We all have been there for some reason. Either get to apply for a loan because of some extreme personal emergencies or acquire some capital to set up a business, or a sudden medical emergency causing a huge amount of bills to be paid. All in all, there are a lot of ways where you might need a lot of money for emergency purposes.
Once we get the loan at a particular interest rate, it causes much other stressful stuff like the payment of the loans and avoiding defaulting and late fines. But in some unfortunate events, we are very likely to default on our loans.
In this case, we can always choose to consolidate our loans, and it is the process of taking in another loan to pay the previous dues. It helps in how there are no added interests, and the rate remains the same largely. The only disadvantage is that new loans do not get approved until the previous one is cleared.
There are various ways to consolidate your loans in Singapore, as approved by Singapore’s national bank. The centralized guidelines will help you with this. Here we will discuss some of those methods-
- Consult A Credit Counseling Agency And Choose A Suitable Debt Repayment Plan
Credit counseling companies are the business that analyses and studies your loans and credit history and keeps on providing suitable solutions for the loan repayment. They chalk out the plans and help you get the consolidation loans that you will require to pay the outlying debt. They carry put the programs after viewing your records and getting the essential documentation. They will put up a plan for you in exchange for a small payment. These advisory groups are beneficial to the customers because they carry out an extensive risk assessment before advising.
- Pay All The Unpaid Balance With A Credit Card With A Low-Interest Rate
This is another way how you can consolidate your loans. The payment is made through a credit card, and that ends up all the previous dues. Now here you have to choose a credit card with a low-interest rate and pay off the due debts. This will cause the loans to be consolidated for a much lower rate of interest. This is one of the most popular ways to get consolidation loans in Singapore and many other countries.
- You Can Also Consolidate Your Loans By Taking Out A Personal Loan
Keeping things in mind about how to pay your loans, you can apply for a personal loan and pay for it and consult an expert banker for a loan consolidation plan. The banker will go through different plans and compare personal loans in Singapore and choose the best one for your loan consolidation plan. This is one of the easiest ways out because it helps get the best deals and helps extend the loan with a suitable interest rate. This helps a lot of customers in getting the best deal for themselves.
- Use A Suitable Line Of Credit To Pay Off The Previous Loans
This will help get a suitable loan consolidation plan as it effectively transfers your balance to the low-interest rate, and new debt is credited on your name. A suitable line of credit will help you a lot in the debt consolidation plan. The credit line will help you look at all the different resources and materials and help you avail the best consolidation loan plan. You can use equity funds and set-up a suitable borrowing plan based on your home, car, or retirement plans. Such methods greatly ease the customer’s pressure and help in getting a greater grace period to pay off the debts.
- Borrow From Your Retirement Saving Plan
This is one of the ways that you can apply to pay for your outstanding balance. Such plans will help you avail of the amount from your retirement savings plans and pay off the creditors who hold the lien on you. Keeping that in mind, there are certain things regarding it that you should keep in mind. Availing a loan based on the retirement plan can offer you the greatest grace period and least hassle. However, this significantly reduces the security from your old age. So you should try this one step out when there is no other option available.
- Get A Personal Financial Manager For You
Finance managers are service providers by various financial institutions who will advise you and help you get through some of the toughest financial situations. They work in the same way as financial advisors but on a salaried basis by financial organizations. They will compare personal loans in Singapore and will guide you to get through the loan consolation plans.
- Borrow From Your Friends Or Family
One of the last resorts that you can rely on is your friends and family. They are always reliable and have a lot of flexible plans and proportions of paying off. So you can convince them regarding the plans and programs that you will use to pay them off. Otherwise, this will cause a lot of problems in the future, if you fail to pay them on time. This will cause many strained relationships between your friends, and family members added to that the lack of privacy because they will come to know about your financial problems. This will lead to very difficult family life if you fail to pay them off.
So as you can see, there a lot of ways to consolidate your loans in Singapore. But at the same time, it is advisable to keep in mind that financial problems may arise and happen to everyone. If not handled carefully, this can cause a lot of problems in your life. Hopefully, after going through this article, it will help you make better financial decisions and help you manage your credit history better. Debt consolidation is useful to avoid default. And this is one of the most helpful ways.