Indeed, personal loans are a good option in various circumstances. First, let us understand personal loans. Some loans are earmarked for specific goods or services. For example, you can buy a home with a mortgage loan. You can buy a car with an auto loan. You can pay a college debt with a student loan.
However, you can use personal loans in almost anything. Some lenders wanted to know about you before they lend you all the money. However, as long as you use the borrowed money for a legal reason and you are a responsible payer, then you can do anything with it.
But what does this mean for you? In a mortgage, your collateral is your home. With an auto loan, the collateral is your car. Since an auto loan has no collateral, it is often referred to as an unsecured loan. As such, the interest rate is higher. If you want to lower your costs, there are also secured personal loans offered by some lenders.
Here are some circumstances in which you can use a personal loan:
Achieve your Dream Wedding
Large events like your wedding will qualify for a personal loan at Easy Credit SG. This is true if you end up putting all the associated charges on your credit card and you didn’t pay them within a month.
On large expenses like this, a personal loan will save you a considerable amount on interest charges. Provided, it will have a lower rate versus your credit card.
Combine Credit Cards
If one or more of your credit cards are charged to the max, you can opt for a personal loan at Easy Credit SG. This will help you consolidate all your charges into one monthly payment. Moreover, the interest rate on this type of loan can be lower in comparison with your annual percentage rates or APR of your credit cards.
Finance Goods or Services
Financing a purchase will depend on whether or not it is a want or need. If you are going to take out a personal loan Singapore, having a personal loan and paying the seller in cash can be the better deal versus financing through the seller.
Make sure that you don’t make a mistake of financing on the spot. Ask the seller of the things that he can offer. Compare it on what you can get through a personal loan. Thereafter, decide which is the best choice that you can have.
Improve Your Credit
A personal loan can help you improve your credit score in various ways. First, whenever your credit report shows mostly of your credit card debt, a personal loan will help you have a good account mix. If you have various types of loans, it will often be favorable to your score. For bad credit, the best personal loans are those with limited options. However, they are still a better method than payday loans.
Next, it can lower down your credit utilization ratio. This refers to the amount of total credit that you use versus your credit limit. Remember that the lower the amount of the total credit that you use, the better your score will be. With a personal loan, it will increase the total amount that you have which is available to use. When you can pay back the loan on time, it will be good at improving your credit score.
Refinance your Student Loans
Having a personal loan Singapore can refinance your student loans and provide you with financial relief. Take note, the interest in your student loan can be 6.8% or higher, depending on the kind of loan that you have. However, you can have a personal loan with a lower interest that will allow you to pay off the loan/s that you have.
Student loans have tax advantages. If the legislators are going to offer a loan forgiveness program soon, your refinanced student loans are not eligible.
If you are going to use a personal loan to pay off a portion or all of your student loan, you can lose the ability to deduct your interest payments. This is true when you file your income taxes along with the benefits that would come on such loans. For example, would be deferment and forbearance. Moreover, if your balance is sizable, perhaps a personal loan will not cover it anyway. Make sure that you think through all of these issues very carefully before thinking about how to refinance your student loans.
Indeed, personal loans are very helpful, with the right circumstances. For example, some people can’t afford to pay cash in buying their home. As such, a mortgage loan is necessary. However, be sure that you consult first with a trustworthy financial company so you can be able to weigh your options accordingly.