If you want to get a loan that you can easily manage, lowest rate personal loan singapore may just be the right one for you. Its usual term is that you can pay the debt with a fixed amount and remit the same every month. However, there are things that you should seriously consider before taking out this type of CREDIT. Personal loans are usually offered by traditional lending institutions such as a bank. Referred to as an unsecured loan, they are one of the easiest to apply to and get approved. The following are just some of the pros and cons when taking out a personal loan.
Personal loans allow the borrower an amount that can be larger than what credit cards can offer. Repayment terms and conditions are quite manageable considering that you can pay back the loan with a fixed amount and on a monthly basis. This is quite advantageous, because you can easily budget your income to include the loan payment as an extra expense each month. Most best money lender in singapore offers a fixed interest rate on your loan giving you an easier time paying it back. You can even negotiate with the lender on how to pay back the loan. You can go with the monthly amortization plan or one time payment of the whole loan on its maturity date. Another Good use of a personal loan is you can use it to pay off several of your debts. This will allow you to manage your debts better considering that you’ve consolidated it into one. You will therefore be paying interest for only one loan unlike when you were managing several.
Since personal loans are normally unsecured, you may incur a much higher interest on your loan. However, you can remedy this by converting the personal loan into a secured loan. Because personal loan are easy to access, you may be tempted to take out a larger amount than what you’ve initially wanted. This can be very dangerous and may put you in a bad financial situation. Finally, most personal loans have a minimum limit and its payment term (if amortized) cannot be less than 12 months.
Credit Unions are nonprofit financial institutions whose main goal is to help out its members manage their financial savings and at the same time help them from any financial crisis through low interest personal loan. Credit Unions are forms of cooperative or community organizations managed and operated by its members.
Characteristics of a Credit Union
Only members who have common bonds can create and be members of a credit union. These members are the only ones who can get access to its financial services. Common bond mean that the members all live on the same residential area; work for the same company or belongs to the same trade union; are members of the same religious sect or belongs to the same professional organization. Credit unions are not out to make a profit but the little money they make is to help out members with their savings and financial difficulties. Credit unions can be large or small. Their members vary from hundreds to thousands depending on their financial service capability. Like any other financial institutions, they are bound by financial laws and regulations mandated by both the local and federal government. Their only difference from the traditional financial institutions is that they are only allowed to serve the members of the union. Its main objectives are to provide the members low interest loan, encourage them to regularly deposit money on their savings, and to manage the same efficiently. These goals aim to show that credit union only works for the interest of their members. They act as money lender to their members but they also protect them from being in a bad debt situation. The loans that they give out have interest caps, meaning that they can only go as high as a specific interest rate and it is usually way below the normal rate given out by traditional banks.
Paying off the Loan
Paying off loans from credit unions can be done by paying directly at their office; by debiting the amount from the member’s savings; through salary deductions; and through accredited payment centers.
Today, it is not uncommon for an individual to be paying off more than one personal loan. Utility bills and other common daily service related expenses can also be considered as some kind of a debt since these are paid off usually at the end of each month or on its cut-off date. Since all of these can be considered as loans, it is therefore necessary for an individual to manage them effectively and efficiently to avoid problems that may arise in case of a default in paying off these debts.
Prioritizing Your Debts
Prioritizing your current loans is the best way to manage and control your debts effectively and efficiently. If you reach a situation where you are starting to struggle in paying off your loans on time, the best thing to do is to try and divide your payables into three categories namely priority, non-priority and emergency debts. Priority debts are loans that possibly will incur very serious negative results if you are not able to settle. These debts do not necessarily involve large amount but they may result in serious problems such as a court suit. Priority debt normally include non-payment of utility bills, mortgages, secured loans child and alimony support and other debts that may take you to court if not settled immediately. Non-priority debts on the other hand may include bank overdrafts, personal loan, money borrowed from friends and families and credit card account balances. These types of debts may not incur serious problems since they can be dealt with by simply communicating with the lenders to give you more time to come up with the payment. In loans like these, the lenders are usually flexible in allowing the borrower to come up with the payment at a much later date. Emergency debts are the most serious type because if the loan is not paid at the soonest possible time you may end up facing a lawsuit or any court action; a visit from the bailiff foreclosing any of your properties; disconnection of services like light, water and gas and eviction for non-payment of mortgage or rent amortization.
Borrowing money can be a two person job. Husband and wife or other couple can take out what a money lender would call joint debt or loan. However, just because two signatories are on the loan, responsibilities on its repayment terms and condition are not split into two. Both Parties shoulders full liabilities on the loan. This means that if one of the loan partners defaults on the loan, the one left will is fully liable in paying off the debt.
Types of loans that can be taken jointly
There are generally three types of loans that can be taken out jointly and these are Secured loans such as a mortgage; line of credit for couples with joint account and unsecured loans like a personal loan.
Main Condition of a Joint Loan or Debt
When couples take out a joint loan agreement, they must fully understand that both parties agree to the condition that they are fully liable for the loan and that if one would be in default in paying off the debt the other agree to shoulder the entire loan. This is what they call “joint and several liability” clause. In a joint loan, it does not matter who spends the money or who owns the property from which the money was used. It will not make a difference whether the couple are married, in partnership or have no relation at all. As long as both their signatures are on the loan agreement, both are liable for the whole loan. For instance, if the loan was taken out by husband and wife and for some unfortunate reason one of them dies while the loan agreement is still in effect; the one who is left behind will have to shoulder repaying the amount left on the loan. Of course it’s another story if both of them die while the loan agreement is still in effect.
There is really no proof that couples would have a better chance of landing a loan but the sure thing is that couples can better manage a cash loan singapore than one person can.
It is something amazing if for the past several years, you have stayed debt free. But every one of us sooner or later will need to borrow some money to either tide us over or to cover cost of some unexpected expense. If you haven’t had the chance of borrowing money from a licensed money lender singapore review, let me educate you on the basics of applying for a loan. Even in applying for a credit card, there are basic protocols that lending institutions follow before giving you one. The first thing you need know is lenders take very high importance on the credit rating of a borrower. If you’re a first time borrower, you will need to build a credit history in order to get a loan.
What is a Credit Rating?
Credit ratings show whether a borrower is a good or a bad credit risk. Your credit rating tells the lender whether to approve your loan or not; the amount of money he can loan you and the interest rate that he the loan amount can incur. Credit score is generally based on the borrower’s past credit dealings. Credit history will show how well you’ve managed your debt and how many times you have taken credit. If you’re a first time borrower you will have no credit history to speak and there will be no way the lender can decide whether to give you a loan or not. Therefore, in order to borrow money, you need to start building a credit history.
Start Building Your Credit History
The first thing you need to do to create credit history is to open and manage a current account with any banking institution. Put a modest amount on the current account to make sure that the checking account is fully covered. This initial step will be proof of a good relationship between you and the bank. Next, open a debit card account and use this to pay your utility bills and all other expenses. Using debit card will help boost your credit rating especially if you don’t incur late or missed payment on any of your expenses.