Finance

Why should we apply for a personal loan to clear debt?

Whenever the topic comes to a loan, everyone has the same question in mind if you live in any country, but we will be talking about where to borrow money in Singapore which is such a big country and also is called as the world’s business capital due to presence of many companies as well as banks.

There are many professionals here in Singapore such as you can become a banker, salesman, sales manager, grab driver, Uber driver, bank manager, businessman etc. Due to the presence of so many companies, there are lots of job opportunities here in Singapore and according to their opportunities that are several types of loan that banks and also financial institution provide for all the people who live in Singapore.

Most people think that the grab driver in Singapore cannot take a loan as they have a bad credit score but that not the point as there is grab driver personal loan present here in Singapore irrespective of their credit score and also their repayment history.

There are also loans for all those people who don’t have a proper job and work anywhere they can get so that they have enough money to feed their family as well as their children. These people who have gone literally bankrupt also have the option to take a loan for a certain period of time, but the big thing is that they have the least rate of interest.

In Singapore, there are many people like some people are modern while some people still live in villages and do not believe in the evolution of technology and also do not think that technology can help to save their lives from any kind of dangers they are facing in the world like any death threat or even technology can help them and also diagnose and help to deliver a solution to the disease that they are facing and will help them dully to overcome it.

Ten reasons to use a personal loan to clear debts

Here is the list of all the ten reasons:-

  • Lower interest rate:-

A personal loan has comparatively less rate of interest than credit card debt as the debt created by credit card increases due to the increase in the gap from where you took the loan until the time when you have repaid the amount of loan you have taken from them.

  • Consolidated payment:-

A personal loan provides a way in which you can take a debt consolidation plan in which you have a less rate of interest when compared to all the other loan in the market.

This is the best plan if you want to pay off any remaining debt that you have such as a credit card debt as you will have to use much more money to repay the loan than the actual amount for which you have made the payment for.

  • Defined debt-free date:-

At the time while you are taking this loan, the lender will calculate the EMI in front of you and will also include the extra days which he or she will give in case you fail to pay it on time.

And when you make the monthly instalment of a personal loan which has very less amount of interest, then the borrower feels relieved that they didn’t have to pay so much money before to the credit card debt.

In a personal loan, the repayment debt is fixed and already decided between both the parties, but in credit card debt repayment the date is not fixed, and it revolves around until the company asks or the borrower has the money to repay it back.

  • Improve credit score:-

If you take a credit card debt, then it will take you a long time to pay back if you don’t have enough money to pay it back so it will show the effect on your credit score as repayment is done very late and will reduce your score.

While in a personal loan you have EMI option through which you can improve your credit score by paying the loan back in the given time.

  • Pay down other debt:-

You can also take a personal loan to pay another kind of debts like mortgage loan debt, credit card debt, automobile loan debt etc.

  •  Review the list of debts and rate:-

You can make a list of all the debts that are pending by you to pay and then you can also note down all the amount of interest accumulated and jot it down into a list.

After making a list, you will know the exact amount for which you have to take a personal loan and pay off to everyone.

  • Pay off the old card with loan proceeds:-

Whenever you apply for a loan you will either get a cheque on the spot, or you will get all the cash transferred to your bank account, but you should not look at the big amount and spend it all on things that you don’t require.

  •  Making the minimum payment is not an option:-

In a personal loan, the provider will also force you to take a big amount to pay off the debt and then will provide you at a low rate of interest so that you are debt-free and can now pay back the amount of loan taken in EMI.

  •  A shift from revolving to instalment debt:-

When you shift from revolving to paying the whole amount of loan in one time, then your credit score will increase by almost 30% of what you lost while you were in debt.

  • Put yourself on debt freedom schedule:-

In this debt consolidation plan, you have three major benefits like you can make the whole payment if the total loan in just one month of payment, you will get it at a much lower rate of interest, and also the last benefit is that they will promise you a date on which they will clear all the payment, and you will be totally free from any kind of debt from that period on.

Back to top button
Close
Close