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Some people believe that using cash or other liquid assets to cover their expenses, whether large or small would be very ideal for the financial and economic status of an individual. On the contrary, not incurring any kind of debt can be more detrimental to an individual’s economic situation than anything else.
In some countries like here in Singapore, not having any kind of credit history can be damaging to you and your family’s life. Many countries, including Singapore, nowadays use an individual’s credit history to determine whether they can be a good contributor to the economic development of the country or not. Without a credit history, an individual’s capacity to handle financial obligations can be put into question. This is because there is no way to determine whether he would be a responsible loan player in the event that the time has come for him to apply for car loans or any other particular financial assistance.
More often than not, Individuals here in Singapore apply for loans to either purchase a home or to renovate one. For instance, applying for a mortgage loan for your home is a good way to enhance your credit history and rating with the Singapore Credit Bureau. We all know that buying properties or having them renovated can cost an individual a lot of money and bank loans are the only solutions for this kind of a problem. Borrowing money to invest in homes is a form of investment rather than an expense and if the loan is properly managed and re-paid on time, the borrower’s credit ratings or score will be given a good boost.
Second, People apply for a bank loan if they would want to put up a small business or more importantly create an emergency fund for the individual and his family. For people who are very much conscious of their health, or would just want to be ready to face unexpected expenses, it actually makes sense for that individual applies for a bank loan but not to use it immediately. Remember that it is always a good move to have ready cash available if the same is needed at a moment’s notice.
In Singapore, there is hardly or no person at all that purchases property or any other expensive assets by paying cash for it. Unless you are a Billionaire, it would be impossible for you to buy a property using hard cold cash. Whether you like it or not you will have to apply for a bank loan to finance such large purchases. However, without a credit history to back you up, no lending institution will dare lend you money to finance a particular purchase. This I believe is the why you need to establish a good credit line and history within your community.
Unexpected expenses and emergencies are sometimes the main causes why people look for immediate ways and means to get their hands on some quick cash. Since filing for a personal loan philippines application with a loan company or a bank would take a lot of time, their only recourse is to apply for small loans with specialized loan providers that are now present in Singapore. This kind of cash loan works like a salary cash advance only the fund will not be coming from an employer but from external loan businesses.
Small loan providers are specialized businesses that cater mostly to small loan applicants. This type of borrowing today is slowly gaining ground, especially for people who are immediately in need of small financial assistance but do have the time to go through the normal process of filing for a loan and/or do not have the credentials and documentation to file for one.
Small loan businesses are starting to pick up for the simple reason that even if the individual is considered as a bad credit risk or is not qualified to apply for any type of loan but is able to give the lenders proof of income such as earnings from business, employment salary or a paycheck, they are immediately provided with the loan that they require. This is also perhaps the reason why small lenders are quite popular with the working masses. Aside from this, small loan providers are quite accessible to the common workers because they can be easily reached anywhere in the metropolis and most of them now are starting to go online to offer their business thereby allowing cash-strapped individuals to file their loan over the net.
These type of loans may be an easy answer to cover a bounced check that you have issued, avoid late payment for an installment obligation or to simply help bail you out of a bad credit situation. There is, however, one big problem with this type of a loan and that is the very high interest that is placed on the financial assistance. Because of necessity, most borrowers would sometimes overlook this fact, but if you study the loan terms carefully, the amount of interest that you would have to pay for the loan can skyrocket to as much as 300% of the annual percentage rate. In short, you will actually end up owning more on the interest as compared to the original amount that you have borrowed.
When trying to apply for any type of loans in Singapore, the first thing that comes to mind is to find out how to get best loan rates from loan services Singapore. Whether a home loan or a personal loan, here are a few financial tips to consider in getting the lowest possible loan rates available in the financial market of Singapore.
First, you need to decide whether to purchase a property or to simply refinance an existing loan. If you are purchasing a property, you need to know that the loan-to-value ratio of properties is 80% of the price. So in order to get a fast cash singapore loan rate, it would be best to limit the loan-to-value ratio of your loan to about 60% to bring down the loan’s interest rate.
Second, if you are refinancing an existing loan to bring down the current interest rate, make sure that you are no longer locked-in to the original loan. The pre-termination fees for locked-in loans are very expensive so you may end up paying more for your existing loan.
Third, you need to select between fixed rate and floating/variable rate packages. Fixed rate loan packages carry a higher interest rate, but the guarantee is that they will not fluctuate during the time that the loan is in a locked-in period. Floating rates fluctuate based on the current market conditions.
Fourth, you need to decide whether to lock-in your loan or not. Locked in loan usually, carry better loan rates so most people choose this option. However, if you intend to dispose of your property early, it would be wise to not opt for a locked-in loan.
Fifth, some types of bank loan also allow an interest-offset loan package. Here the remaining balance of your loan that is still deposited in the bank is earning interest and this interest can be applied in paying off part of the loan amortization.
Sixth, there is also the interest-only loan package where the monthly repayments will only cover the interest portion of the financial assistance while the principal amount is only repaid at the end of the loan term.
Finally, when searching for the best Loan Company, compare the cumulative interest on the loan that they are offering. Cumulative interest is the total amount of interest paid for the duration of the loan. The lower the sum the lesser the interest rate would be.
How to get a loan approved is the basic problem that most loan applicants face. The basic answer to this question is that for any type of loans, approval will rely heavily on how Loan Company officers will rate your risk factor if ever your loan is approved. The risk factor is very important to lending companies when they try to see if you are a good fit to be provided with a monetary assistance. This is usually determined by the way you have filled and answered the basic question on your loan application and financial documents submitted.
Basically, there are two important questions that require answers when you file your loan application. The first question is whether you are a good or bad risk for the lending company and the second is whether the lending company will lose or earn money by providing you the loan. If both questions lead to positive replies, then you must have given the lender detailed and factual information relative to your capability in repaying the loan. Therefore the first finance tips for the day is to make sure that the information you have specified in your application and supporting financial documents will give the lenders the confidence that you will make good on your loan.
Second, make sure that you have at least an average or preferably above average credit score from Singapore’s credit Bureau. Credit scores usually range from 400 to 850 so the higher your credit score is, the better are the chances that your loan will be approved. For security purposes, it is advised that your credit score should be in the vicinity of 700 or more to ensure a better chance of approval. Make sure that your credit history will show that your past and present loan obligations are paid on time.
Lin the end, loan officers will not base their approval on your credit history because it cannot really determine whether or not you will repay the loan. However, your credit history will show whether you have managed your previous and current loan obligations properly and knowing this is an indication of how you will again manage your debt obligations in the future.
Having a bad credit rating can be quite a problem today, especially for people that highly depend on the type of loans to get them through the various day to day expenses. The worst part of it all is that most of the time, being placed in the category of loans for people with bad credit rating is really not the fault of individuals but is actually caused by the circumstances that have befallen them. Incidents such as losing their job and other economic reasons are usually why these people are unable to pay their bank loan obligations thus affecting their credit rating or score.
However, it is not the end of the world if you get into a situation where your credit standing has gone bad because there are ways and means to reverse the situation. The following are some finance tips to help you recover from a bad debt rating situation.
- First, you will need to find a way to pay off all your existing loans and credit card bills. This may sound impossible but if you believe in the saying that all problems have definite solutions then you will be able to find or at least plan a way to pay off your current debt. It may take a while, but this is a very manageable problem.
- Second, make sure that you land a steady job. Again, this may be hard, especially with the current economic situation at hand. However, it is not a job per se that is required of you, but proof of having a steady monthly income. Remember that with a little ingenuity and perseverance, you will be able to find a way to earn a steady income.
- Third, you can start a small business by applying for small loans. There are lending companies in Singapore that will allow you to borrow a certain amount of money as long as you can prepare and submit to them a business plan that would should at least a 70% success rate. If approved and your business gets off the ground, then this will allow you to earn enough to pay off some of your previous debt obligations.
- Fourth, if your credit card is still active, make small purchases on it. Being able to do this and paying it back promptly will give a positive effect on your credit rating. However, make sure that the purchases you make on the card are reasonable and small such as for just paying for groceries and meals. Make sure that you don’t apply for a new credit card and refuse a pre-approved or don’t cancel your active credit card because doing any of these three will affect your credit score tremendously.