Several loans when pooled together become one large debt. And, then later it becomes like a pile of unresolved debts. So, in such a scenario you may wish to consider debt consolidation loans. In this guide, we look at what is exactly a debt consolidation and the pros and cons of the same in Singapore.
To pay off several other kinds of consumer debts, debt consolidation is a type of loan that is taken for the same. These forms of loans do not help you to get rid of the loan, but they just change all the liability to a different lender i.e. debt consolidation loan money lender, in the form of a lump sum. It is one of the best types of payment options for people who have challenges managing the different types of loans. It is for people who would like to get rid of outstanding balances (high interest) from their credit cards.
Loans for Wedding –
In Singapore, there are many financial institutions that offer people the chance to use the consolidation loan facility. One of the best parts that you will know about this type of loan is that it helps in taking away a person’s financial strain and stress and you can pay off the loans to all your debtors from your monthly income. It allows you to concentrate on the repayment of a single loan amount. Many people also have this question can you get personal loans for a wedding in Singapore? The answer is yes. For Singapore PRs and citizens, it grants up to 4 times your monthly salary or even six times your monthly salary, if your annual income is $120,000 and above. The annual interest rate is 20.9%.
Pros Of Debt Consolidation
Single Monthly Payments
In order to combine your debt, your monthly input is reduced and turned into a single payment, which reduces the chances of late payments or missed payments. Plus, dealing with the credit facilities would mean that you only write one cheque and it saves a lot of energy and time. In debt consolidation, the individual understands the tenure of the loans and credit card debt and then he can consolidate the remaining into a low percentage, making it very simple to pay off the loans and make progress.
Saving Capital in Long Run
In debt consolidation, the loans are managed very well and the individual saves the money from their income and in their budget, instead of spending the complete amount on paying off the bills monthly.
Proper Management of Debts
If you can hardly make any payments every month because of your low income, then in such a scenario the debt consolidation loan will help in catching up with your payments and moving ahead. It will greatly take off the financial stress.
Many of them would also like to know which lender is best renovation loan Singapore? DBS green renovation loan is the best one with a 3.68% annual interest rate and with a $300 processing fee and you pay monthly $881. Then, HSBC personal loan is also a good lender with no processing fee and an annual interest rate of 3.2% and you pay monthly $913. You can check the link mentioned above for more details.
Cons of Debt Consolidation
Chances of Getting into Debt Pool
For some gamblers, it means having more money to spend and thus getting into a pool of more debts. And, having a single payment means you should have more funds.
Longer Time to Repay
If you take time to pay the loan this would mean that in a long run you have to pay greater interest. To avoid this concentrate on paying off your debt as fast as possible.
Bad Financial Practises
Debt consolidation becomes a demerit when the borrowers lose their focus on paying the debt and use the process for their well-being. If you fail to pay then you can end up having more loans.