One Big Reason Why People Get Into Debt – Overspending

There are so many things to pay for, and so little money. You have your utility bills to settle. You have medical bills to take care of. You recently lost your job, and you are striving to make ends meet. You recently lost some money betting on a soccer match. You may think that all these things are what is taking a huge chunk out of your savings. You may feel that keeping up with these things is what is getting you into more debt. Maybe that is the case. However, if you look closely at your expenses, you will realize something else. The real culprit here is that you are overspending.

In this day and age, overspending is not a strange thing. There are so many ads out there crowding your mind with new things to buy. It seems every week there is a new game, app, or gadget in stores. You may not need them, but you just have to have them. You go grocery shopping and you come out with clothes and self-help books. Zero groceries.

Many Singaporeans have a problem with overspending. Overspending gets you into a lot of debt. To get out of it, you look for ways to get more money. You visit a moneylender for a payday loan or personal loan, hoping to clear your debt. You go and spend it all on things you shouldn’t have, and the cycle continues.

What are those things that are making you overspend, and how can you deal with them?

Reasons Why People Overspend

  1. Where You Are Can Make You Overspend

There is a form of psychology to the way items are arranged in a mall. For instance, most stores keep the dairy and fresh produce in the back of the store. To get to them, you first have to walk through aisles of other items for sale. This is not a coincidence; it is done on purpose.

The goal is to make you purchase more than you initially planned to. And what’s more, a lot of people fall for it. You end up buying more, in the long run to the benefit of the mall.

Another mental trick malls or supermarkets use is music. Music works on a subconscious level, influencing your choices. Music influences shopping habits a lot. A good example is the malls during festive periods. Christmas, Thanksgiving, New Year, Halloween, the lot of them. The music played in stores at those periods nudge you to purchase things appropriate for the season, planned or not.

If you truly want to kick the habit of overspending, you have to go shopping prepared. Make a list of what you need and take it with you. Buy only what is on your list, and nothing else. Your pockets will be better for it.

  1. The People with You Can Make You Overspend

Your peers, friends, colleagues, even family members, are another reason for your overspending. There is this urge that humans have that makes them want to fit in. You want to be like your friends or your successful sister who just came into town. This kind of thinking leads to overspending every time. You could have friends that have deeper pockets than you do. When you hang out, you feel you have something to prove. So you pay for all the food and drinks. Sometimes they even take you to a hangout that is way above your pay grade. But you cover the bill all the same. Trying to live above your means will put you in debt faster than you can think.

Be true to yourself, and to the people around you. If your friends want the expensive places, tell them you can’t afford that place. If they insist, make sure that they are paying for you. Taking a payday loan just to be like your friends is not a wise move. Stick with what you can afford.

  1. Credit Cards

Singaporeans tend to abuse their credit cards. You may think that there is unlimited purchasing power on those plastic cards. You couldn’t be more wrong. Credit cards are great in a pinch, but they can make you overspending. Constantly maxing out your credit cards is not a good way to live. That could earn you a bad credit report. Banks will refuse to give you loans with a bad report. A moneylender would be your best bet, but taking a personal loan to settle your credit card debts is not advisable.

If you are the type to max out your credit cards, don’t use them. Take cash with you to pay for stuff. You will be less tempted to overspend since you actually know how much you have on you.

Ways to Stop Overspending And Avoid Debt

If you can stop overspending, falling into debt will be a foreign thing to you. Some ways have been mentioned earlier, such as using cash and making lists of what to purchase.

Other ways you can stop overspending and avoid debt include:

  • Budgeting
    Always budgeting your income will prevent you from compulsive spending and debt. When you get your income, there are three things you need to budget. These are your savings, your expenses, and your emergency fund. Once these three things are all accounted for, you will be conscious of your finances.
  • Paying For Things On Time
    If you have payments to make, do so once you have received your salary. Always make sure that you pay the minimum balance on all payments. The path to being debt-free is paying them off as soon as possible. The more you are procrastinating your payment, the likely you will let your debt roll into next month.

Sometimes, taking a personal loan or payday loan is inevitable. In that case, make sure you discipline yourself to repay it in full and in the shortest time possible. Meeting a licensed moneylender to get a loan will get you low-interest rates, so paying back shouldn’t be a problem. Just make sure that you don’t spend most of it on unplanned things.

How To Effectively Keep Your Credit Rating Healthy

Your credit score standing will greatly affect your future as a borrower. It is thus helpful to know factors that make up a good credit rating. When you apply for large loan amounts from financial institutions, they always do retrieve your credit records. This way they get to see your loan history and whether you fully paid your loans.

Financial institutions interpret credit scores differently. Most banks and lenders base loan approvals, loan amount and at times interest rates on the credit rating score. Note: credits held in other countries, will not be considered.

The Credit Bureau only keeps records of your credit history. However, it’s up to you to keep it in good shape. It also depends on the lender on how they interpret it for your loan application. Still, there are instances when a person will not have their credit score graded. This can occur when you have no credit history, past or recent bankruptcy record, have all accounts however they are closed, thus the history only shows your Credit Applications.

What Happens If Your Credit Score is Bad

Your loan application may be rejected or the moneylender offers you a lower loan amount. Let’s say you need a certain cash amount for studies, your business or health issues. You may not be able to get the loan. Also, there are employers who may use your credit history. Such are in the fields of law, politics, and finance. They, however, may not be able to retrieve your records but they may ask you to get them a copy during interviews.

What Can Lower Your Credit Score?

Having Several Credit Accounts

Even if you have got small credits from different credit cards since you have multiple shows a red flag to potential lenders. Closing all the accounts may not be helpful either. Keep 1-2 accounts and ensure you repay on time.

No Credit History

A no-credit record will reflect ungraded credit. Because there is nothing to evaluate, the lender may not know whether you are a low or high-risk type of borrower. This creates a problem since lenders typically refuse to approve large loans amount for to individuals who have an unknown risk. It’s better you open a loan account ensure you repay the loan.

Several Personal Loans Within Short Periods

Whereas having no credit record isn’t good, you had many loans accounts is also a bad sign. It will make you seem financially desperate. This generally happens to individuals who didn’t know they had applied for inadequate loans. Make sure you assess all costs before taking a loan. This way you will make an informed decision. It can happen that a person has to take a loan to make a repayment. Use a loan calculator to make accurate estimates of the amount of repayment is feasible for you. This way you will avoid taking a personal loan for you to repay an existing loan.

Many Loan Applications All At Once

While some people think it better to apply for several loans at once, it is advisable to just choose the best fit for your needs. Having many loan applications will not reflect nicely on your credit ratings. You will appear too needy when asking for loans. Before applying for a loan, shop around and make comparisons on interest rates of different loans for you to know the one that’s best for you.

Late Repayments

Moneylenders have to record your payments, thus late repayments will reflect on your credit history. When you do not repay your loan diligently, then this shows your future lenders as a high-risk borrower. When you know you will be late to meet your loan obligations, don’t hesitate to let your lender know. They are always helpful and will readily adjust the repayment period.

Bankruptcy

You may clear the bankruptcy status, yet it will continue to reflect for the next five years. This will prevent you from accessing loans that you want to take out.

Defaulting credit

When you time after time fails to pay your debt, it will be taken for a loss. Failing to repay your loans may seem an easy solution for big loans, but it will show in your records. it will very much pull down the credit score and your hopes of ever getting new loans.

How To Have Healthy Credit Ratings

Do Not Make Successive Loan Enquiries

Avoid getting the credit-hungry label. This you can avoid when you do not make multiple loan inquiries. Some people who badly need money approach various moneylenders to get loans. This often looks bad to potential lenders since they will also see the many inquiries in the credit history. If you should take a couple of loans ensure you do so at intervals. Don’t try getting a home loan and a personal loan for when you realize more cash is needed for down payment.

Diligently Repay Your Loans

Don’t ignore the payment reminder letters from your moneylender. Moneylenders are ready to assist you to adjust your repayment terms when you tell them about your status. This is better than hiding and later defaulting. When you know you won’t make a payment for the next scheduled repayment, inform your moneylender ahead of time.

Take Small Loans And Ensure You Repay Them

When your credit rating is bad you can repair it by taking small loans and then repaying them diligently. It may take you some time, possibly 1-2 years, but in the long run, you will be able to take out higher loans. You can start by taking a loan of S$500 and not worrying about the credit score. However, do expect most moneylenders to charge a higher interest on the amount.

Don’t Fail To Repay Your Loans despite the Amount

When you fail to repay all your loans, you may never get another loan. It may even be impossible for you to obtain a car, home, or student loan. When you let yourself get caught in the debt cycle and you imagine it is impossible to repay all your debts, you may consider having your debt reconstructed. You can contact your credit counsellor to help with this.

5 Things To Watch Out When Taking Up A Personal Loan

When you find that you are short on cash. And you urgently need a certain amount to bridge the financial gap, taking a personal loan can be a great help to you. Singapore has several ways in which a borrower can access money loans. These ways range from the banking institutions, licensed moneylenders and even the use of the credit card to get a short-term line of credit.

Even as most Singaporean borrowers only focus on the loan costs, there are several important points they also need to take note of. This they need to do before they decide to take any loan type. The list below gives some of the things a borrower needs to watch out for before taking a personal.

Fees and Charges

One thing borrowers need to understand is that banks and moneylenders are businesses as well. Thus there is never any logic for them to lend you money that does not attract any charges. Thus, for the 0% interest advertisements mean that you will be paying the fees in a different way. This is more often than not through what is known as an origination or processing fee. It is important for you to note that the origination fee is often times deducted from your approved loan.

The processing fee often will cost you 2 – 3% of principal loan amount. There are other fees you need to take note of. These fees include charges on change of the loan tenure, late repayment fees, cancellation fees and also early redemption fee. The early redemption fee is only charged when you choose to pay off your entire loan much earlier than scheduled.

Interest Rates

When you are searching online for personal loan offers, you may end up getting confused by the many different interest rates that banks apply to price the loans they offer. Most times, you will see at least two different rates of interest. That is a nominal and an effective interest rate. And you will also notice that this former interest is generally lower than the second interest rate.

It is important to always remember to apply an effective interest rate (EIR) when you are comparing the different loan offers from the Singapore banks. The effective interest rate mostly takes into consideration all the compounding period and also the application fees.

It will then give you a better measure when you make a comparison between loan rates across the many different providers. Even then, do not forget to factor in the annual flat rate charged on loans. This will be what is needed in order for you figure out the amount of money you have to repay each month to the bank.

Therefore, it is better that you confirm your monthly budget. This way you will be able to know if these monthly repayments will be made without bringing you any financial strains in each month.

Your Credit Score

You can practically get personal loans quite fast in the recent times, with a few banks and licensed moneylenders promising to approve your loan in less than 24 hours. Nevertheless, this is only based on assumption that a borrower has an outstanding credit record. And this gives licensed moneylenders and banks no reason why they will reject your loan application.

Hence when you want to receive your loans approved easily, and then ensure that you have a minimal bad credit history. This also includes frequent late repayments of your bills and debts. Also, ensure that you have not sent several credit applications within the same period of time.

Borrow Depending On The Loan Purpose

If you have ever wondered why so many loan types exist when you are able to just take personal loans to meet your needs. When that was the case it means that a study loan can be replaced with a personal loan for paying your college tuition fees. And better yet have balance transfer loans to repay the credit card debt.

It is for this reason that particular loans are planned with a purpose in mind. And in most cases, the loans interest rates turn out to be much more competitive when compared to using personal loans.

Another main difference is in taking a loan for a specific purpose. This way you can get a lump sum to use as per your wish.

Minimum Loan Tenure

Most Singapore banks will require you to borrow a minimum period of 12 months on a personal loan. This is regardless of your ability to repay the $10,000 loan within 6 months. This ensures that lenders get an interested fee from a borrower. When you pay off a loan early will cause you a pre-payment charge. It is for this reason that borrowers who are looking to get personal loans need to consider the different options available when they are in need of cash.

For example, assuming you need a small amount like as $3,000, to pay off one-time hospital bills. It is not the cheapest choice for you to get a personal loan which you will then repay it within 1-year tenure. In fact, using a credit card can prove to be the better option for you instead.

E.g.: Total cost of a Personal loan of $3,000 for a 12-month period:

Principal Loan amount: $3,000

Processing Fees: 2% = $60

Yearly Flat Rate: 15% a year = $450

Monthly installment = $288

Total Loan Cost: $$3,510

Total Costs of $3,000 when using a credit card for a 3-month period:

Principal Loan Amount: $3,000

Annual Flat Rate: 25% a year = $188

Late repayment charges: $60 a month = $120

Monthly payments: $850

Total loan cost: $3,308

From the above calculations, it is clear to see that costs of making use of a credit card are lower. And this is only when you can repay a larger monthly payment for you to clear your debt much faster. Although a personal loan is used as a financial tool for bridging a financial gap before your next paycheck, do your research to make sure you get the best deal possible by making comparisons and reading our reviews on the list of approved moneylenders.

What You Need To Know About Qualifying For A Personal Loan

Taking loans in Singapore isn’t an unusual thing. However, many people still don’t know how these loans work. If you are one of them, you have come to the right place. There are different types of loans, depending on your need and ability to repay them. If you need money to buy a house, there is a loan for that. If you need money for medical bills, there is a loan for that too. If you need to borrow some cash to repay with your next salary, you will still find a loan for that.

Another thing people don’t know is that there are different places to get loans. Yes, you don’t have to keep asking your parents or that distant cousin for a loan. And no, not only banks give loans. You can go to a licensed moneylender in Singapore to get loans. A licensed moneylender is vetted by the government and can give you cash instantly. The interest rates are also low, and you don’t really need collateral.

A personal loan is one that you can take for any number of reasons. A personal loan is good for tuition medical bills, paying off another debt, and even a vacation. Now, you cannot just waltz into a bank or money lending establishment and apply for a personal loan. You need to fit certain criteria to qualify for a personal loan.

Qualifications for a Personal Loan

  1. Annual Income

You need to show proof that you have an income. No bank will lend money to someone without a means to repay the loan. Even being self-employed is difficult for banks to accept. If you are jobless, your chances are very slim. Banks typically want you to have an annual income of at least S$20,000. You will also bring bank statements and pay slips to prove this. This is for salaried employees.

Self-employed persons may be required to have an income of at least S$40,000 to qualify for a loan. The same thing goes for foreigners. A money lender may require lower minimums than that. For a moneylender, the amount you can borrow depends on what you earn. So, an income of S$20,000 could get you a loan amount of S$3000. Also, they are softer on self-employed persons.

  1. Age

You have to be at least 18 years old to get a personal loan. Some institutions may tell you 21, but usually, it is 18. Under-aged persons can forget about getting a loan to pay for something their parents have refused to. You will be required to show some ID anyway. There is also a maximum age limit for taking loans. If you are 65 and above, you can’t go for a loan.

  1. Period of Employment

Just because you have a job doesn’t mean that you are qualified for a loan. You need to have held that employment position for at least three months. You will also show proof of how long you have been employed. This proof can be in the form of payslips (for the past three months) and/or your employment letter. Banks are very strict about this.

While a moneylender is less stringent, you still need to have that employment track record. You cannot come into the country after a year of absence and now work to get a loan.

  1. Debt

The whole point of asking for your annual income stats is to know if you can repay your loan. Your income also determines how much you can borrow. Your track record for borrowing and repaying comes into focus at this point.

Some banks won’t give you a loan if you are currently in debt. Other banks and money lenders can give you a loan if you are already in debt, but with certain conditions. Many financial institutions are leery of this, though. If you are already in debt and coming for a loan, how will you repay?

  1. Credit Score/Report

This is the big one. When you go for a loan, the bank contacts the Credit Bureau of Singapore for your credit report. What they see there will determine your future loan business with that bank.

A credit report states how often you have fallen into debt. It also states how well you how fast you clear those debts. Your credit score shows how much the banks can trust you to repay a loan. As such, if your credit report shows any of the following, just know that you are not getting that loan.

  1. You consistently fail in timely payment of credit card bills
  2. You consistently default on repaying your home loans
  3. You consistently max out your credit cards
  4. You rarely meet the minimum balance when repaying your loan6. Interest Rates and Monthly Payments

Banks tend to charge high interest rates on personal loans. Personal loans are quite expensive, especially because you can use them for anything. Personal loan tenure can be as long as 7 years, depending on the amount borrowed. You could pay interest as high as 8%, or even more. You will be required to repay that loan every month, so you will have to work that out.

Moneylenders have a fixed interest rate. This is required by law, so you can get a personal loan from a moneylender at 4% per month.

Things to Take Note Of

  • You may be wondering if you can borrow loans simultaneously from several banks. That is not possible. Banks are very rigorous in their loan process. They carry out background checks. The process of qualifying for a bank loan is almost like trying out for the Secret Service. Do not think of going for loans from different banks at the same time. You might even attract a penalty for that.
  • When looking for a moneylender, always go to a licensed one. Loan sharks abound in Singapore. To avoid them, finding a licensed money lender is easy. Go to the Registry and look them up. There are over 150 registered money lenders to choose from.

How To Get Low Interest On Your Personal Loan

Borrowing money is among the many options available to an individual when they need a personal loan. Before you decide to get a personal loan be sure that you have thoroughly done your homework. Also be very clear that a personal loan is the best choice for your financial needs. You then need to review the choices open for you and decide on the one that will best work for you.

Of importance is that you understand the charges and fees the loan would attract. And also take note of the repayment schedules and conditions. You can also ask for the loan that has an early repayment option.

Even then, in Singapore, you will find numerous different loan types and also different schemes tagged onto each type of loan. This will on many occasions confuse borrowers when they are looking for the best type of loan that they can take. Even then, it is advisable that you make your inquiries to ensure that you understand what each loan terms are. This way you will be able to make informed choices to ensure you get a loan that fits your financial needs.

Below are ways in which you can have access to a low interest for your personal loan.

Advantages of Mortgage Loan Calculator

Personal Loans Demystified

A personal loan may well be the best possible loan type for you to get when in need of emergency cash. The fast cash advances and loan services offered by most licensed moneylenders will allow you to have peace of mind. This for a borrower means less stress.

The loan repayments are often times worked out mostly based on your income as well as other factors. Hence it is still possible for you to get low interest charged on the personal loans you will be taking. Since most personal loans are unsecured. Thus potential borrowers in Singapore do not require to present any type of collateral and mortgages when taking this type of loan.

Factors Of Low-Interest Loan And Eligibility

One of the major factors that moneylenders use to determine your loan eligibility largely is on a borrowers’ income level. Also, lenders look at the borrower’s source of income. The more a potential borrower earns, then the higher the amount of loan a borrower will be getting. This major factor also plays a role in determining the increased chance of your loan being approved. This also means you may get low-interest rates on your personal loan. This practice is commonly done by both licensed moneylenders and banks as well.

Another common practice that licensed moneylenders and most banks do is to allow borrowers to take up to 4x of their monthly salary. In addition, when you are able to prove that you are able to make your loan repayments on time, your personal loan agreement may be worked out to be a better deal for you. This will mean that the terms and conditions of the personal loan will work best for you.

When the Loan Offer Is Too Good

The adjustment of the Moneylender’s Act in 2010 has in recent years led to many money lending firms opening up in the neighbourhood and the suburbs. They are also able to offer a range of loan services to the Singaporeans.

On the other hand, it has been noted that there is also an increase in the number of moneylenders with bad practices. And the coming up of many new and unlicensed moneylenders who at times pretend to licensed moneylenders to lure potential borrowers.

These wayward lenders often target on borrowers who are in urgent need of cash hence getting themselves into endless bad loan debts.

Normally, wayward lenders will often offer very low-interest rates to the borrowers but then implement fees and give difficult terms of repayment that the borrower isn’t able to match up.

Compare Different Loans Before You Borrow

Make sure to always compare the different loans offered by different money lenders in the market. This the simplest rule of any consumer. There are various personal loan interests offered by different financial institutions, therefore, ensure you make comparisons. And then choose from amongst those the one with lowest interest rates. Find out the loan offerings available for you as a borrower, and consider the debt servicing ratio you have. This is a sum of your debt – the monthly repayments on all your bills- compared to your total earnings.

This calculation technique will let you check if you could incur more debt. And also whether you can meet the monthly repayment on personal loans you hold. Most importantly, be sure to check that the debt servicing ratio doesn’t go above 50% of a total of your earnings. Otherwise, lenders and banks may not let you borrow the loans or offer you the higher interest rate.

Deal With The Right Moneylender For Low-Interest Rate For Your Loan

Once you fully consider your amount of debt and your monthly repayments you are able to manage, plus the outstanding debts you owe for each month, you can then finalize on your decision of dealing with the right certified moneylender.

  • Deal with the moneylender who offers you the lowest interest rates on the personal loan.
  • Ensure you deal with a reliable moneylender and is honest with you. Your loan officer is to advise you on the interest rate, loan amount, and the repayment schedule and amount.
  • Ensure that the moneylender can be trusted and licensed. Most licensed lenders will calculate your repayment package that best suits your current needs.
  • Deal with a moneylender who has good reviews. Also, take your time in comparing the loan interests between different lending companies.
  • One thing to bear in mind is that you ensure to meet your repayments on time.
  • When you consider time flexibility, be sure to choose a moneylender who can offer you this for your personal loan.
  • Look out and be sure to read the loan terms. Ensure that you have Read the moneylender loan contract terms. Also, ensure you understand what you will be signing.

Read up on our list of approved legal moneylenders so you are better prepared in picking the right service to suit your financial needs.

Credit Card Suspended? Here’s Where To Find Money

The Singaporean Monetary Authority (MAS) brought changes to the regulation of unsecured loans. The changes species the amount of money an individual can now borrow. This new uncollateralized loan limit put in place by the Singaporean Monetary Authority does not favour many individuals.

No one likes living on credit but at times life situations may require you to come up with some urgent cash. Therefore, you end up needing financial assistance for several months. Your credit line or credit card may have been frozen owing to the newly set limit on unsecured loans. Here is where you can access urgent cash in Singapore.

The New Limit Of Unsecured Debt 

As of June 1st, 2017, the Singaporean Monetary Authority has put in place a new limit. This limit defines how much of the unpaid debt you can have as an unsecured loan facility. This set limit applies to every one of the financial institutions (FIs) found in Singapore. The new limit will be imposed on you should your interest earning unsecured loan be more than 18 times your earning for each month. This is when the unsecured loan remains so for 3 following months.

When this occurs, you stand to lose any right to use credit facilities offered by financial institutions. Some institutions may also disallow you from acquiring new credit cards and credit card unsecured facilities. And also getting increases on the existing charge cards issued by them.

What An Interest-bearing Unsecured Debt Is

Interest-bearing unsecured credit is the amount of debt that attracts interest on the balance due. This amount is also not backed using any type of collateral for instance property.

  • What It Includes
    The unsecured interest-bearing debt is one charged on credit lines, credit cards, overdrafts and personal loan issued by the various financial institutions found in Singapore.
  • What It Excludes
    The interest earning debt excludes credit on the unsecured loans extended to you on a needs-basis and purpose. Such unsecured loans include medical, education and business loans.
  • The Financial Institutions (FIs) Involved
    The financial institutions involved include credit card issuer and banks found in Singapore.

What Will Happen When You Exceed The New Set Limit

When you go beyond the new set debt limit, you will no longer be able to perform the following transactions:

  • You will not be able to apply for a new credit card.
  • You will not have access to any new unsecured loan facility such as personal loan and credit line.
  • You will not be able to apply for limit increases on your existing credit card.
  • You will be able to apply for an increase in the already existing unsecured loan facility.
  • You will be disallowed from making charges onto the on-hand credit card.
  • You will also not be able to use your on-hand credit card to pay for recurring charges such as your utility bill.
  • It will also not be possible for you to make cash withdrawals and issue cheques using your unsecured line of credit.

An Example To Help You Understand

For example, assuming your monthly income is S$3,000. We will also presuppose that this is the same figure the financial institutions have on your income data. Therefore 18x your earnings each month comes to $54,000. (That is to say, each month’s earning S$3,000 x 18). Assuming you hold three credit cards with HSBC, DBS, and Citibank. For the credit cards, you have an outstanding balance due of S$10,000 each. In addition, you hold two unsecured lines of credit with OCBD and UOB. And the credit lines you have a balance due of S$15,000 on each of the cards.

The interest-bearing of unpaid loan debt for all the 5 banks comes to a total of S$60,000. This amount you owe already goes beyond the set limit of 18x your monthly earnings. Given that the S$60k is not paid for the months of January, February and in March. When April comes to an end, all the five banks will suspend both your credit card and line of credit. This for you will mean you will not be able to do the different transactions. These transactions are outlined under “What Will Happen If You Exceed the New Set Limit”.

This will remain so until you are able to fulfil the below-listed conditions:

  • You can lower the interest-bearing debt that carries no collateral to an amount below 18 times your monthly earnings.
  • You present your most up to date wages document to the financial institution for a review of your credit.
  • The bank uplifts the suspension on your credit cards and line of credit based on the results they have obtained from the credit review.

How My Total Interest-bearing Is Determined On The Unsecured Debt

The Singaporean credit bureaus often gather and maintain all credit information. This information regarding a person’s credit is often presented to the bureau by its members. Members of credit bureaus include credit card issuers, banks, and other financial money lending companies in Singapore. The bureaus then calculate the sum of all your outstanding balance due. This is got from the reports issued by their members. The report often lists all the debt you owe across both the unsecured and secured credit facilities.

The outstanding uncollateralized credit is further separated further into 2 parts. These 2 parts are non-interest bearing and interest-bearing debt. From this, the financial institutions only consider the interest-bearing unsecured credit. This will then help them establish your borrowing limit. You will then be able to access your credit report. And you can get it from DP Credit Bureau and the Singaporean Credit Bureau (CBS).

Where You Can Get Money If Your Credit Card Is Suspended

The Singaporean Monetary Authority set limits will end up suspending some individuals credit limits. Before you find yourself in such a predicament, you should talk to a licensed moneylender. A trusted and licensed moneylender will help you with a suitable loan before your debt escalates and snowball into a huge debt. The moneylenders will be able to offer you unsecured loan facility. The unsecured loan facility by a licensed moneylender attracts low-interest rates.

Don’t let yourself be in debt when there are means and ways to assist you to avoid getting yourself in trouble with money issues.

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.

Need A Small Business Loan? Here Are 10 Things To Consider

For a business to move forward, it needs to have a working capital. This is in particular during its initial three years. Each entrepreneur dreams of building a better business, get more clients, make profits and expand. Being able to access a business loan cannot be done out of impulse. It instead needs lots of preparedness and planning.

Singapore has, however, a very small number of moneylenders who operate strictly independently. These moneylenders ensure clients information is completely not to be disclosed to anyone and that it does not get distributed. Here listed are 10 things you need to consider if you decide to take a small business loan.

Why You Need A Small Business Loan

A straightforward answer would be to expand or even maintain your business. But even then, that would be the end result. However, you will need to be a lot more specific with the purpose. There are business owners who take out loans to help maintain the businesses production.

An example is a business owner who sells cupcakes. There is a high demand for cupcakes during occasions like Valentines or Christmas day. The owner will require some additional operating capital to help meet the demand. This will also ensure the quality of the product is not sacrificed. This may also mean hiring extra staff to help in the production process.

A business loan can also be used for purchasing equipment, paying rent for new premises for expansion and even paying off existing loans. Depending on the intended use of the loan, being specific in your business plan will help keep you focused. You need to consider that a loan is an investment to help grow your business in the future.

Whether You Can Afford Getting A Loan

It so happens that when taking loans, most people focus more on the interest the money attracts. They seem too shocked on discovering the extra charges financial institutions and banks charge onto the principal amount. When you opt for a loan, do ensure you do a financial analysis. This will help you know whether you can comfortably handle the repayments.

Shop around comparing different loans and be sure to ask for quotes. Also, take consider what online moneylenders have to offer. This is because banks can offer you set loan packages which may not be flexible to fit your unique business needs.

How Fast The Money Is Needed

You will also need to think about how soon you need the money. It could be you have found a business opportunity. You may have been looking for equipment which suddenly goes on sale. Your own saving may not be sufficient, but in making the purchase now could lead to you saving more.

Bear in mind that although bank loan processes take weeks, it does not guarantee you will get the loan. Licensed moneylenders provide online business loans and take a shorter time to process. You could even get your loan approved within 24 hours.

How Much Working Capital You Need

You could seek financial advice from your bookkeeper or accountant. This way you are able to come up with a realistic business plan. This plan will be more accurate and not an estimation or underestimation of the business needs. Also only take the loan amount required.

Taking a loan means you have a financial responsibility. Therefore you should meet it to avoid long-term costs of bad credit. A loan calculator will help you know how much you will be paying in full and how many repayments you need to make.

The Type Of Lender You Are Looking For

Different moneylenders offer varying loan products. Therefore you have a bigger choice than just banks. Consider that banks provide loans with strict eligibility lists and for a specific purpose. On the other hand, licensed moneylenders offer small business loans that could be suitable for your needs.

Your Readiness To Tell Your Story To Your Lender

Moneylenders always want to know your type of business, credit experience, goals and previous ventures. You may have to share who your clients are, how you take care of credits, the managing style of your business and achievements you made. This will help prove the potentials your business has to make sufficient income to help repay the loan.

Whether Your Documents Are Ready

Moneylenders are rather strict with a person’s qualification for a loan. You need to be able to prove that your business is thriving to help you get the loan. Provide documents to help prove that you merit getting the loan. This includes the company’s recent account statements, Tax Notice of Assessment and other needed financial statements.

Your Credit Score

Get a copy of the credit score to help save time before applying for a business loan. Your credit score will help know which lender will best help you. You can also build your credit score before taking a loan. This is because bad credit means your loan will be declined. And also the application could lower the score since each application is accounted for.

Other Debts

With an existing debt, you will need to show that the cash inflow is sufficient to cater for the added financial responsibility. It’s better to declare all your existing debt to a moneylender before they discover it. Even when you get a loan without declaring all debt, you will financially strain yourself when making the repayments.

The Relationship With Your Previous Moneylenders

Building faith between you and moneylenders will earn you financial partners. This way you can turn to them should you need a new loan. You can also expect faster loan processing and even a higher loan amount.

Conclusion

It may not be an easy task when applying for a small business loan. Even then being ready and your knowing what to anticipate will make the process manageable. This will also help you get the most suitable choice to suit your needs. When seeking a small business loan, licensed moneylenders are worth considering. And they also have knowledgeable loan officers who will help process your loan.

Reality Check Of Over-Spending: The Main Reason Why Singaporeans Get Themselves Into Debt

Gambling is a sure way to amass debts and stay in debt. You can even take out loans to support your gambling habit in Singapore. This may look strange, but it is true. The gambling options are endless. There is soccer betting, horse racing, dog racing; and then there are the casinos and their games. Everything keeps you hooked, making think that you can always win the next round. You need a lot of money if you are going to be a serious gambler. It is not advised that you get any type of loan, but a personal loan can assist you. You would still be in debt, but it is a much better option than taking a cash advance on your credit card.

Despite the huge debts that gamblers in Singapore accrue, gambling still isn’t the number cause of debts in Singapore. It isn’t even number two. The major cause of debts for Singaporeans is simple: overspending.

Businesses have fine-tuned the art of parting consumers with their money. Every day something new comes out, with a tagline that makes you think ‘I just have to have that!’ Apple does it all the time and is a prime example of this. You could buy an iPhone 7 and two weeks later the iPhone 7s will hit the markets, and you will still buy it. The features are practically the same; the main difference is the price. You won’t even know how much you are spending till you see your account balance.

Well, it isn’t totally your fault that you can’t help yourself. It is your fault that you can’t exercise stronger control, but there you have it. Reasons, why many Singaporeans are in debt due to overspending, are:

Your Surroundings

The mall. The store. The supermarket. These environments are designed to tempt you to part with your money. You may go to the mall for a Father’s Day mug. You come out later with a hat (it was on sale!), two pairs of shoes, a bracelet, and some designer socks. You didn’t even buy what took you there in the first place.

Supermarkets are super-sneaky with the way they get you to overspend. The concept behind placing dairy products deep inside the store illustrates this. Apparently, one in so many people goes to the supermarket every day for dairy. As they pass the many aisles that lead to the dairy section, they can’t help but be tempted by the items on display.

This is just one-way stores get you to buy extra. They also use music. A scientific observation has it that, during Christmas, festive music is played to get shoppers into a festive shopping mood. This music is also meant to influence your purchase choices and the time you have left until Christmas. In the end, you have been skillfully manipulated to spend more than you planned to.

Whenever you go shopping, make a list of what to buy. This will keep you track, within your budget, and no overspending.

Your Company

The company you keep also determines how you spend. It is normal to want to fit in with your friends or peers, but it is ridiculous to overspend just to please them. You may have friends that earn a higher income than you do, who maintain a certain lifestyle that is bound to put you in debt. Maybe you have friends who love going out but never pay for anything. This kind of company guarantees you going over-budget.

There are two ways to solve this problem if you want to stick to a budget. You can change your friends, or you can explain to them that you can’t spend as much money with them. If they value your friendship, they will respect your wishes and change tactics, to your benefit.

Your Credit Cards

The burgeoning cashless society is a huge convenience to everyone. You don’t have to carry cash around. You just need a credit card and you have access to all your money, and then some. Not having cold cash means you can actually save more and spend less. Right? Wrong!

Singaporeans spend even more when using their credit cards. Even research has proven this to be true. There is a higher chance of you paying for an item or service with your credit card than you buying the same item with cash.

Falling into credit card debt is so easy when you overspend, and getting out of it needs a lot of time discipline. If you are the type who uses up your credit availability and struggles to pay back, stop using your credit cards. Stick to cash. Knowing that you need cash to make purchases should still your spending hand a bit.

Now That You Know That Your Debts Are Largely Due To Overspending, How Do You Quit The Debt Habit?

Falling in Debt –How to Quit

First, and most importantly, you need to budget wisely. If you are the type who prioritizes spending as opposed to saving, you are in trouble. When you get your salary, make a budget that includes savings and expenditure. Save something before you spend. That expenditure needs to be in detail and budgeted to the last cent. Whatever is left after the spending, add it to your savings.

While you are still young, you need to be thinking about retirement. Overspending now will rob you of a peaceful retirement in the future. Start accounting for savings and spending even before you get paid, and remain firm in the financial boundaries you have set for yourself.

Once you have settled that, you should create a debt repayment strategy. You have to clear your accrued debt before your savings can look respectable. Basically, a good repayment strategy requires you to pay back as much as possible in the shortest possible time.

Therefore, you can set the amounts you want to repay, with time intervals. Like the minimum every week. Before you know it, you will be out of debt. Plus, overspending will be gone.

Loan Application Rejected? Here Are Ways To Get Your Act Together

There are many reasons why you would want to apply for a loan. Face it: you live in Singapore. You need money to do a host of things. You need to make payments for your pet’s registration, after which you will have to budget its monthly feeding and grooming. You need to schedule trips to Disneyland in the US with your best friend (whom you plan to propose to at the place in question). The latest smart house on the market is a must have. Your tuition fees are coming up, and there are books you need to buy. And there is only so much that your monthly or annual income can take care of. Well, time to get a loan.

You go to the bank and fill out an application form. The bank gets back to you, saying that you are not eligible for a loan. What, why? How?

Banks and other lending institutions look at your work history, annual/monthly income, credit score, and TDSR –Total Debt Servicing Ratio– before approving your loan application. When your application is rejected, quickly check to see which of these is the culprit. Most likely, it is your credit score.

The Credit Bureau Singapore (CBS) is the place to go to get your credit report, which will tell you just how much trouble you are in. CBS doesn’t just provide your report to banks and other lending organizations: it also keeps a blacklist. Defaulting on loans or getting debt management, or undergoing bankruptcy proceedings, will get you on that list. No bank is letting you get near them if you get on the CBS blacklist.

What do you do now? There is still hope for you. If you can’t get a loan due to intermittent employment or a bad credit score, you can redeem yourself by doing a couple of things. Read on to learn how you can get your act together to qualify for a loan.

1. Get A Job

Not just any kind of job: a secure job. Stable employment is what you are after here. Also, you should have held this job down for at least a year before the banks will take a second look at your loan application. In general, banks prefer to offer loans to Singaporeans with high annual incomes. Self-employed applicants go through a rigorous process before their applications are approved. Even at that, you have to be earning a certain amount annually.

Without steady employment, even loan sharks will baulk at lending you money.

And don’t think that you will hustle a side job and stay there long enough to get the loan and call it quits. That will not work. Things might even make things worse for you and your report.

2. Settle All Pending Payments

Late repayments on loans or credit card bills affect your credit score. Neglecting to clear all the balances due also affects your credit score. Refusing to pay up to the monthly minimum amount on your loans also affects your credit score. These are the major things that give you a low rating on your credit report. It doesn’t matter what all else you do: ignoring your loan repayments guarantees are poor credit score.

Before you apply for that car loan, make sure that you clear all existing loans and bills first. No matter how long it takes, do it. Settling your debts gives you a better credit report and a healthier TDSR standing: banks like it when they see that less than half your salary goes to paying credit card bills.

Every debt you owe must be repaid, including that library fine for late returns of those books you borrowed.

3. Go And Borrow Some Money – Then Pay It Back With Haste

This is a smart way to continue boosting that credit score after you have cleared all your debts. Get a very small loan –make it a personal loan or a payday loan- and promptly pay it back. This will give your credit score a healthier sheen, and impress the banks.

Do note that this loan has to be a small one, payable in the next month or at least three months. A payday loan is perfect: repay it on your next payday. Over and done with. If you take a loan big enough to make down payment on a house in Brooks Signature, then you must be sure of what you are doing.

4. Use Your Credit Card

Though a slower way of improving your credit, it is worth a shot. Use your credit card, or cards, to buy stuff and even pay your utilities. The goal here is to make tiny expenditures, like paying for groceries. Using up a large portion of credit negatively impacts your credit score, so maintain a large proportion while spending just a little.

5. No New Credit Card Activity

This means that you should neither cancel credit cards nor apply for new ones. While it is advisable to cancel credit cards that you aren’t using, now is not the time. Your credit score is affected by either action, so hold off on them for now.

6. Exercise Patience

Doing all of the things listed above will help you to clear your negative credit report. However, it is still going to take a while. A long while. Like 5 years long, based on what got you on the blacklist in the first place. The least could be two to three years because CBS needs at least 12 months of good behaviour (on your part) to believe that your score has changed for the better. Anything can happen in those two, three, five years. Singapore could be a dystopian, futuristic society by then. At least you have more time to make yourself more loan-friendly.

For these life hacks to work, you need discipline. You can start practising on curbing and budgeting your expenditure. Keep a savings account. Set up an emergency fund. And live far below your means. A good credit score will get you that loan: a vacation in the Maldives will not.