Are you one of those individuals who thought that having personal loans are something to be terrified of? There are so many reasons why a lot of us feel this way and one of those is the personal loan myths which many Singaporeans believe for the past years such as the following:
Personal Loans are Only for Those Short with Money
This is the most common stigma when it comes to personal loans. People don’t just get personal loans whenever they are short with cash instead they have personal loans for some other reasons.
Investment purposes, for example, are one of the reasons why you would opt to have personal loans. Through a personal loan, you don’t have to touch your hard earned savings anymore. It would also save us from high-interest rates from cash advances and help us from avoiding insurance claims.
Personal Loans will Put You in Debt
This is another perception of others that once you are on a personal loan, it would automatically put us in a perpetual debt after being unable to afford the loan repayment.
Well, this will only happen if you don’t know how to handle your finances. Before you would go for a personal loan, you should make sure that you are informed with the repayment terms and determine if you could afford it; some moneylenders have monthly repayment while there are also some who have daily or weekly repayment which gives borrowers some options.
You also have to be smart enough and know first the interest rate from the moneylenders and choose the lowest one which you can afford.
Getting More Cash than Needed
This kind of view with personal loan is wrong. There are instances that if you have higher income, you will be offered with larger loan amount but if being offered by a moneylender with a bigger loan; you should see to it that you need that amount of money.
For example, if you were about to loan $500 which is the amount that you really need but have been offered $1000, you should only stick with the original plan of $500 so you can also avoid higher monthly repayment plus the interest rate that they will be charging which you will then regret later on.
Offering you with higher loan amount is just another way of moneylenders to profit more money from you through their high-interest-rate so not jumping to their tricks is already a big move for being a wiser person.
Why Enter Into a New Loan if You Already Have Old Debts?
Others may think that having a personal loan would add up from the debts you have from your credit cards; well, a personal loan would help us get away from all our debts.
Most credit cards charges around 24% for the interest rate per annum hence not being able to pay them right away will just put you in more debt hence going for a personal loan to pay for all your existing debts won’t be a bad idea.
Through a personal loan, you would be given a lower interest rate and flexible repayment terms thus helping us in dealing and controlling our debts.
Personal Loans or Credit Card?
Many of us are being turned between these two choices. Well, which one is better? There are a lot of Singaporeans who think of having personal loans rather than using their credit card which is correct. Personal loans are easier to handle compared to a credit card where you have a fix monthly repayments that you can discuss and agreed upon with the moneylender.
Using a credit card also to have its benefit which is having a zero interest for some products if you can pay them on time which is surely great thus if been used properly, the use of credit cards would also help us save money from the interest rates.
A Moneylender is the Key If I Can’t Meet the Minimum Income
Are you planning to apply for a loan from the bank but you are not qualified because of their minimum income annually which is usually $30,000 thus thinking of having the loan instead to a moneylender?
Before going to a moneylender licensedmoneylender.loan, you should check first all the local banks in the area for there are also some local banks that would require a lower minimum income like $20,000 annually.
Bank loans surely have lower interest rates compared to moneylenders so doing our homework like checking various local banks in the area and talking with a bank representative is a must if you wanted to save more money and avoid paying excessive interest rates.
Managing a loan is surely not that easy where you have to balance your daily needs and monthly repayments, but if you are going to use your money wisely, you won’t have any trouble paying your loan.