FIs and the more common moneylenders. Moneylenders should be your last option.
These types of lenders usually provide only small loans and payday loan. As much as possible, try and stay away from moneylender (especially from unlicensed ones) because although most of them are allowed to provide loans, they may still put you into more financial problems because of the following reasons.
First moneylender is a loan company that usually charges very high interest rates. Normal interest rates for loans charged by banks ranges only from 6 to 9% per annum while the interest rate charged by moneylenders is a whopping 48% per year. A loan of around 5,000 dollars at 48% interest can go as high as over 24,000 dollars within the next five years. As a matter of policy and because of laws covering loan transactions in Singapore, moneylenders do charge legal rates, interest but what is questionable are the hidden terms and conditions that makes the interest rates much higher than they seem. For instance, the re-contracting fees that moneylender charges their clients are fees that allows them to repeatedly charge a specific amount for renewing the loan.
Second, loan contract provided by moneylenders are full of hidden charges. Administration, late payment and new transaction fees are just some of the charges incurred by the borrower. Third, some moneylenders use debt collection agencies to collect their outstanding loans. Big banks and other large financial companies are content to deal with recalcitrant borrowers by bringing them to court or by just denying them future loan.
Some moneylenders in Singapore use debt collection agents that usually embarrasses the borrowers by continually harassing them. Fourth, moneylender’s repayment schemes are usually very hard to comply with and most moneylenders don’t have payment outlet that makes it hard for the borrower to pay them. Fifth, unlike credit cards or standard bank loan, borrowers don’t get additional benefits from getting a loan from moneylenders.
However, Singapore like any other countries have their share of good and bad moneylenders. Not all moneylenders in Singapore are bad, but to be safe, there are ways by which you can avoid the bad ones and all you have to do is consider these following facts.
First honest and legal money lenders do not send SMS or perform telemarketing services; second, they do not perform online bank transfers; third legal moneylenders never ask personal detailed information over the phone; fourth, legal moneylenders have physical offices that you can go to and lastly legal moneylenders operate from registered local landlines. These lending tips should be enough for you to know which type of lenders you should avoid and which lending company to go to once you are in need of a good loan.
There are actually two general reasons why people need to have their homes or properties mortgaged. The first is to buy a property or a house where the individual’s available cash is not enough to cover the entire cost of the purchase or to have their existing property pledged as a security for a bank loan where the proceeds will be used for something else.
In short, a mortgage loan is used to purchase properties or to raise funds by existing owners to be used for other purposes such as to renovate a house or to purchase other real estate properties. There are two types of mortgage applicants and they are single individuals mortgaging their personal and private real estate properties and businesses that mortgages commercial solid assets like buildings and property lots. The Loan Company that usually furnishes mortgage loan is a conventional and conservative lending institution like banks, credit unions and other high financing lending companies whose specific function is to simply provide mortgage loans to individuals and businesses.
The usual features of a standard mortgage loan is the amount of the loan applied for, its maturity, interest rate, repayment terms and conditions and other various conditions stipulated and agreed upon by the lender and the borrower. However, one distinct feature of this type of loans is that the mortgage lender has priority rights over the secured property.
This simply means that other creditors of the borrowers will not have any right whatsoever on the mortgaged property in the event that the borrower do not make good on the loan obligations he has with his other lenders. However, in the event a bankruptcy and the property in question needs to be sold to cover the various loans of the borrower, the mortgage lender will have to be paid in full first before the borrower can settle his account with his other creditors.
In most countries, like Singapore, it’s a normal activity for most Singaporean to purchase properties and homes funded by mortgage loans. As a matter of fact, it is highly encouraged in the country. We have to remember that there are only a handful of people who would have the amount of funds or liquid asset to allow them to buy properties right away. Here in Singapore, where the demand for homes and properties are quite high, their internal market for home loans have been raised dramatically. There is one general rule to consider when you find yourself applying for a home loan and that is to learn how to get the best loan rates for the financial assistance you are applying for. For you to do this you need to consider these factors.
- Decide whether to go with a fixed or floating interest rate.
- How long should it take you to pay for the loan or what repayment plan will you be applying for.
- Remember that most lending institutions, especially bank has a fixed limit on how long they can give you a preferred interest rate.
- And finally that floating interest rate in Singapore is not pegged to the Singapore Interbank Offered Rate (SIBOR) and/or Singapore Swap Offer Rate (SOR).