In a pandemic, borrowing can help any individual or business owner stay afloat during this critical time. One of the most crucial decisions that are likely to affect your way of living in the future is to depend on debt consolidation loans in Singapore. Provided by financial firms such as banks and licensed moneylenders, these loans can be important to help you sustain during this difficult period.
To help you with the right steps forward, here are 5 top mistakes you should avoid when borrowing during a pandemic.
1. Making the Choice of a Loan Moratorium
Most licensed moneylenders in Singapore offer a grace period of up to three months with their loans. As such, if you own a business or currently face tight financial constraints, this can be beneficial for you. However, if you still have income or your business is in a position to repay the loan, then you should avoid loan moratorium. Rather than postponing a debt that you can pay today, you should seek to clear any financial goals that you have remaining, whether the pandemic continues or not.
2. Not Having Any Specific Problem
During a pandemic, you are bound to face many uncertainties. Due to the fear of the unknown, many people find themselves borrowing loans in the case that their future may worsen. Whether you are in a pandemic or a financial spot, you should always seek to only take well-calculated loans. This prevents you from unnecessarily spending money on irrelevant projects or fulfilling personal needs.
3. Accepting Unrealistic Repayment Terms
During a pandemic, you must be aware of the situation around you, be it on a business or family level. Therefore, do not simply take a loan with ordinary terms and conditions that may not be able to benefit you fully. Despite desperately needing a loan, it does not mean that you should accept terms where your financial situation will be affected negatively in the future. Always ensure that the loan you are obtaining is able to help you during the pandemic or any financial situation you are facing.
4. Securing the Wrong Type of Loan
There are many different types of loans in Singapore such as a quick loan. Each of them may be better than the other depending on the source or the need you wish to fulfil. Due to the fear that licensed moneylenders could soon hike their interest rates or change their terms, people may rush into applying any loans available at their disposal. Instead, you should take your time and weigh your options before making any decision.
5. Not Taking Into Account Other Licensed Moneylenders
A pandemic can be a burden both emotionally and financially for any individual. As such, one of the biggest mistakes is not spending enough time to do ample research for the loan. Doing so gives you the opportunity to seek out the best licensed moneylenders in Singapore with the terms that are most favourable to you. A few financial institutions may also include or incorporate extraordinary circumstances caused by the pandemic to their loans, so be alert when you seek other licensed moneylenders.
If you have an alternative way to solve your financial needs during a pandemic, you should utilise them. Depending on the loans you are seeking, consolidation loans in Singapore should be your last option. Instead, if you have no other options, then you should apply for loans that offer quick cash for your business.