There is a common misconception that a personal loan is merely causing you to accumulate more debts. This is why people try to stay away from a loan as much as possible. They are afraid of being branded as someone who owes a lot of money, which they think does not make them look too good. But the question is, does it really work this way? Does having a loan really give people an impression of having so much debts?
The fact is that a personal loan is not at all synonymous with accumulating debts. It is even safe to say that taking up a personal loan from licensed money lender in Singapore may be a necessity as it helps you stay out of a difficult situation when you have tried everything you could to get some extra funds. You probably have an urgent bill that needs to be paid, or perhaps a major repair for your car you can never put off for another day. If these are the situations you encounter, then taking out a low income personal loan to cover for the expenses linked with these circumstances should not be bad at all.
There is nothing to worry about taking out a fast cash personal loan. You can even use it to spare yourself from serious stress when you have done all that you could do get the funds you need, yet without any success. The best way to put it is by treating a personal loan as more of a tool. It is your way to get out of a tough situation without putting yourself in deeper water. The idea is by repaying the loan punctually, which does not only prevent you from penalties placed on top of the loaned amount, but also as a way to improve your credit score.
The following are just some of the reasons why a personal loan can be beneficial to anyone’s life.
1. Have more opportunities to come your way
Are you thinking of undergoing further studies or training for a career opportunity? In this case, a personal should come in handy to cover the payments you need to make for the expenses linked with pursuing these goals. Instead of taking money out of your bank savings, a personal loan can be useful when you need cash for your tuition or training fee. For instance, you may want to take out $30,000 worth of loan for a training programme that is relevant to your career. This may sound like a huge amount of money, but if you can pay it off according to the term set by the Singapore licensed money lender or bank, then it should be worth it. Plus, the payments may only be as small as $100 every month. A longer duration for the loan even makes the monthly payment much smaller, thus making it more affordable for you.
In the end, the loan is worth it because after going through the training, you can perhaps get a promotion on your job. Then, this will positively impact your salary and further career opportunities can surely come your way.
2. Get more credit from a personal loan
It is inevitable to experience emergencies in life. There are just some moments when you will need some money to pay off an immediate expense whether it is for your car, health, or something else. So, when times like these arise, a personal loan can offer you the extra credit you need – and fast.
With credit cards, there is a 24 percent interest rate per year. As for pawn shops, a 12 percent interest is added to your loaned amount. But if you take out a loan from a money lender, the interest rate you can expect is within 6 to 8 percent annually, which is not bad at all, considering all the other options you have.
But be sure to only use a personal loan when there is an emergency. Using it for shallow reasons such as to buy a pricey gadget or branded apparel is not quite ideal since you can always save some money for these purchases. But if you need additional funds for a medical bill or a utility expenses that must be paid off immediately, then a personal loan should be a viable option to consider.
3. Work on your credit score with the help of a personal loan
Your credit score means so much to you. Mainly, it is what makes you more eligible for a loan that you may want to take out in the future such as a payday loan, housing loan, car loan, or business loan. If your credit rating is good, then there should not be much problem when it comes to taking out a loan. Banks consider your credit rating as a determining factor for your creditworthiness. If you have a poor credit score, then this does not make you seem too appealing to financial institutions. You will surely have a problem borrowing money when the time comes if your credit history is not all that positive right now.
So, if you are serious about improving your credit score, you should work towards making prompt payments on your loan. If you borrow a small amount, and you are able to make regular payments for it, then it should not take very long before your credit score becomes more favorable. At the same time, you may even qualify for a higher amount of money for a loan, which works to your advantage.
4. It is safe to get a personal loan
The truth is that it is rare for any individual to default on their personal loan. People are always able to repay a personal loan because of the low fees involved with it, along with the option to spread the loan into longer terms. An insurance option may even be packaged with your personal loan. In some cases, the insurance is at $100, which covers the entire loan you take out. This means that if the event comes that you are not able to pay off the loan, this insurance should be able to cover the remaining amount you need to settle.
Then, there is the lower interest rate that comes with a personal loan. What’s more, some promotions are offered by money lenders or banks, which add to the deal you get for your loaned amount. Some banks even offer interest-free personal loans within 3 months to as long as a year in some cases. The idea is that you should look for a loan that comes with a reasonable interest rate suitable to your financial situation. Then, be sure to review the terms and conditions of the loan provider, so you can prevent any difficulties with repaying your debts.
5. Minimise stressful situations with the help of a personal loan
Is there an upcoming event that requires you to have a certain amount of money ready to pay for all the expenses involved with it? Perhaps your wedding is coming up, or you are supposed to go through surgery, which are both linked with massive expenses. No matter what situation it is that will cost you some money, a personal loan should be helpful when you want to go through these tough moments in your life. In fact, a personal loan can be a true life saver because you can count on it for extra money that you need when you have little money saved in the bank.
If ever you have some money, it is not actually a good idea to deplete your savings to cover for such unexpected expenses. A personal loan allows you to get by these surprises in life, yet without causing your financial stress. With smaller payments you may each month, you can overcome these financial difficulties and maintain your life savings without any problem at all. Just make it a point to repay your loan punctually, so you will not encounter further financial stress while getting rid of debts the soonest possible time.