Singapore is one of the best countries to live in due to many compelling reasons, such as its developed and robust economy as well as its exceptionally high quality of life, to name a few. However, these benefits are not without their disadvantages – those blessed to be born in the country might have to face a higher cost of living.
As a means to get around this situation, licensed moneylenders in Singapore offer loans to help anyone who may need assistance in securing the key essentials in life, such as a home, a car, proper education, and even capital for a business. However, if the loans taken are not appropriately managed, one can risk decreasing their credit scores; thus, negatively affecting their finances. Thankfully, debt consolidation loans exist to prevent that, but how do you know if it is the right time to take one? Read on to learn the telltale signs below.
What Is A Debt Consolidation Plan? When Is It Right To Take One?
Debt consolidation is an effective strategy for handling debts by combining or consolidating all of your existing loans into one account. This method allows you to better manage your debt (since there’s only one to focus on now), and it equalises the interest you need to pay; thus, essentially saving you from accruing more debt from high-interest loans.
Regarding the appropriate time to take such a loan, the primary deciding factor depends on your disposable income. If your dues are beginning to exceed what you can comfortably part with every month, then it’s the best time to consolidate what you owe. Aside from the example given above, let’s discuss several more reasons to take a debt consolidation loan.
Telltale Signs That You Should Apply For Debt Consolidation
You’re paying too much interest
If most of your debts have a considerably high interest rate, you’ll be able to save more down the line if you pay them off with a debt consolidation loan instead since it has a more reasonable interest rate and terms.
You can only pay the minimum due or interest each month
If you feel like you might be unable to pay more than the minimum dues of your loans, it is possible that your debts are beyond what you may handle. Once you see little to no improvements even after adjusting your lifestyle temporarily, it may be time to get a debt consolidation plan.
You forgot to pay some of your loans
Without proper management, it can be easy to lose track of some of the payables you need to address every month. If you’ve missed out on a few payments, paying them all at once with a debt consolidation plan saves you from further penalties and allows you to focus on a single loan.
You want to pay off your debts and improve your credit score
Paying off your debts in full and fulfilling your financial obligations can significantly help in improving your credit score standing; securing your financial future. With debt consolidation, you eliminate the risk of delinquency or default since you would only need to repay one creditor instead of many.
Seeing as how easy it can be to acquire instant cash loans these days, it might be tempting to take on multiple loans at once if you find that one may not be enough for your needs. Hence, debt consolidation is an ideal solution to make your debt simpler to tackle.