With so many financial obligations pulling at your wallet, it can’t be easy to repay the loan you took out from the best money lender in Singapore. Or worse, you no longer have enough for it. Hopefully, this hasn’t been the case for you, but if you’re struggling to make loan payments, here are some tips that can help you out.
Make Budgeting a Non-Negotiable
If you think you make enough to pay your loan but wondering where your money goes, you need to sit down and take budgeting seriously. Recall your expenses and compare them with your income. After that, ask yourself: where can you cut back? Maybe it’s that one streaming subscription you barely use or added food deliveries. A little sacrifice should help you free up some cash to pay back that loan.
Loan Repayment Priority
Pay your loans in full and on time. Make them your priority on the list of who you will pay your rent. Do you pay them on the last day or set aside the moment you get your paycheck? A simple mindset change makes all the difference.
One gimmick? Direct debits. Most Singapore banks have standing instructions or GIRO set-ups for recurring bills. It’s managed before you even have a chance to spend it somewhere else. This keeps you consistent and saves you money in late fees, which accumulate quite fast.
Track your fixed costs
Is your income being swallowed up by monthly bills? Housing and the cost of utilities and transport in Singapore are not a laughing matter. If this can’t work in your favor, it’s time to take a hard look at these costs.
Do you spend on easy and convenient things, say Grab rides instead of riding the public transport? Do you do retail therapy? Maybe you should cut down on these things. Adjustments can feel like small sacrifices, but they are smart decisions that give you room for breathing financial space.
Think Refinance or Consolidate
Do your loan interest rates become too high, and the repayment term too long? Then you may need to refinance. Singapore lenders allow loan refinancing, whose primary aim is reducing your interest with easy monthly repayments manageable for you.
Consolidation of many loans into one can also make life simpler. Imagine a single reduced monthly payment instead of juggling with a number of ones. That alone can sometimes be worth talking with your lender about as some adjustment in terms makes a big difference.
Save for an Emergency Fund
With an emergency fund, you will be able to easily pay your monthly loan repayment during times when you’re struggling. By just committing a few hundred dollars a month, you will be able to build a finance cushion that ensures you can still repay your loan in those unexpected emergencies. Think of it as your buffer against the unexpected.
Invest Your Windfalls Wisely.
You get some unexpected money, for example, as a bonus, a tax rebate, or even an ang pao during Chinese New Year. What do you do? Do you splurge on something fun, or might you use part of it to pay down your loan?
This is in no way saying that one shouldn’t have small merry time using whatever windfalls there are in chipping away at the balance of a loan. Instead, it should be a balancing act between their future and present. Even paying a fraction of that extra money toward the loan decreases the interest and gets one closer to debt freedom.
Another Income Earned
If you don’t want to cut down on anything and don’t have much savings stashed away, you can do a one-time side job or a short-term part-time job. Do some freelance projects, deliver food in your spare time, or do some private tutoring – the important thing is that you’re earning to pay your financial obligation. You can also sell unwanted items. This can be especially helpful if you have plans to declutter anyway.
Talk to Your Lender
Some licensed moneylenders in Singapore are willing to talk and work with borrowers regarding any trouble they may be undergoing while making repayments.
If you cannot pay in full and on time, contact your lender and ask if some temporary arrangement can be made. This way, you can find a compromise where you both benefit. Regardless of whether you’ll be approved or not, telling them about your current problem shows earnestness and willingness to pay on your part. This, however, isn’t something you can always do, and they will only give you leeway if you’ve been regularly repaying the due amount in the past months.
Do Not Take Out an Additional Loan
Hre’s the trap for some people: when they realize that cash is in short supply, they think of borrowing more to fill the gap. But more debt piles on, making repayment all that harder.
Pay off your existing loans first. MAS has constructed several safeguards against over-borrowing, but you have to be disciplined enough. Cut down on your expenses and avoid even more debt.
Conclusion
Paying off loans doesn’t mean life imprisonment in money matters. It’s just a matter of staying smart with budgeting, and in some cases, bringing in some extra income, or talking to your lender about it. And with discipline and the right attitude, paying off your loans will be less and less of a challenge.