Introduction
Do you sometimes feel like your life is just one big struggle to squeeze the ends together in Singapore? You’re not alone. As the living costs go up, finding extra income is a challenge for many people. But, once you start borrowing funds, the whole process can be rather discouraging, especially if you need to find a reliable moneylender who will not dig a hole in the purse. Do not worry because we’ll help you out with five smart ways to save money on creditors and be a smart spender.
1. Understand Your Financial Situation
The very first thing you have to do is to consider your financial condition before you make a move to a money lender. Take an HONEST look at your INCOME and EXPENSES. Find the areas where you can avoid using the money unnecessarily. Your next step should be to calculate the exact amount you need to borrow with a clear vision. This step is significant to prevent you from borrowing too much and creating a debt that you don’t need.
Evaluate your current income and expenses.
Begin with a concrete list of all the income sources that you generate from your job, side business, and passive income. Next, do a detailed analysis of your monthly expenses, inclusive of rent, electricity, transportation, food, and any other ongoing expenses. Here is the task that will lead you to pinpoint where you are wasting money and where you can save it up.
Determine the amount you need to borrow
On your income and expenses, do a budget to know the exact amount you need to borrow. It makes it so easy to borrow more than you need, so don’t give in to that temptation. Taking only the amount you need for financing will incur low interest and fees.
2. Research and Compare Moneylenders
Not all money lenders are created the same. Some have superior terms and conditions to others. Therefore, it is important to shop around and compare the deals. Start with the checking of the trustworthiness and credibility of the lender.
Check the lender’s credibility and reputation.
Make sure that you find a moneylender who has both the registration and the license from the authorities in Singapore. Read online reviews and testimonials to see if they have a good reputation with their customers. An honest moneylender grants loans with honesty and transparency.
Compare interest rates and fees.
The rates of interest and charges can differ tremendously from one moneylender to another. Look at the Annual Percentage Rate (APR) plus the possible additional fees or charges. Advertised interest rate is not the only thing to consider. Rather, the overall cost of borrowing should be the focus.
3. Negotiate for Better Terms
Don’t let the fear of negotiation with moneylenders for better rates prevent you. Keep in mind that they’re the suppliers, and they need your patronage. Construct a compelling storyline to argue you are a better candidate for a loan.
Prepare your case for negotiation.
Assemble your creditworthiness documents, like your steady job, good credit score, credit rating and any assets or collaterals available. Be confident in your low-risk status, telling them that you are very likely to return the loan on time.
Highlight your strengths and creditworthiness.
In the course of negotiations, draw attention to your company’s strengths and creditworthiness. Showcase your stable income with a low debt-to-income ratio, among others, that can prove your debt servicing capability. But, at the same time, be confident and assertive while showing respect and professionalism.
4. Consider Alternative Lending Options
Whereas mainstream moneylenders remain among the most popular, they are not the only ones available on the market. Review the options like micro-lending which may have better deals or that fit your particular circumstances.
Peer-to-peer lending platforms
Peer-to-peer (P2P) lending platforms link borrowers with individual investors directly and generally, the interest rates are low and the terms flexible. The application process is usually simple, and they use cutting-edge models for risk assessment.
Borrowing from family or friends
If you have a solid social network, you may wish to take advantage of loans from family or friends. Although this option may seem tricky at times, it may sometimes provide better conditions and a deeper understanding of your situation. But make sure you do it like a formal deal and keep up with the communication.
5. Improve Your Credit Score
The credit score that you have is a very important determining factor for the lenders about the interest rates and terms that you may be offered. Through building credit, you can present yourself favorably in the financial world.
Pay bills on time
The most powerful method of increasing your credit score is to pay your bills on time on an ongoing basis. You can negatively impact your credit score by the late payments; therefore, set up reminders or automatic payments to guarantee that you never miss a payment due date.
Reduce outstanding debts
Additionally, your credit score will be negatively impacted if your level of outstanding debt is high. Do your best to pay your debt from your highest interest to your lowest interest. This will, on the other hand, not only improve your credit score but also the interest payments you make.
6. Seek Professional Advice
If you already feel overwhelmed or your personal financial situation is complicated, avail yourself of the professional services of a qualified financial advisor or credit counselor.
Consult a financial advisor.
Through their personalized guidance, financial advisors can assist you in making decisions based on your particular circumstances. They are able to do all this for you, like evaluating your options, mediating with creditors, and creating a personalized roadmap to your goals.
Understand the terms and conditions.
Don’t sign any loan agreement until you have carefully read and understood the contract terms. There is nothing to be afraid of when you need to ask questions and seek clarification on everything you do not understand. A trustworthy lender should not hesitate in any way to give as much information as needed.
Conclusion
The task of finding a trustworthy moneylender in Singapore and getting favorable conditions for the credit should be a tough decision. Knowing your situation, looking into various options and comparing them thoroughly, discussing the terms and conditions, exploring other options of finance and working on the credit, and turning to professionals whenever you feel the need, you can end up paying less but getting more from moneylenders.
Note that responsible borrowing is the main thing. Eat what is essential and know how much money you have and how to repay it. Having these five strategies in mind, you’ll have already come a long way toward achieving financial stability and peace of mind.