In a pile of unresolved debts? You may wish to consider debt consolidation loan.
Debt consolidation is a form of loan taken to pay off many other consumer debts. This type of loan can be secured with collateral or unsecured. Multiple debts are pooled together into one large loan debt. Debt consolidation loan Singapore has a more favourable way for you to pay off your debt due to the lower interest rates, therefore, lower monthly contributions. These form of loans do not get rid of your debt; they just transfer all debt to a different lender as a lump debt. Many people in Singapore are currently under a lot of financial obligations of meeting day to day expenses as well as other urgent expenses like car loans, home loans, business loans and renovation loans.
Debt consolidation can be a good payment plan for individuals who may have challenges managing their different loan debt types they owe. The challenge faced by many Singaporeans is that the different loan debts they are servicing carry varying payment interest rates. This makes the tracking and control of expenses rather hard for them.
In Singapore, there are several credit unions that offer individuals a chance to access the consolidation loan facility. This loan type helps take away a lot of stress and financial strain and you are able to pay off all your debtors and focus on repaying a single loan amount. As you look for debt settlement options, below are pros and cons of consolidated loans that will help you in deciding whether this form of loan is best for you.
Pros Of Debt Consolidation
You only need to make a single payment. In consolidating all your debt, your monthly contribution is reduced to a single payment which minimizes the chance of late or missed payments. Additionally, by dealing with one creditor means writing only one check thus saving you a lot of time and energy.
In understanding the interest rates on other loans and credit card debt, an individual is able to consolidate their debt into low percentage rates, making it easy to pay down debt and truly make noticeable progress.
When consolidation loans are well managed an individual can end up saving some money in their budget instead of spending the entire monthly earnings on bills.
Since you only make one payment it will mean your monthly payout is lower. The interest rate is lower, making the loan repayment period less hence faster debt payment.
When a borrower is hardly making payments every month, debt consolidation loan will assist in your catching up on your payments and even getting ahead. This will help take off the financial stress off your finances.
Cons Of Debt Consolidation
There is the potential of getting into more debt. Having a single payment will mean more funds are available to you. For some individuals especially gamblers, however, it means having more to spend thus getting themselves further into more debt.
Even with the lower interest rates, there is a possibility of taking longer to repay your debt. This, in the long run, will mean you pay greater interest. In order to avoid this, you can stay focused and pay off your debt as fast as you can.
By failing to stick to your payoff plan, you might end up with more debt than before. In some occasions, some creditors agree to remove penalties and any added interests once you consolidate your debt. However, when you fail to make payments as agreed upon, the penalties and interests will be brought back.
Although a borrower has received some relief off of their finances, does not mean they have got hold of their spending habits. To avoid getting back in debt, the borrower can learn new money management skills which will go along way in cultivating better spending habits.
Where Can You Get Debt Consolidation Loan In Singapore
Singapore was one of the countries affected by the bad economy, which saw an increase of borrowers. Following the recession, many Singaporeans have been submerged in debt which they want to be paid off within the shortest time and at lower interest rates.
The introduction of the debt consolidation facility has been viewed by many as a God-sent intervention to help them pay off their debt. This debt repayment plan helps in tracking the monthly payments, which have been reduced to a single repayment amount. In addition, lower interest rates make the repayment period less than it was with the multiple creditors.
In Singapore, several financial institutions offer the debt consolidation loan facility. These include:
Singapore’s debt consolidation plan is designed to bring together loans that are over 12 times more than your monthly income.
Only Permanent residents and Singaporeans, with outstanding debt balances of 12 times more than their monthly earnings can apply for this loan facility.
If you decide to switch debt consolidation plan to other banks, you can only do so three months after the approval of your latest debt consolidation plan.
Once in a Debt Consolidation Plan, all your existing unsecured debts and credit cards are suspended. You will, however, be issued with a revolving credit offer corresponding to one month’s salary.
Like the banking institutions, moneylender’s debt consolidation plan is open only to Singaporeans and permanent residents.
You are required to be between ages 21 and 65
You are required to earning a minimum income of above S$20,000 per year
You are required to produce your identity card during application.
Debt consolidation loan in Singapore is a type of loan that combines all your existing loans in a single loan. The single repayment means you are able to manage your finances easily and even have some extra for your saving every month.
Debt consolidation loan helps you make lower monthly contributions with low-interest rates. This helps you only focus on one monthly contribution and thus have less financial strain. Debt consolidation loan Singapore helps negotiate with your creditors for penalties and interests to be removed, making your loan amount lower. In Singapore, banks and moneylenders offer this loan facility.