Debt consolidation is all about rolling several debts into a single loan. It is a form of debt refinancing designed to help you clear high-interest debts so that you are left with a single loan that is easy to pay. Whether you got the high-interest loans when your credit score was poor or poor spending habits, the good news is that you can get a debt consolidation loan Singapore and use it to start the journey to financial freedom. Here is an expert guide to debt consolidation.
Signs that You Need Debt Consolidation in Singapore
Consolidating your debts is no doubt a good thing, especially when you end up with a single and low-interest loan. Experts recommend it for people looking forward to rapidly get out of debt. Here are some signs that indicate debt consolidation might be a good option for you:
- When your debt load starts getting high: If your debts are taking more than 40% of your monthly income, excluding the mortgage, it will be a good idea to consider debt consolidation.
- If your revenue is sufficient to keep up with debts: If you take a closer look at your life and realize that there are so many debts but can comfortably pay them, it will be a good thing to go for debt consolidation.
- Your credit score is good: If you have a good credit score that can help you to qualify for a low-interest debt consolidation loan, debt consolidation might be an excellent consideration. A low-interest loan means the payment burden will be lighter, and you can get out of debt faster than repaying individual debts.
- Following the repayment schedule for the current multiple loans is challenging: If you have so many debts that following with payment is proving challenging, late payments are likely to attract penalties and damage your credit score. This is why you should go for debt consolidation.
What to Do After Deciding to Take Debt Consolidation Loan
When you decide to take a debt consolidation plan Singapore, it is essential to appreciate that it is just another type of credit. Therefore, you need to give it the same focus as other loans, such as personal loans. In particular, here is what you need to do:
- Be informed about the Loan: Like other loans, it is prudent to dig deeper into debt consolidation to understand how different components, such as interest, principal, term limit, and early repayment fees, work.
- Your credit score: To approve your loan, most lenders look at your credit score because consolidated loans are unsecured. Therefore, it will be a great idea to get a copy of your credit report from Credit Bureau Singapore and correct any errors.
- Review your spending habit: Once you consolidate the debts, the fact is that none of them has gone away. Indeed, you will be left with a bigger burden because the debt consolidation loan will also be added. This is why you should rework your budget to include payments of the debt consolidation loan.
Apply for Debt Consolidation Loan through Lendela
As you can see, debt consolidation in Singapore comes with many benefits, and you should take advantage of them, but the first step is applying for it. The best way to apply for a loan is through Lendela, a lender comparison site built to make loan applications easy and fast. Instead of making applications to multiple lenders, Lendela requires you to make just one and forward it to different lenders. Here is how it works:
- Visit Lendela to make an application (this should take you only a few minutes).
- Get offers from different lenders.
- Select the preferred debt consolidation loan.
- Sign the debt consolidation plan and say goodbye to multiple debts.
If you have multiple debts that are proving challenging, it is time to consider a debt consolidation plan in Singapore. If you fail to qualify, it is also possible to consolidate them using a personal loan. Remember that working with Lendela helps to make the application easy, fast, and convenient.