Loans are helpful in a variety of situations. Before we get into when getting a loan is a good idea, it is important to understand the different types of loans that are most commonly available.
Types Of Loans Available
- Payday Loans
Payday loans Singapore are short-term, unsecured loans. They are designed to tide people over in any financial crisis until their next pay check arrives.
- Personal Loans
A personal loan is to help individuals through financial situations. The loan can be used for a variety of personal reasons from dealing with medical emergencies to making a new purchase.
- Business Loans
Business loans are meant to help small to medium enterprises to expand their business operations. The loan can be used to help finance upgrade of equipment or to provide capital.
- Foreigner Loans
As said in its name, foreigner loans are for foreigners working in Singapore. As getting financial help while being in a foreign country might prove to be difficult, foreigner loans are a easy solution.
When Should I Take A Loan?
Credit Card Bill Repayment
Using several credit cards can cause one to have multiple credit card bills. With several different credit card bills to pay off at the end of the month, some people might end up carrying over the bill and incurring credit card interest rates on the outstanding amount.
By taking a loan to pay off each different credit card bill, all the charges would be consolidated into one monthly payment. This makes it easier to keep track of repayment. Furthermore, the interest rate on your loan might be lower than the interest rate on your credit card.
Repay Student Loans
Education is important, but also very expensive. If you are able to get a personal loan with an interest rate that is lower than what is offered by regular loan scheme, it will allow you to pay off your loan faster. In such cases, getting a loan is helpful.
Life Emergencies And Events
In our lives, it is inevitable that we will bump into emergencies where we need money fast. Some examples of such emergencies include medical emergencies and weddings. Such emergencies are time-sensitive and money is likely needed urgently.
Instead of charging the large sum of money to your credit card which you might not be able to pay off within a month, taking a loan might be advisable. This allows you to have a more flexible repayment schedule. Furthermore, if the interest rate on the loan is lower than that of on your credit card, it will be helpful to you in the long run.
Making Big Purchases
Using an instalment plan on your credit card to pay for big ticket purchases is best if the instalment plan as 0% interest rate. However, if your credit card charges interest rates, it might be better to take a loan with a lower interest rate than that of the credit card instalment plan. Furthermore, taking a loan might mean having a fixed monthly payment that is more easily managed.
