When is it Smart to Take out a Personal Loan in Singapore?
Written byHailey Ang
Updated on: December 21, 2022
Please note that the content of this article is based solely on the opinions of the author. It has not been reviewed, commissioned, or otherwise endorsed by any of our network partners.
Taking out a personal loan can be an important part of managing your finances and meeting your financial goals. But when exactly is it smart to take out a personal loan in Singapore?
Here’s how you can decide if taking a personal loan is right for you:
1. For Debt Consolidation: Taking out a personal loan can be a great way to consolidate high-interest debt, such as credit cards, into one manageable payment with one fixed interest rate. This can help you save money on interest and also make it easier to keep track of your monthly payments.
2. To Cover Unexpected Expenses: Life can throw unexpected expenses our way from time to time – from major car repairs to medical bills. Taking out a loan can help cover these costs without having to dip into savings or put the purchase on a high-interest credit card.
3. When You Need Access To Credit: Borrowing responsibly can help you build up your credit score, making it easier for you to qualify for future financing and also get better interest rates when borrowing in the future.
4. For Large Purchases: A personal loan can also be helpful for making large purchases such as buying furniture or financing renovations, while still managing your cashflow in the short term by spreading out the cost over time with smaller monthly payments.
Taking out a personal loan is not always the right decision – but when done responsibly, it can be an incredibly useful tool in achieving all kinds of financial objectives.
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