5 Questions to Ask Yourself Before Getting into Debt
In our current fast pace society with ever growing needs, it has become almost impossible to live without debts. Be it taking a loan to buy a car, a home or even to finance our own needs. The most important thing is for us to pay off the debts to avoid incurring unnecessary penalties and costs. Paying debts early can save you a lot of money and hassle in future. It is also very critical to understand that getting into debt is a big responsibility. You must be ready to handle it. Too much debt will get you into a lot of trouble. Therefore, ask yourself the following questions to determine whether you are ready to handle the responsibility that debts can be.
1. Do I really need it in the first place?
Most of the times, we find ourselves buying needs we do not need at all. For instance, we are at times obsessed with the latest fashion trends, the latest technology or attending a very expensive event in town. Due to our wants of being equal with the rest which leads most into accumulating debts they will never recover from.
2. Is there another way I can pay for my items?
Most of the times, you will find out that many products are subsidized while others can be acquired through grants. One of the simplest and most efficient ways to pay for an item is by selling an old one and topping up money for a new one. It significantly reduces the cost of the new product you are wishing to buy.
Look out for online marketplaces with cheaper deals or even go for second hand products. Many Singaporeans have embrace the second hand market and it is fast becoming a booming economy.
3. I already have other monthly expenses. Can I still afford it?
Evaluate your financial standing by tracking your budget. This can be easily be done through a spreadsheet or an application. Establish how much money you have after deducting all of your expenses, savings and borrowings. After getting the amount of money left you can decide whether the product you want to buy is still worth it.
4. How much do I have to pay every month?
To maintain a healthy financial status, it is advisable not to give out more than 35% of your gross earnings on the debts you have.
5. How long will it take to pay off my loan?
The longer the repayment period, the more the money you are going to pay in the long run. Get comparisons from different packages and companies to ensure that you have made an informed decision. Evaluate their interest rates and cumulative interest rates and determine whether you are in a position to handle the debt.
Let the officers give you a manageable repayment period and terms that will not jeopardize your financial status.
If you are looking for a debt consolidation and have been rejected by banks, consider getting a consolidation loan from licensed moneylenders. If you are looking for a personal loan, we will be able to help you as well!
As the best moneylender in Singapore, we will be able to work out a repayment plan for you. Consolidating all your loans is a great choice due to the convenience. Look for us today if you need a loan! Or fill in an application form for us to check if you are able to get a loan from us 🙂