Reasons Why Singaporeans Take Out Personal Loans

Most Singaporeans have been brought up with the belief that loans can be bad for a person’s finances. Nonetheless, it is good to bear in mind that a personal loan can be useful when used wisely. By choosing the most suitable personal loan, you can strengthen your finances. This can be the result when you use the loan in a smart manner.

You could also even enhance your personal relationships. If you have ever found yourself wondering what you could use a personal loan for; below is a list of 10 practical reasons why you may want to apply for a personal loan.

Avoid Making Insurance Claims

If you have an insurance policy, then you most likely have read through the fine print before you put your signature. In Singapore, there are insurance policies that offer bonuses to individuals who don’t make claims within a given period. Some insurance policies, on the other hand, limit the number of claims for a given period. When the claim is a minor one, some Singaporeans opt to apply for a personal loan. This way they avoid making an insurance claim.

You can never tell whether you might have to make a claim for a more serious issue in future. Getting a loan may also assure that they receive a bonus for not making an insurance claim.

Keep Your Savings While Making A Huge Purchase

Assuming you have S15, 000 saved up for a splendid family holiday in Bali. This money may not all be used for your family getaway. This is considering that an emergency could happen during the vacation. If you have by now used most of the savings, then taking a loan may just be what you need to do. You can then pay back the loan in instalments to have the surety that you have your savings. Savings give you peace of mind and in spending it all may make your financial situation little shaky.

Purchase Of Wedding Rings

As an alternative to using a credit card for the purchase of wedding rings, you can opt to use a loan instead. This is because credit cards will charge you very high interests. You could choose instalments as a way to repay your credit card. But when you fail to pay the monthly amount, it will definitely affect your general financial situation. You can apply for a low-interest personal loan. Moneylender’s personal loans have an interest rate limit of 4%.

Avoid Using Credit Cash Advance

Most credit cards offer a cash advance loan facility. This allows you to withdraw a given amount charged to your card’s credit limit. This means instant cash for you but it comes at a high price. The money you withdraw is charged an interest rate and a processing fee. The amount also attracts an interest which is charged each day until the credit amount is fully repaid.

You Can Help Your Family And Friends

Matters concerning money among close friends and relatives can prove to be a tricky issue to deal with. During times of emergencies like a medical emergency, your financial help may be needed most. This is especially true when you have a close-knit family. However, relatives and friends tend to offer many stories when they do not repay the money they borrowed. When this happens, you are more likely to be low on your savings. In addition, the relationships will also be broken. For this reason, you need not gamble with your savings. For you never know when you may have to deal with your emergency.

Getting a loan may be an easy option and you can easily repay the instalments. Then you can lend your friend or relative the funds. In this case, you get to save your savings. Also, let your friend or family know that you got a loan for them. This tends to give them the push to repay back the amount they borrowed from you.

Debt Consolidation

When you have multiple credit card credits, you can take a personal loan to take care of the debt. This also ensures that you do not keep tabs on several due dates. Instead, you work with a single due date. Using a personal loan you are able to fully pay the credit card debts. And you do not need to get an additional card for balance transfer.

Home Renovation

Banks often times are the ones that offer home renovation loans. Even then, when you have a minor renovation you want to do, you can settle for a personal loan. And again, if by now you have used the renovation loan, then a personal loan can help you finish the work. This may be better instead of leaving parts of your house half-finished.

Late Payments

There are workers who receive late payments in spite of the firm regulations set by the Ministry of Manpower. This means a personal loan can help close the financial gap. This is better than starving while you wait for your salary to be deposited late in your account.

Time-Sensitive Purchases

Assuming you have been saving for an item you have wanted to get. And then the item suddenly goes on sale yet your savings are not yet enough. You can choose to take a personal loan to help you acquire it.

Avoid Borrowing From Family And Friends

Many Singaporeans value their pride. They are more willing to take short-term loans than to ask for help from their friends and family. A personal loan can be used to lend to friends and relative, for paying bills and for daily use before the next payday. This loan type is flexible and multi-purpose.

You, however, need to be very smart when deciding on the most suitable personal loan. Moneylenders provide fast cash loan. The vast experience gained over the years ensures some lenders are better able to understand your needs. The needs of people have become rather dynamic therefore personal loans need to be easily accessible. Many moneylenders in Singapore strictly operate independently and client’s information is kept completely confidential and is not distributed.