Finding The Right Loan Suitable For Your Financial Situation

With millions of people all around the world and in Singapore having to go by on days without money, and with the consideration that majority of the population relies on a paycheck to paycheck, staying afloat in such a crisis can be daunting.

In an attempt to help, organizations such as the Federal Reserve have dropped their interest rates to zero, and you can also borrow an instant loan in Singapore to stay afloat.

In addition to an instant loan, below are some of the credits to take and what to avoid.

Payday loans

Payday loans, also known as cash advances, are one of the worst types to borrow during a crisis. While these loans are generally short term and pretty much easy to get, the interests rise exponentially.

In addition to the interests, service fee charges make these loans extremely expensive. The cumulative annual interest percentage usually ranges from 300% to 400%, which makes this type of loan one that you should avoid.

Personal loans

Personal loans, also known as insecure loans, do not need collateral against which to borrow. This feature makes the loans particularly great for those who don’t have much equity, but the downside of it is that the loans might be expensive.

This loan is suited for small amounts – generally less than $35,000 since the credits get deducted automatically from your account. Hence, there won’t be any chances to default.

With the significant number of licensed moneylenders in the market, the average interest rate of unsecured loans is about 11%, which makes it efficient and reliable.

Credit card cash advance

Credit card cash advances are one of the most common, yet one of the most expensive ways for you to borrow money. From paying for the transaction fees ranging from 5% to 7% of the advance amount to high-interest rates, the cumulative interest rate can go up to 28%.

While it’s advisable to minimize cash advances altogether, they can save you when you have a mammoth of bad options out there. Trying to obtain a quick loan in Singapore could very well be the better option.

Debt consolidation loans

Debt consolidation loans in Singapore provide a repayment scheme that can ensure that all of your unsecured debt is piled into one big loan with one big bank. This means that the bank will close off all your outstanding debts, including unsecured accounts, ensuring that you simply need to only focus on one monthly repayment.

While there are different banks offering debt consolidation loans varying from 3.8% interest rate to 4.58% interest rate, it is best to know that to acquire one is not easy. You have to accrue an annual income between $30,000 and $120,000, and you have to also be heavily in debt to qualify.

However, if you don’t qualify for a debt consolidation loan, that is good news too. This means that your outstanding debt hasn’t reached your annual salary yet.

Conclusion

In the face of a lockdown, the current situation has not only posed severe health risks but has also ravaged the economy. Beyond the obvious need to stay afloat in trying to achieve financial freedom, you also need to manage your borrowing amounts. It is best to remember that your debts from any quick cash loan should never exceed your credits.

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