Saving money is the best skill any individual, especially Singaporeans, can possess. Anybody who learns practical, money-saving habits can carry over its principles and achieve their life goals.
However, some situations limit the time we possess to save enough money. In this light, a personal loan is the most convenient solution during periods of varying emergencies.
Here are ten ways a personal loan can help you:
1. Debt Consolidation
All borrowers strive to meet all their scheduled payments. Unfortunately, a few bad days can spell doom for any existing financing. Many Singaporeans get into deep debt with poor credit card and loan usage. Furthermore, many mismanage their first-year zero-interest loan, leading to poor financial situations that become utterly difficult to escape.
However, if six months of your monthly salary can handle the full repayment of your existing high-interest debt, it will be best to use a personal loan to prevent it from ballooning. For example, using a licensed moneylender’s personal loan service automatically grants you zero-interest first-year payments, allowing you to pay a loan that increases with double-digit interest completely and recover financially.
It’s easy to get lost tracking all your expenses, especially if you’re living with extended family members or financing the educational fees of multiple children. When your budget goes off-the-rails, you’re highly likely to encounter financial emergencies. For example, you had to de-prioritize paying for your car financing last month due to imminent educational fee payment.
To avoid high interest on your car loan, you can get a personal loan and avoid higher repayments and penalties. In most cases, a six-month salary personal loan can handle your emergency expenses for utilities, loan repayments, and credit cards.
While licensed moneylenders offer payday loans, they aren’t the most practical choice unless time is of extreme importance than the monetary amount. Example: you need your monthly pay to address your current bills, but you find it impractical to take out a six-month loan figure. A payday loan helps this situation, especially if your employer delays in paying your monthly salary.
However, if your situation requires more than just a single month of your pay, using a personal loan is the best option. Don’t take payday loans because the requirement is easier, especially if you’re eligible for a personal loan. Having a 12-month interest-free period gives you much more time to pay back the financing too.
The best wedding examples you and your fiance had found in social media all involved an enormous sum of cash. However, if these examples fit both your idea of a perfect and worthwhile wedding, it’s worth saving money to achieve it.
Truthfully, wedding expenses are easy to handle if couples can handle budget-scheduling and expense-tracking efficiently. Plus, they have the time to save enough money for their grand wedding. On the other hand, it doesn’t hurt using a personal loan to serve as an expense buffer during the most crucial wedding periods.
As with all things that involve planning, anything that can go wrong will go wrong. With a personal loan, you have a convenient six-month-salary figure to help you even out some expenses you never expected.
5. Home Renovation
Moving to a new HDB flat or condominium is exciting. However, some properties have better infrastructure maintenance than others, making it critical to have enough cash to revitalize existing utilities and facilities inside the property. The HDB concessionary loan will not cover your renovation costs, and you can say the same for banks.
However, banks and licensed moneylenders can provide you a personal loan to serve as your home renovation fund. You can use your six-month-salary personal loan to cover all your renovation costs. You can even use it to renovate rooms and facilities if six months of your salary can handle everything you need.
6. Moving Costs
Moving out of an apartment, condominium, or rental property is much more involved than most Singaporeans and foreigners in-country might expect. This fact is much more significant for extended families moving out from leased properties. Moving from one property to another requires a transport truck and a team of lifters to move your items.
Alternatively, you’ll need some cash to restore and sell your undesired properties at higher value through the internet. Furthermore, you’ll need to pay your new landlord their advance payments and securities. On average, anybody with a personal loan equivalent to six months of their pay can handle all moving costs with minimal additional expenses.
7. Appliance Purchase
You’ve just moved into a new neighborhood, and your room needs new furniture. Unfortunately, it’ll take a few more years until you can finance everything you need. A personal loan is enough to help you pay the total cost of 2-3 appliances or furniture simultaneously. This financing is helpful, especially if you need to buy critical items such as refrigerators, stoves, beds, and extractor hoods.
Truthfully, appliances are the biggest, essential expenses for new tenants. However, some will choose discomfort over having to pay personal loans by saving money. Appliances are living essentials, making it essential to use a personal loan to have everything you need to get started.
8. Vehicle financing
The open market value (OMV) of vehicles in Singapore changes yearly, making it an unpredictable year to purchase your first new or used vehicle. Honestly, many Singaporean car dealers can make it convenient to own a vehicle, but at higher in-house financing costs. In this light, personal loans are your best alternatives.
Bank loans can make vehicle purchases more affordable than in-house financing. On the other hand, you’ll still have to deal with immense paperwork. If you feel that six months of your salary is enough to pay for your entire vehicle purchase in-house at lower or friendlier interest rates, then we highly recommend you use a personal loan.
9. Vacation expenses
Planning a vacation is challenging because you’ll have to get the timing perfect between your savings and vacation package availability. Making an individual travel itinerary makes this trouble much worse because of time-based discounts and other available promotions. However, with a personal loan, you can take advantage of all these discounts and get your vacation up and running immediately.
A personal loan is much better than using your credit cards or other short-term financings to cover your expenses. Truthfully, despite its interest rates and commitments, we’re confident that personal loans are better than saving money because you can pay for your six months of monthly salary within a single year with minimal additive interest.
10. Starting a small business
Like vacation financing, all your business plans will require re-drawing if you fail to take advantage of opportunities presenting themselves to you. You can save up to six months of your monthly salary as you use your savings to start your business or use a personal loan to use as a safety net.
Starting a small business is a challenging venture. However, if you have a safety net with a fixed interest rate and loan processing fee, you can make the best growth-based decisions for your business. Using a personal loan to cover your expenses allows you to take on full growth potential too.
If you can pay back your entire loan within the 12-month loan term, personal loans will always be a good idea. Anyone dealing with a time-sensitive situation requiring immediate financial aid is in their right mind if they plan to use personal loans. You won’t need to save up for six months to grab an investing opportunity with personal loans.
Working with licensed moneylenders is truthfully a huge plus because you’ll always have fixed interest rates and loan processing fees. Your loan becomes easier to manage in this light than those issued by banks and other financial institutions.
If you’re planning to use a bank or financial institution and their personal loan services, it’s not a good idea to take on additional financing if you have below-average to junk credit scores. Anyone with poor credit scores is highly likely to take on high-interest rates due to personal loans’ unsecured nature.
On the other hand, banks and financial institutions may present you with a personal loan collateral option. However, make sure you have the best capacity to pay back your future financing. Failure to pay will lead you to lose equities or entire properties.
Licensed moneylenders are the best options for personal loans. While they might not offer stellar amounts from banks and financial institutions, money lenders can provide you personal loans with a maximum interest rate cap of 4% and loan processing fee of 10% or S $60.
It’s easy to apply for a personal loan with banks and financial institutions.
- You can use their product portal to head into their respective application page.
- Next, you’ll need to fill in confidential information, which you can safely provide because banks always have secure delivery systems. Additionally, they cannot divulge your information as per the rule of law.
- Lastly, you can use the same portal’s tools to upload all the documents necessary to prove your eligibility. We’ll list them in full detail below.
- Banks are highly likely to notify you about your loan application results within 2-6 weeks. If you involve any form of collateral, the evaluation process might take longer. Credit investigators need to interview individuals and verify your declared collateral and other assets to continue.
On the other hand, licensed moneylenders can approve your loan applications in just one hour after you submit all the requirements proving your eligibility and establishing your income. However, they’ll ask you to go to a physical branch to claim your money.
To apply for a personal loan, Singaporeans and foreigners have the fulfill the following:
- 18 years of age and above upon applying
- Earning S $1,500 for Singaporeans and permanent residents, S $2,000 for foreigners
Proving your eligibility requires the following documents:
For Singaporeans and Permanent Residents:
- Identity card / NRIC
- Proof of residence (utility bill, a letter addressed to you, and/or tenancy agreement)
- Proof of employment (certificate of employment or 3 months recent payslip)
For foreign workers in the country:
- Work Permit / S-Pass / Employment Pass
- Proof of residence (utility bill or tenancy agreement)
- Proof of employment (certificate of employment or 3 months recent payslip)
- Proof of income (bank or account statement)
Do not limit yourself to the existing promotions and financial offers you see at face value from banks and moneylenders. With numerous loan comparison websites in Singapore, it’s easy to find the financing perfect for all your needs.
For example, Moneylender Review gives you access to loans and financial products from top licensed money lenders across Singapore.
Their advanced algorithms can help you find financing that matches your income, desired loan term, and payment amount by using their simple search filters. Research is vital in achieving success with financing, and using loan comparison websites make research the easiest.