5 Reasons Why It Makes More “Cents” To Apply for A Personal Loan

Whether you’re trying to build a strong financial foundation for your life or you’re looking to jump on an opportunity, taking out a loan could be the first step you need to make toward growing your wealth. Whatever your objectives, it can be extremely useful seeing how a loan could help you. We’ve rounded up a few of the reasons why it just makes more ‘cents’ to apply for a loan, so read on!

  1. Lower interest rate than other loan products

If you’re struggling with credit card debt or student loans, it can be useful to consider a personal loan for the purposes of debt consolidation or loan refinancing. Offering potentially significantly lower interest rates, they’re a possible way to save money in the long run.

  1. Easier budgeting

The fixed nature of a personal loan allows you to more easily budget for ongoing expenses. Simplify the process of paying off your credit card debt or outstanding loan amount by turning your existing debt into a single amount to be paid off, allowing you to only have to remember one amount each week or each month, decreasing your chance of missing a payment.

  1. More affordable financing

If you’re considering making a big purchase and don’t have the capital up front, the store may offer you a finance solution. Whether for a used car or a new television, often the seller’s finance option will be significantly more expensive in terms of interest and less convenient than going through a lender.

  1. Improve your credit score

Taking out a loan for something and gradually paying it off in timely manner can do wonders for your credit score. Remember, it cuts both ways – showing an ability to pay off a loan the correct way looks great when you’re going for a mortgage or larger loan, in the same way that falling short of the mark hurts your chances.

  1. Budget for a large, multifaceted expense

Whether you’re planning a wedding or a birthday party, you’ll probably be dealing with at least a handful of vendors or suppliers. Rather than putting all of that debt from multiple sources on the one credit card, take out a loan and put a hard cap on how much you can spend. Not only will you benefit from the lower interest rates, you’ll ensure that you don’t get carried away and buy things you ultimately can’t pay for.

Debt Management: Tips on How to Borrow Low to Repay High Interest Loans

If you’ve already accumulated one or several loans with a high interest rate – such as a credit card – you may find yourself struggling to make more than the minimum repayments. In these situations, it can be useful to see if you could potentially restructure your existing debt to better your financial situation.

Debt restructuring is a complex process and is not one to be undertaken lightly. To ensure that you’re making the right decision for your finances, think carefully before signing anything and keep a few things in mind during the process. We’ve put together a few tips to help you through this period. Read on to learn more.

Closely compare the interest rates

The first and most important factor to consider is the comparative interest rates between the loan you’re considering and the average interest rate across your current debts. This can require some long, hard mathematics, but spending the time here can potentially save you money and stress down the line. Figuring out your average interest rate is easy thanks to many online calculators, then it’s as simple as putting it next to the interest rate for the consolidation loan and finding out which one is lower.

Factor in fees and additional charges

It’s important to understand that there may be costs to through the life-cycle of the loan outside of the principal and the interest itself. Many lenders charge fees for opening the loan, and some for closing the loan early, making partial payment, making electronic payment, as well as late fees and other charges.

Some lenders may provide a comparison interest rate, which is an adjusted rate helping consumers get a truer picture of the cost of the loan. This is usually the base fixed or variable interest rate, plus the application fees and other mandatory expenses, and does not usually include incidental costs like late fees. Comparison rates make it easier to shop around, especially where you’re certain of your ability to repay in a timely manner in accordance with the lender’s wishes.

Understand the differences between an unsecured and a secured loan

if you’re transitioning from a series of unsecured loans – loans taken without the provision of goods as collateral – to a secured loan – those with the provision of collateral – it’s important to understand the differing penalties for delinquency. In the event of bankruptcy, lenders for secured loans will be able to claim the item provided as collateral. Depending on the value of the loan, this could be a car, or a home, or a business. Know the consequences for loan delinquency before you sign anything.

Three Things To Consider Before Taking Up A Personal Loan In Singapore

Before you jump at the chance to take out a personal loan to get that special something you saw, it’s worth stopping and thinking. Taking on a loan is a big responsibility and isn’t a decision that should be made lightly. To ensure that you’re making this decision for the right reasons, it can be useful to run yourself through a few basic questions before you sign on the dotted line. Read on to find out more.

Is this something you can do without a loan?

This question is bigger than ‘do I need money’? Often in our haste to jump to take out a loan, we forget alternatives. The first question you should ask yourself is ‘Is this something I need now?’ ‘Need’ and ‘now’ are the operative terms in that sentence – if you just want it now, revisit it later when you have more capital; if you need it, but not necessarily now, same thing.

Next you should ask yourself if there aren’t alternative sources of income you should consider. It can be something as simple as asking for some money from a family member or close friend. Next might be requesting a salary advance at work. Explore your options. Find out if the people in your life can give you a hand – who knows, you might be able to help them out later!

Are you capable of servicing the loan?

If you’re committed that you need a personal loan, are you capable of paying it back? Read the terms and conditions closely. If this is your first loan, ensure you understand the meaning of terms such as ‘interest’, ‘term’ and ‘principal’. It may be useful getting a financially-minded friend to give you a hand on this part.

Once you have an understanding of the documentation in front of you, think carefully about how much spending cash you have left over after each pay day and figure out how much of that you can spare to service the loan. Remember to account for interest, and once you figure out a budget to stick to it!

Is this the right loan product for you?

Shop around and try and see if there’s a specific loan product just for your purposes. Renovation loan packages and education loan packages exist to take care of costs associated with property refurbishment and tuition fees, respectively, and can often offer an advantage over the top of a generic personal loan. What’s more, they will look better on your credit record when you apply for a loan for a car or a home, as the banker scrutinising your record will know exactly what the money was used for.

The Pros & Cons of Personal Loans – What to Look Out For?

If you’re at a crossroads in life, it can be useful to sit down and take the time to tally up the advantages and disadvantages of possible courses of action. Many, many people will find themselves considering whether or not to take a personal loan, but it can be difficult to find a solid breakdown of the various pros and cons attached to taking one out.

Luckily, we’ve done the hard work for you. Here are a few things to look out for and think on while you’re doing your research.

A cheaper alternative to lines of credit

Where personal loans excel is in their cost-efficacy against credit cards and other lines of credit. Cash withdrawal from your credit card is infamously expensive, and should be avoided at all costs. If you have a pressing need for immediate funds – for an emergency or to pounce on an opportunity, for example – a personal loan is much cheaper and offers much more preferable interest rates.

Lump sum out, lump sum in

You should be aware that with personal loans, the money is provided all at once, and is often expected to be paid back in the same way. If you take a loan for $2,000, you may have to have $2,000 all at once in order to pay back the loan and clear the debt. This can be a problem for people in certain financial situations who may be paid irregularly or on commission.

Some lenders do offer payment plans that allow you to pay back the loan a bit at a time. Discuss this with your loan consultant to find out if this is available.

Fast and convenient

The application process for a personal loan is often lightning quick. No extensive paperwork or documentation, no lengthy screening process, often funds can be acquired within 24 to 48 hours, making them a great option where you need a specific sum of money within a short window of time.

How’s your credit rating?

If you’re considering taking out a personal loan, it’s important to be aware of your credit score. A credit score is a numerical representation that gives banks an idea of your ability to service (pay back) a debt – the higher it is, the more the bank is going to be willing to trust you. Things such as being late on paying back bills, not making your minimum credit card repayments, keeping your debt levels at a consistently high level and others can all negatively impact your score, so be careful with your finances if you’re considering taking out a loan.

This said, some lenders do offer alternatives for individuals with bad credit scores, but the specifics of this system will depend on the lender.

Discuss your needs with your loan consultant to find out more.

7 Tips for Applying for A Personal Loan In 2017

Looking to make some changes this year? A personal loan can help you achieve lifestyle, professional and financial goals, but if you’re in the market for some capital it’s important to walk into the loan consultant’s office forewarned and forearmed. We’ve put together a few fast tips to help you make the smart financial choices this year – read on to find out more.

  1. Get into good financial habits

A new year, a new you! If you haven’t made a resolution so far, being a bit smarter about your money is a great one that can help you achieve a whole host of other goals. Being disciplined with your money is the first step towards getting the loan you want with the conditions you’ll love, so if you see a need in the future for capital but have some time beforehand, use it shape up a bit.

  1. Do it for the right reasons

Think carefully about it – do you need a personal loan, or is it the best way to achieve your financial goals? Alternatives such as a credit card may be more suitable, so it’s important to scrutinise your requirements and explore your options.

  1. Make sure you’re looking for the right loan product

A personal loan can take a lot of forms – what are you hoping to achieve with it? If you need help paying university tuition or need money to support a home renovation, there may be a specialty loan product that offers more favourable terms.

  1. Shop around

Don’t jump at the first deal you’re offered – take a look at the market as a whole and try to get a feel for what’s available. If this is your first loan, you might not be able to tell a good loan from a bad one. Do some research, and if necessary, speak to an independent expert who can give you some advice.

  1. Be strict about how much you need

Once you’ve chosen your provider, it’s important to go in knowing exactly how much you want to borrow. It can be tempting to add a little bit extra on as ‘just in case’ money, but keep your will strong. You may also be offered a more attractive interest rate if you take on a higher amount, but think carefully about your ability to service a larger loan.

  1. Understand the repayment method

Different financial institutions have different methods of repayment. Some may prefer automatic withdrawal, some may charge a fee for early settlement of the debt, some may only accept a lump sum with no partial payment. Have a discussion with your loan consultant about how and when you’re able to repay the loan.

  1. Read every letter of fine print

This should go without saying, but know precisely what you’re getting into. Carefully reading and fully understanding your loan agreement can potentially save you a lot of heartache, so if you’re struggling it may be worth speaking to a lawyer and getting them to interpret it for you.

Business Loans – Secured Vs Unsecured

It’s two words you’ll hear a lot once you start shopping around for a loan for your business – ‘secured’ and ‘unsecured’. But what do they mean? Fundamentally, a secured loan is one in which the borrower pledges some asset as collateral – a thing to be forfeited in the case of default or inability to pay off the loan – and an unsecured loan is one in which no collateral is offered. There are different advantages to both, so even if you qualify for both it can be prudent to choose one over the other. Read on to find out.

Helping you build your business

A secured loan requires assets, and generally offers a lower interest rate to the borrower than an unsecured loan. However, it’s normally the businesses that most often lack assets – start-ups – that require a loan to get started, so these companies usually turn towards an unsecured loan.

This is not necessarily a bad thing, however – an unsecured loan is a great idea for any entrepreneur with a strong business plan that they know will be able to generate money within a set amount of time. They’re fantastic for helping organisations acquire plant and machinery, get their first piece of real estate, or source necessary materials for a first order – anything that directly contributes to the business’ beginning. Also, if you have a good credit history and a proven ability to repay debts, you’ll have more options available in terms of interest rates, so not having real estate or other valuables to offer up as collateral does not mean you’ll be locked into a higher rate.

The right loan for the right company

Your business’ specific capital needs and unique circumstances will ultimately determine the loan that’s most suitable to you. Where companies require a quick injection of capital to pounce on some rare opportunity, an unsecured loan offers flexibility and convenience. Especially useful for start-ups with minimal capital, they can provide that all-important first push to get you off the ground.

For more established organisations with more assets to their name, a secured loan may be more acceptable. If you’ve been in business for a while and are looking to expand your operations, branch out into new markets or develop a new product adjacent to your current core business, a secured loan gives stability and – generally – attractive interest rates and repayment methods.

Whatever your goals, start a discussion with a loan consultant to find out what the best path forward is.

What Is A Pay Day Loan?

It’s a term you might have heard – a pay day loan refers to a short-term, unsecured loan of generally a small amount – these aren’t something you could buy a home with. The name comes from the idea that you might have a sudden and immediate expense come up – think a broken-down car, or a medical expense – a few days before your place of employment pays your salary, and you need something to cover the gap.

Also known as cash advances, they’re a little bit of extra money you can draw on immediately in situations where payment is due immediately. They help you avoid potential overdraft fees on your bank account, bounced checks or excessive credit card fees that you might otherwise attract. You’ll be able to protect your credit rating and your ability to borrow in the future by making smart choices around payday loans.

The help you need, when and how you need it

While ensuring you have the money to take care of a popped tyre, broken hot water heater, or sudden broken leg is what they’re primarily associated with, pay day loans can be so much more than that. Depending on the term of the loan, they’re useful for everything from a little bit of extra spending money on a weekend to getting you that ticket to a holiday.

For business-owners they can also help you grab some much-needed supplies or equipment ahead of a big order. If you’ve depleted your stock of some mission-critical material but know that you’re in for a big pay day if you can just fulfil this order, a payday loan might be the perfect option for you. Equally, they can allow you to capitalise on an opportunity as it arises where your capital and other lines of credit are depleted. For example, say you want to grab a small piece of plant or machinery, or repair a piece of equipment in your shop – you can either wait for your next invoice to be paid, which could result in your business suffering a downtime of days, or you can take out a short-term pay day loan to get yourself back up and running.

Offering you flexibility

A payday loan can help you get out of trouble or into a good time when you know you’ve got money on the way. Be responsible with your money and speak to a loan consultant to find out if these loans are right for you.

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.