It’s not good to be in debt, especially when you feel yourself running out of wriggle room and trapped in the vicious cycle of taking new loans to pay off old ones. This is quite a complicated situation but one has to keep in mind that it’s often self-created by most borrowers. There’s no point getting stuck in the loan cycle for your entire life. Let us dig deeper and find out more about this financial mess…
It’s easy to get stuck in the loan cycle
Instant cash loans in Singapore are unsecured loans that are taken by people who need an instant monetary top up to overcome an urgent cash crunch. You only need to possess a valid bank account and a full-time job. Now, the lenders will usually charge a very high-interest rate on an instant cash loan, which accumulates to a huge sum over a period of 5 or 6 months. Even though the lenders advertise these loans as short-term but on average, borrowers of such loans stay in debt for over 6 months. The processing fee too is extremely high, so the borrower needs to take this into account as well.
Now, when we consider all the above factors, it’s needless to say that the borrowers availing instant cash loans will certainly be heading to a disaster if they don’t plan well. Here’s a list of things that can help you to avoid the usual pitfalls associated with instant cash loans in Singapore:
Avail an instant cash loan only when there’re no other options
Getting an instant cash loan is an easy way out of a financial crisis. However, you must keep in mind that the interest rates on such loans tend to be higher and you’ll have to repay much more than what you get if you delay your payments. You should explore all the other options like borrowing from friends, colleagues, and family members. In case the need for cash isn’t that urgent then you can even seek a traditional bank loan as they have a longer repayment period, are secured and carry lower interest rates.
Plan your repayment
All lenders need your bank account as they would auto-debit your account every month as repayment. A robust repayment plan should be in place because you don’t want to pay overdraft charges every month by not maintaining the requisite funds in your bank account. Every month, try to set aside a fixed amount as an instalment for your loan repayment so that your account has the necessary funds for repayment.