Should I Borrow Money? Three Perspectives

It’s one of the oldest questions in the world; is it the right time to borrow? Whether you’re eyeing up a new property or you want to outfit your new business with some quality plant and equipment, it can always be a difficult decision to make.

At Fast Money, we’ve had discussions with thousands of people from all walks of life, so we’ve heard about every single argument for and against borrowing that’s out there. Here are three of the most common.

Borrowing is cheaper than giving up equity for new businesses

If you’re a start-up, it can be tempting to look at selling shares in your company as a way to raise funds for the necessities. Many organisations resort to this in the early days of operation, but the after-effects haunt them for years to come. Unless you can buy back those shares at some future date, that individual or group has a permanent stake in your business, giving them a seat at the table on all decisions. It will also affect your cash flow, affecting your profits now and into the future.

Borrowing money is a better fit because simply, it is a temporary process that fixes a temporary problem. You’re planning to make your business a success, so all quarterly and annual plans should begin with the idea that you will eventually be earning enough money to pay back your debt. Once you do, the debt is gone forever, and your equity remains intact.

Some investors may frown on a start-up with excessive debt

An argument against borrowing – only for businesses seeking investment – is that some particularly conservative or defensive investors may find excessive debt a turn-off. The definition of ‘excessive’ debt will depend on the individual investor, but any smart investor or venture capitalist will be considering the consequences of the business failing to meet a repayment. In a worst-case bankruptcy event, the lender frequently has priority over other stakeholders on the assets of the company, affecting the investor’s ability to recover some of their costs.

Where debt is small and manageable and the company has a proven ability to repay the debt, this will not factor in. It’s only where debt is considered to be excessive that this comes into play. Again, this will only affect businesses seeking additional funding through outside investors or venture capitalists.

Allow you to capitalise on opportunities as they arise

Most importantly, borrowing gives you an immediate lump sum that can be used at once. If you’re looking at opening a new location or snapping up some new machinery for a bargain, taking out a personal loan allows you to grab these opportunities the moment they appear. The long-term benefits of these actions can easily outweigh the cost of the debt, increasing your cashflow and allowing you to grow in ways you otherwise would not have.

For more information, start a discussion with a Fast Money consultant today.

Personal Loans – An Alternative to Credit Card Debt

Whether we’re buying a home or keeping our business competitive, we can all require a little of extra capital every now and then. Credit cards are one of the most frequently used methods of accessing additional funds, and are popular the world over, used for everything from family groceries to plant and equipment for factories. However, no matter which provider you choose, you’ll have to accept certain inherent drawbacks to credit cards.

Personal loans offer an alternative that meets many of the needs of people who would otherwise sign up for a credit card, without many of the pitfalls and downsides that plague them.

A trap all too easy to fall into

We’ve all heard horror stories about the danger of overusing a credit card; people spiralling into debt, often taking on other credit cards to pay back what they owe on the original card like they were building a house of cards. This is one of the weaknesses of the credit card – the seemingly unlimited nature of it. Of course, you can reach daily and monthly limits that cap your spending, but even these limits will generally exceed what the average Singaporean is capable of repaying. It’s the psychological effect of having a ‘magic’ piece of plastic that allows to buy anything from TVs to heavy machinery without even seeing a banknote.

It sounds counter-intuitive, but a personal loan’s finite nature is one of its biggest strengths. There’s no temptation to keep spending beyond your means; once the loaned amount is gone, it’s gone. This means that people will have to carefully consider what they will be using it for, and are more likely to choose an amount that they are capable of repaying. Simply having that moment of stopping and thinking can head off a lot of potential financial problems.

Additionally, personal loans often have a significantly lower interest rate than credit cards, often differing by three or four per cent. That means the total amount repayable doesn’t get ahead of you and you can more carefully control your monthly repayments.

The money you need, when you need it

Personal loans are also just simply a more convenient choice for certain kinds of purchases. Unlike your magic plastic card, a personal loan provides an immediately useable lump sum ideal for larger purchases. If you’re a start-up business looking to get your manufacturing arm up and running, or you want to jump on buying a new location when the property market is good, a personal loan delivers where a credit card cannot.

To start a discussion about whether a personal loan would be suitable for you, please get in touch with a Fast Money consultant today.

Benefits of Monthly Instalment loans

If you’re going through financial issues you may be looking to borrow some money to help you get back on a solid financial footing again. In that case you will then have to decide which is the best way to get a loan because there are a number of different ways to choose from. While there are many sources to borrow cash, not all of them will be ideal for you; most people opt for monthly instalment loans as they offer a lot of flexibility and a range of other benefits.

Check out the benefits of monthly instalment loans below to find out more:

More manageable repayments

The biggest benefit of taking out a monthly instalment loan is that you have a clear picture about how much you will pay back each month. Breaking down the repayments for your loan into smaller, monthly instalments gives you the freedom to pay back your borrowings without disrupting your current lifestyle. Monthly instalments help you to plan your budget and avoid plunging you into more financial difficulty.

Longer payment periods = less financial stress

Money issues can be a big source of stress if the outlook is looking bleak; this is why monthly instalment loans are of huge benefit as they allow you to pay what you can afford. Upon applying for a personal loan, the moneylender will agree your repayment amounts based on your income and the size of the loan ensuring that repaying the loan never stresses you out.

Building your credit rating

Credit ratings are an important factor when it comes to borrowing, whether you’re looking for a personal loan or trying to get a mortgage; lenders may have to consider your creditworthiness. Another benefit of monthly instalment loans therefore is that by making regular payments you prove yourself to be a reliable borrower. As a result, you improve your credit rating while paying off your loan.

Better control of your finances

Another important benefit of taking out a loan which is repaid monthly is that it allows you to have better control of your finances. Once you receive your cash you will be able to solve any financial issues you may be having and get back to reasonable liquidity. In addition, the monthly repayments should be comfortable enough not to put pressure on your finances and therefore keep you in full control.

The benefits of monthly instalment loans listed above show that this method of borrowing is one of the best ways to borrow some cash. Monthly repayments allow you to stay in control of your finances and help you to improve your credit – all without creating any stress or pressure.

Avoid borrowing from friends and family

In life unexpected events occur leading us to need to borrow some money to tide us over. While there are money financial institutions such as banks and personal loan providers we can turn to, you could be tempted to ask the people you know for help – especially in an emergency. Circumstances differ but if you’re looking for an injection of cash it may be a good idea to avoid borrowing from friends and family. There are many reasons for this, some of which are outlined below:

The burden of open-ended loans

One thing about loans between family members and friends is that they are usually open-ended. This means that there is no definite repayment period for the loan agreed upon; a situation that can cause confusion or disagreements over repayment times and amounts. This is unlike borrowing from personal loan lenders such as Fast Money, where clear repayment figures and dates are agreed prior to the loan being paid out.

Don’t become ‘that guy/girl’!

Another issue with borrowing from friends and family is that there is a risk that you could be seen as that person who always asks for money. This may not be true of course but we all go through financial ups and downs that it may seem easier to just ask a certain family member for help. Unfortunately, despite good intentions on both sides, resentment can sometimes build, thereby straining your relationship.

The person you borrowed from has an emergency of their own

Another thing to consider if you’re thinking of borrowing from someone close to you is the fact that they may experience some financial trouble themselves and ask for their money back. In most cases they will ask for the full amount, and you may not be able to comply at the time of asking. This is in complete contrast to borrowing from a legitimate lender, with whom the monthly payments and the loan period are bound by a contract.

The potential to strain relations

The points mentioned above have the potential to strain relations between the lender and the borrower despite their ties as friends, acquaintances, or family. Money is one of the most difficult subjects to discuss and your friend may feel uncomfortable enquiring about the loan. This may then lead to a strain on your friendship or family ties.

Family gatherings may become awkward

Following on from the above point, strained relations mean that any family gatherings or work outing may become potentially awkward with the loan becoming an elephant in the room. This is why it may be a good idea to get a personal loan form a licensed provider as the relationship remains professional and is does not impact on your personal life.

As we can see, it is a good idea to avoid borrowing money from friends and family wherever possible. The points raised above show the pitfalls of doing so and show that it may be better to explore other options.

Are you a foreigner in Singapore experiencing financial issues?

Everyone runs into financial issues every once in a while and when that happens it may be difficult to find somewhere or someone to borrow some money from. In such instances you may know of reputable local lenders from whom to go and get a loan. For people who are abroad, however, such as if you are a foreigner in Singapore, things can be a bit trickier. Depending on how long you have been living in Singapore, you may not have many trusted acquaintances yet or not know where to turn.

Thankfully for foreigners in Singapore that are experiencing financial issues, help is at hand from personal loan specialists such as Fast Money. Such licensed moneylenders provide foreigner loan services and instant cash through simply applying online or visiting their offices.

How to Get Personal Loans for Foreigners in Singapore

Getting a personal loan in Singapore if you are a foreigner is relatively easy provided you meet the required criteria set out by loan providers like Fast Money. The requirements are minimal and usually only need you to be in permanent employment, while the application process is processed fast. Personal loans are a good way to help deal with any financial issues you may be facing during a time when you are far away from your homeland.

To get a personal loan, you can either complete the application process online, or meet a representative in order to procure the amount you need.  Licensed moneylenders will sit down and discuss your requirements with you, including how much you are going to borrow, and for how long. In addition, going through professional providers ensures that you will always get competitive interest rates and a flexible repayment period.

A Financial Solution to fall back on

As a foreigner in Singapore things may be becoming more familiar the more you live here, but the stress of financial issues can make it look like there are no more alternatives. This is where a personal loan comes in, as it can help to cover any gaps and tide you over until you get back on your feet again financially. Whether you are short of money to pay your bills, or you have a family emergency, getting a personal loan may be the best way to get some extra cash quickly.

 

With that in mind, if you are a foreigner experiencing financial issues then why not find out if Fast Money PTE Ltd can help? The answer to your financial problems may be just an online application or office visit away!

4 Questions to Ask Before Acquiring a Personal Loan

A personal loan can be the solution to helping you renovate your home, pay for a well earned holiday, or consolidate your debt. Whatever you are planning to do with the amount you borrow, the low interest rates on this type of credit make it a good way to raise capital quickly. However, acquiring a personal loan is also a big undertaking and so anyone doing so should be fully prepared before making the commitment.

With that in mind, listed below are 4 questions to ask before acquiring a personal loan:

    1. Is the lender a legitimate company?

One of the most important things to consider when acquiring a personal loan is whether the providers you have chosen are legitimate companies you can trust. Most reputable companies will have clear and impartial information on their brochures and websites, including contact information, interest rates and customer service details. Legitimate companies such as Fast Money PTE Ltd also operate under the laws and regulations of the relevant ministry and its legislation.

      1. What is the loan for and how much do you need?

When looking for personal loan companies to borrow from, you may already have an idea of what you need the money for. However, once you have found reputable lenders to borrow from you will now need to have a clear picture of the amount you require so you can work out how you are going to pay it back. Whether its home renovations or a much needed holiday, try to spend only what you need to lessen how much you need to borrow.

        1. What is the Interest Rate?

Understanding the interest rates on your personal loan is part and parcel of the question above but an important question in itself nonetheless. This is because the interest charged on your borrowings, and any defaults you may incur will determine the full amount payable during the loan period. Understanding the rates you’re going to be charged therefore allows you to borrow an amount you are comfortable with.

          1. How Flexible are the Repayment Options?

Despite our best intentions to pay off anything we borrow, unexpected financial events can sometimes occur; when this happens you may require an adjustment on your repayments. Again, reputable lenders such as Fast Money will work hard to accommodate their valued customers in terms of repayment amounts or time periods.

Flexible repayments are not only there in times of financial trouble however, they are also a good way to organise your finances to ensure you can always afford your loan in the first place.

As mentioned above, acquiring a personal loan is a good way to help you achieve your dream home, holiday, car, or possibly set you on your way to financial freedom. Whatever your needs for a personal loan, asking the four questions above is a good way to get started.