With the economic hardships of the last few years, on top of the not so distant government shutdown, many people have gone from manageable debt to borderline unmanageable debt. For some, their debt has spiraled out of control. Continue reading “3 Tips to Manage Debt Consolidation”
Of all the things put off until later by university students and graduates, student loans are the worst. They can seem relatively harmless, but that’s not the case. These loans are potentially one of the most financially devastating things a student will face in life, but most students have no idea about or are very misinformed as to their financial options, mainly for the following three reasons.
- Student loans can quickly accumulate interest if not managed properly. Being proactive is critical to effective loan management.
- Many students have more than one loan, resulting in a sum total of loan payments that can be overwhelming. Understanding the risks can help mitigate untimely exposure to unsustainable repayment agreements.
- Excessive loans can negatively impact credit ratings, increasing interest rates and resulting in a higher total cost of ownership for essential items such as a car or home purchase.
To help manage financial repayment of student debt, the following three tips are recommended for new graduates, current students, or anyone struggling with student loan repayment.
First, Know Your Options
There is a wide range of loan types. Federally guaranteed loans generally allow extended, graduated, or income-based payments. Each has advantages. Extended repayment allows you to stretch out repayment up to 25 years. Graduated repayment starts out with a low monthly payment, which then increases about every two years, a good option if you expect your income to also increase. Income-based payments are based on a combination of household size, income, and loan balance, which is good if you have an unstable income. Of course, any sort of arrangement that doesnít pay off the loan quickly will result in greater interest paid over the life of your loan. While taking longer to pay off a loan may not be the best option, any option is better than defaulting on an agreed loan schedule, or missing payments, which causes long-term financial damage that could otherwise have been avoided.
Second, Consider a Student Loan Consolidation
If you havenít gone into default on your student loans, then you can ask your lender for a forbearance, or deferment. In simple terms, this means you will be exempted from a set number of payments, although interest will still accrue during this period. There are a number of qualifying conditions, such as medical or personal problems, or other reasons you can document to justify an impact your ability to make payments as agreed. Sometimes you can even qualify if youíre already in default, but in every case, it’s best to find out about your options before you need them. Knowing you have the ability to move a few loan payments to the end of your loan can make a big difference when planning for unexpected financial emergencies, or an inability to make payments as agreed.
Third, Consolidate Loans When Possible; and Get Help If You Need It
Some graduates have numerous loans from various lenders. This can pose a problem when the sum total of payments is unmanageable. In such cases, there are student loan consolidation programs available, some of which will even consider student loans that do not qualify for consolidation programs. In every case, it is best to speak with a person, explain your situation, and see what finance options are available to meet your specific need. The obvious advantages of loan consolidations are lower payments, but a loan consolidation can also provide a reduced or fixed interest rate, and in some cases even offer discounts for scheduling automatic payments. Information on this can be found online at the Federal Student Aid website for Direct Consolidation Loans, or by phone at 1-800-557-7392.
While some might argue that considering any of these options is preparing for defeat, they aren’t accounting for the fact that life doesn’t always go as planned. From an adult perspective, making sure youíre prepared for financial difficulty is no different than knowing where the emergency exits are in a building. Being prepared in advance takes less effort than trying to fix problems in a crisis, and can mean the difference between managing a problem or being overcome by it. Make sure you know your repayment options before you or a friend needs to use them.
Moneylenders have been a hot topic in over the last decade, with a growing number of fraudulent businesses illegally operating under the protection afforded by cross-border operations. This has given the moneylending industry a negative reputation it doesn’t entirely deserve. By way of example, more than 5% of the population in Singapore has used payday loans to borrow money. Regulated companies that operate according to established guidelines are far from the stereotype bad journalism would lead you to believe. Continue reading “The Truth About Moneylenders and Sensationalist Journalism”
We’ve been working over the past couple of months to update the directory with many useful new features for borrowers. Below you can find a brief explanation of all the new features we’ve added.
Continue reading “Get to know the new Moneylender’s Directory of Singapore”
Resource Credit was recently found guilty by Justice Tan Siong Thye of contravening the government’s Moneylender Rules and Regulations. Resource Credit attempted to charge $196,000 in administrative fees on a $128,000 principal loan amount, a clear violation of the rules which state that “moneylenders cannot recover from borrowers any interest or fees exceeding the principal amount.” Furthermore, Justice Tan Siong Thye found that Resource Credit that Resource Credit violated the Moneylenders Act by charging interest under the guise of administrative fees for loan refinancing that exceeded the limits allowed by law. Justice Tan Sion Thye stated: “The loan transactions as a whole are unconscionable and substantially unfair to the plaintiff.” Continue reading “Resource Credit found guilty of contravening Moneylender Rules”
On January 1, 2016, the Registry of Moneylenders (ROM) released a new list of legally licensed moneylenders in Singapore. Currently there are 169 active licenses and 1 suspended license.
UPDATE: The most current list of legally licensed moneylenders is now available here.
When creditors talk about individuals with “bad credit”, they mean borrowers who have a high credit risk. Or, in other words, a low credit score is a sign of a bad credit (just in case you don’t know, a credit score is a number used by lenders to quantify how risky a borrower is). Usually these people have a low credit score because they either owe a significant amount of money or they did not make timely payments in the past. As a result, it becomes more difficult for such borrowers to apply for the best loans available since their options are limited because their bad credit history affects the perception of lenders about their ability to repay a loan. Continue reading “What does it mean to have “bad credit”?”