Debt Consolidation Loan

Debt Consolidation Loan

Borrowing from banks, moneylenders, or credit card companies is a common affair. It is not a problem to turn to these resources for financial help to fund oneself through difficult times, or to finance big-ticket things in life. However, it can become an issue when a person borrows from too many different creditors.

Missed payments and accumulated interests, on top of having multiple payments to keep track of, create a lot of stress for the debtor. One way to ease the mental and financial burden of having multiple loans is by taking up a debt consolidation loan. It might seem counter-intuitive to take up another loan to clear off one’s loans – but in fact, it can be a wise choice in the long run.

What is a debt consolidation loan?

Debt Consolidation Loan Singapore

A debt consolidation loan or debt consolidation plan is a loan taken to turn multiple debts into one easy-to-manage debt. Typically, debt consolidation loans in Singapore have lower interest rates and longer tenures than the usual personal loan or bank loan.

Who is this loan suitable for?

Singapore Debt Consolidation Loan

Debt consolidation loans are suitable for those who have outstanding debts with multiple creditors. Generally, this type of loan is advisable if you have a debt with a balance of more than 12 times your monthly salary, or for large amounts above $10,000.

Other signs that you might benefit from a debt consolidation loan is when you find yourself unable to keep track of your multiple debts, and accidentally defaulting on payments. Having multiple loans with very high interest rates is also a worthy reason to consider transferring your debts to a debt consolidation plan.

What are the benefits of a debt consolidation loan?

Consolidation Loans Singapore

If you are struggling with multiple debts, you should consider taking up a debt consolidation loan in Singapore. Here are some benefits you get to enjoy when you take up a debt consolidation loan:

  • Keep track of your debt with ease

By consolidating your loans into one place, it is easier to keep track of the payments you need to make. You’ll have fewer opportunities to forget or default on your payments, and have a lower risk of incurring exorbitant penalty fees. All you have to do is make one payment per month. With some plans, you can even make this payment automatically.

  • Cut down on interest rates

When you have multiple debts with different creditors, the interest rates can really add up. Compounding this over time accumulates a hefty sum that you need to pay. Instead, collapsing your debt into one will significantly streamline the interest rate, and save you a remarkable sum in the long-run.

  • Reduce stress

Debts are stressful not just because of the financial aspect of it, but also the psychological aspect. Having multiple creditors means getting numerous calls and letters from them each month, which can be very stress-inducing. With a debt consolidation loan, you only need to have one point of contact.

Where can you apply for a debt consolidation loan?

Singapore Consolidation Loans

If you are interested in taking up a debt consolidation loan in Singapore, you can consider banks or licensed moneylenders. It will be good to compare the different debt consolidation loans in Singapore with their eligibility requirements and loan terms to find one that is suitable for your situation. The right loan plan should assist you in streamlining your debts and help you clear your debts quicker, with less stress.

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