The Worst Debt Consolidation Mistakes to Avoid

Money Lender Handing Money

Debt consolidation is when you take out a loan in hopes of eliminating your other debts. It is rather paradoxical because you will acquire another debt in the process, but it can be highly effective when executed properly.

To find a legal money lender in Singapore and make the most out of this gamble, avoid these terrible mistakes:

Opting Not to Consolidate Debts Due to Bad Credit

A common error of individuals with bad credit is thinking that debt consolidation is not a viable option because of their situation. It may be hard to find a lender who is willing to extend you credit when your credentials say that you will likely default on your loan, but there are suitable financial products for you. Although they may come with high interest, they can surely help you reduce your overall indebtedness.

Applying for a Debt Consolidation Mortgage

Many deeply indebted individuals choose to refinance their mortgage to access extra cash to cover other debts with higher interest. Borrowing against your property again may work wonders, but it involves major long-term consequences.

Firstly, it will reset the clock of your mortgage, which means you will go back from the start and possibly offset the gains you have made after paying it for years. Secondly, you may expose yourself to a greater likelihood of foreclosure.

Shunning Credit Counselling Singapore

It is almost a crime to pursue debt consolidation without expert advice. Before you pull the trigger, you need a clear strategy and deep knowledge of all the options to make an informed decision. Otherwise, you may inadvertently dig yourself a deeper financial hole.

Credit Counselling Singapore, for instance, can assist you in speaking with lenders and breaking bad habits to prevent beginning a new cycle of indebtedness. Moreover, you may learn different best practices when it comes to debt consolidation.

Forgetting About Prepayment Penalties

Another rookie mistake is taking just the unpaid balances into account. If you have creditors that penalises prepayment, you may fail to obtain the necessary funds to settle your bills. Many lenders charge fees for extra payments to maximise the profit they could make out of the deal.

Review your existing loan contracts to find out whether you will be punished for paying your debts in advance. If there is a pre-payment penalty, include it in the equation to borrow adequate funds to cover it.

Deciding Not to Check the Moneylender Registry

When choosing a moneylender, it is best to check the Ministry of Law’s Registry of Moneylenders. This way, you can avoid dealing with an unlicensed lender. Companies in the illegal money lending business do not play by the rules and are usually guilty of abusive behaviour.

Debt consolidation has the potential to help you bounce back financially in the long run or put you in a worse situation. Do due diligence to calculate its risks and avoid mistakes that you may regret for a long time.

 

4 Ways You Can Improve Your Credit Score to Get Better Loan Deals

person holding a credit card

Singapore has two credit bureaus that issue credit scores and reports: DP Credit Bureau and Credit Bureau Singapore. Both institutions track your financial history and compile it in a report containing vital details, such as the type and number of enquiries you made to lenders, repayment track record and loan details.

If you find that the score issued to you by either credit bureaus is high, you’ll be able to enjoy a wide range of benefits. Banks and other financial institutions, for instance, will be keen on lending the money you need. You’ll also be eligible for a higher loan amount and lower interest rates. A poor credit score, on the other hand, may make securing a loan approval difficult. Even if the financial institution does approve your application, it’s likely that you may not get the interest rate or loan amount you want.

Building a good credit score, therefore, is crucial to get the appropriate funding you need. Here are a few suggestions to help you achieve your goal:

1. Pay Your Dues on Time

Payment delays can damage your credit standing. A delay beyond 30 days, for instance, will put you in the delinquent category, which will negatively affect your score over time. You can avoid this by creating due date reminders on your calendar. If you are unable to pay loan instalment on time, inform your financial institution before the due date.

2. Refrain from Borrowing from Too Many Lenders

Keeping track of several lenders can be challenging. Missing just a single payment on one lender can ruin your credit score. The sensible approach is to limit the number of lenders to make tracking easier for you.

3. Use Credit Cards Wisely

Individuals who use their credit card for shopping and other expenses have the option to pay the minimum amount due and defer the remaining payment for the succeeding months. This common strategy, however, can backfire, as they’ll likely end up accumulating a massive credit card debt and consequently paying a significant amount as interest.

Rather than use your credit card this way, look at it as an alternative mode of payment. Once you get your monthly statement, make an effort to pay off the whole amount.

4. Minimise Your Loan Application Enquiries

Making multiple application enquiries can decrease your credit score. When you reach out to several financial institutions frequently, you are creating the impression that you’re desperate for funds. Even if you intend to grab the best deal possible, the signal you’re sending out is totally different. So, limit your enquiries to help maintain your credit standing.

If you’re looking for a loan to help grow your small business, Capital Funds Investments is here to help. As a trusted business loan provider in Singapore, we offer both unsecured and secured loans to businesses. When you turn to us for your loan needs, our experts will work with you to figure out the optimal loan amount for your business. Additionally, we’ll treat you as one of our respected clients. Rest assured we won’t push you to borrow more than what you can afford.

Call us on 62817736 or send us an email at enquiry@loancfi.com.

How Personals Loans from Licensed Moneylenders Can Help You Pursue Your Hobbies

Personal Loan SG

Finding the right time to do the things you love, such as your hobbies or a personal project — also known as a “passion project” — is tricky. Whether it’s starting your small crafts business or joining that entrepreneurship seminar you have always wanted, other priorities can keep coming up and prevent you from making time for those side projects you wish to pursue.

The reason these projects are often postponed is that they are not as urgent, productive or financially rewarding as other tasks. However, these projects can be worthwhile. Learning and honing a new skill is never a bad idea. Also, it may turn into an additional source of income, especially if the project is marketable.

Changing the Mindset about Side Projects

The main hindrance to pursuing your side project is usually the cost. If you are going to spend money, spending it on something tangible like stocks and insurance sounds more practical.

One way to get past this mindset is by viewing these projects not as expenditure but as worthy investments. For example, if you are thinking of joining a week-long workshop on entrepreneurship, you are investing in skills development and marketability. The new skills will reflect on your resume and will help diversify your skill set and what you can offer to potential employers. If you are shelling out capital on your crafts home business, turning it into an extra source of income can give you a well-deserved financial boost.

Financial Foundations — Advantages of Personal Loans

Once you think of these projects as investments, you can now consider pursuing them in the framework of risks, rewards and goals. For example, if you are choosing between guitar lessons and social media marketing seminars, the latter might be more in line with your dream of starting your own business. Aligning your projects with your long-term goals can help you determine which opportunities you should prioritise.

If the cost is a big deterrent to an opportunity, one way to get around it is by considering personal loans. Licensed moneylenders have packages that fit the scope of your investment, helping ease the financial burden by spacing out the payment intervals without eating into your savings account.

At Capital Funds Investments, we have personal loans that can become the financial support you need to pursue your hobbies and the creative projects you have always wanted. Some of the benefits of our personal loans include:

  • Hassle-free approval
  • Quick transactions and processing
  • No collateral requirement
  • Flexible with different amounts
  • Minimal requirements for documents

The reason personal loans are ideal for your side projects is that they can accommodate a wide variety of situations. Whether you are enrolling in a starter business course, taking weekend workshops or bulk-buying materials for your products, personal loans are adjustable and adaptable.

Business Loan SGReliable Money Lenders in Singapore

At Capital Funds Investments, we offer convenient personal loan packages in Singapore. The personal loans are part of our available loan packages which include business loans, foreigner loans, payday loans and debt loans. We are committed to providing favourable loan packages for those in need of the extra financial boost. We have an official license under the Ministry of Law, making us clearly a reliable option for your borrowing needs. With Capital Funds Investments, you can find a loan package that matches your current project.

Pursue your hobbies and creative projects now. Call us on 62817736 or drop us an email at enquiry@loancfi.com.