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Taking Out a Car Loan: a Necessity or Luxury

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Image result for car loanCar loans, would it really be worth it to struggle? As car premiums would be high and at the time of reselling a vehicle the value of a car would have substantially depreciated. There is also the problem of having to make those huge amount of monthly payments and a high risk of payment delinquencies. The chance that there would be consecutive delinquencies you could actually lose your vehicle to auto repossession.

There are many things to think about before actually buying a car. Where to get the funds to purchase a car. Is it actually a luxury or a necessity? Buying a brand new car or a used one. These days’ car loans are very competitive in the banking industry and so, if it is deemed necessary, car loans are available in in-house, banks and other financial lenders. Some things to consider before taking out a car loan are as follows:

  1. Which would be faster a daily commute or having a car to go to the places needed? (i.e. home to work and vice versa) If the distance to be traveled would be 4km or less the chance that a short commute along with walking would actually be faster rather than driving, but any distance above 5km it can be assumed that it is faster to drive.
  2. There is also that question of gas vs. fare. Aside from comfort gas prices is something to be considered as mass transport vehicles are on the rise the farther the distance to be traveled. The more economical a commute would be rather than driving your own car, especially when driving alone. Then again a sub-question to that would be which is a personal preference economy or comfort?
  3. A car is no toy, that being said a responsible car owner has to set aside a budget for monthly maintenance check-ups. To keep the car running smoothly plays a huge part in car ownership, especially as car loans are the car owner might just end up with a very, very expensive paperweight.
  4. Would you own a vehicle for the simple purpose getting from point a to point b? Or would this vehicle would be a family vehicle that almost all its members would gain from its ownership. As children would be more comfortable in going to school, carrying groceries from the supermarket to home would be a lot more comfortable as well as going from home to work and vice versa.
  5. Having considered all those things one more questioned, should be raised, the question of distance versus traffic. If a 30-minute walk turns out to be a 45-minute drive, would it still be feasible to have a car? Unless that there is heavy load involved in carrying a walk would sound like a better idea since a single person could fit into small walkways where automobiles would not fit, ergo a short walk would be faster, more economical and not to mention healthier than going for a drive.

Image result for car loanCar loans could easily be an answer in owning a vehicle, but it would not be only the financial cost that would be important. There is also the personal cost, comfort, speed and economy that should be considered. As costly as it seems if the personal cost prevails, the financial cost affordable, as car loans could really be costly. Then an automobile would be for you.

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Loan Shark: Smooth Operator

loan shark

Idealist tend to look at loans as a means to make their dreams come true. Either it may be a small cottage by the beach side. A café in a posh part of town or a Porsche911 to get you from point A to Point B. If it were that easy to secure loans everybody would be driving Porsche’s rather than commuting in busses now would it? It would seem better to see loans from a realist’s point of view, here are some lending tips at least to get your loan approved before shopping for that Harley Davidson you have been dreaming about.

Image result for loan sharkA loan is basically a means to an end, it is a means to survive to have ample shelter, drive a decent car and buy normal clothes so as not to look like Peter Pan with leaves sewn together to cover private parts of your body, as also green lights went out of fashion went out of fashion decades ago. Loans are a means to be able to get credit as a means for commercial transactions. Here are some basic lending tips you ought to know before applying for that business loan that would make you millionaire overnight.

  1. Be concise – What are your plans for say a business loan, always have the proper documentation to back up your plans. Be ready with all the banks or lender’s requirements for faster processing. A borrower has to appear pretty sure of what he or she is going to do with the loan. Any lapse on the part of the borrower even if it is just the look of uncertainty the licensed money lenders Singapore will probably reject that application
  2. Be ready to shell out a portion of your own money – Even in mortgages or housing loans the lender will not lend any borrower the full amount that person needs. In essence a borrower must actually share capital with the lender, as the lender will not shoulder all the risk in losing money as the borrower has shown confidence in his or her choice of investment.
  3. Slow processing – As there are about a hundred different applications with better profiles than yours do not be in such a hurry because chances are the time table advertised for loan approval is actually doubled and waiting for an approval will take more time than plucking out a monkey’s leg hair using a pair of chopsticks.
  4. If you can have legal advice on hand – Always with money comes complications and a simple way to avoid these complications is to have legal advice if you can afford it. If not, look for anyone who can explain the fine print of the contract you are about to take out to avoid minor and especially major complications that usually arises with loans.
  5. Negotiate what you can afford – Rates for some loans are not fixed so there are times wherein you can get a better rate. This is basically true when dealing with broker’s whose earnings depend on commissions and have a little leeway in bringing their commission down and cut costs.

 

These are not all you need to know, these are simply but lending tips a borrower must go over for a better loan experience. And there is still much to learn before the guppy becomes a loan shark in Singapore.

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Loan Over Loan Recurring

recurring loan

Could it be said that a payday loan is a savior, as it is the easiest and fastest way to borrow money from a lender in a tight situation. Or would a payday loan be considered a curse due to the fact that a payday loan usually leaves the borrower’s paycheck less and thus a borrower would continue the cycle taking out another payday loan sg for the next payday to cover the fact that this payday that person pawned in his or her paycheck and unless a miracle happens the cycle continues on and on till the borrower is buried in interest and in debt.

What are the pros of this kind of loan? Hard to believe but there are actually some. During emergency situations this type of loans is the easiest to acquire, usually the only thing needed is the latest payslip as proof of your salary. With the only a few hours of processing one could take out a loan especially if the situation calls for immediate cash. Unexpected expenditures are a part of life, and a payday loan is a simple answer to that although a borrower should always think twice if the said expenditures are actually needed since the interest and financial repercussions are grave.

A payday loan will also bring immediate relief to the needs of the borrower it will be short lived. In fact, anyone can say that it would be a short term relief as the problems of being financially short will recur as soon as the next payday comes about.

Pawning in your paycheck so to speak can be a recurring problem plus a substantial amount of interest above the paycheck since it is very seldom that the interest will be taken off the principal cash released to the borrower and usually it would be charged on the payment date, over the paycheck, unless that the borrower has enough surplus to pay the interest and live off the said surplus till the next payday. Chances the borrower would have to take out another payday loan to survive till the next payday.

Image result for cycle of debt\As this is already a problem for the borrower, and the cycle of debt continues. Some borrowers even would compound their problems by pawning in their paycheck to multiple lenders come payday the problems are compounded because the money and interest is far above the value of the actual paycheck. And thus the next paycheck is already allotted for one loan and the next one to the next and so on and so forth. With compounded interest the borrower has to take a larger amount to cover the compounded loan. In which case would also be hard for the borrower since his or her line of credit is greatly tarnished and would have a very hard time to take out another loan from any other financial institution.

In emergency situations it will always be better to have an actual emergency fund rather than having to resort to a payday loan, worse comes to worse there is always that. But as the old saying goes “Let the buyer beware.” Or in this case the borrower.

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Why Build Credit?

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Image result for why build creditAlmost anywhere in the world, nowadays credit (rating and history) is as almost as important as your SSS number or even your driver’s license. There are a lot of ways to build credit by means of a bank issued credit or debit card, or another way is by taking out a loan and making good on the said loan. In this day and age building credit is important as most financial transactions these days are turning out to be cashless and as most of commercial transactions are based on credit.

So the question would actually be how does one build credit? Or how to get a loan to improve one’s credit status? Here are some tips on how to get a loan and build credit.

What is your personal preference?

Would you rather apply for a loan rather than having a credit card and if so, what kind of loan are you looking for? How to get a loan and what to use it for? A small loan would be a good place to start as to credit cards that are used in most commercial transactions it is easy to get lost in what you have already spent, your limit and how much you have to pay on a monthly basis. As against a small loan wherein the amount approved will be derived from the actual amount you can pay. The type of loan you will need; on what will you spend the loan on. Based on that, a borrower should check out loan packages, but always remember to read the fine print of every loan you take out.

Do not forget to ask questions.

If you are already heart set in building credit through applying for a loan, then do not be afraid to ask questions as these questions will speed up processes on how to get a loan. As the borrower would know before hand, his eligibility for a loan. The requirements needed, whatever materials or documents the financial institution or bank requires its borrowers. The time table of loan approval and the time frame the loan has to be paid every month.

Image result for why build creditChecklists, Limitations and Expectations.

Always make a checklist on everything you need in acquiring a loan as to speed up the process, knowing what you need, and having them on hand before your application will always be a big factor. As well as having all the requirements from creditors if any, employers and other financial Institutions if needed. Always assess yourself. Know your limitations, including your personal loan sg and history if you already have one. Based on your cash inflow you should know your financial limits and more importantly the repayments to the loan you can afford. If all goes well and borrowers have fully used themselves they would know exactly what to expect, as to the protocol in how long the duration of the loan approval and release will take. The specifics of the loan, the borrower’s goal on repayment of the loan and off-hand the chance of being denied the loan, there are still other options on how to build credit.

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Easy Money or Easy Scam

online scam

Image result for easy money or easy scamThere are legitimate lending institutions that actually specialize in loans that is 90percent beneficial to itself, whereas the borrower gets the raw end of the deal. A good example of this is a lending institution that deals only in car title loans, these are actually the type of lenders you should avoid, granted that lending companies are at an advantage when it comes to profit, these companies thrive on a borrower’s desperation. The lot of these lending companies are legal in nature but even in the most desperate situation these companies should be avoided.

Before entering into a contract with these financial companies it would be best to actually exhaust all options and even then think more than twice as these are the type of lenders you should avoid.

  1. Car Title Loan Lenders – These types of lenders charge an exuberant amount as they would take your automobiles papers and loan you about 25 – 50 percent the total value of your vehicle and if you should default in repaying these companies re-possess your vehicle and sell making a very tidy profit from the amount and interest that you have already paid and profit from the sale of the vehicle.
  2. Cash Advance Loans – Although banks and credit card companies carry this type of loan and are as legit as they come, they are also at times guilty of over profiteering off borrowers since cash advances usually have a 3% – 5% interest over the regular loan interest and starts once the money is withdrawn
  3. Pawn Shops – One of the type of lenders you should avoid are pawn shops as these types of institutions give low appraisals, have high rates and a minimal time frame to repay your loan and redeem the item you have pawned in (i.e. UOB gold, jewelry, watches, or anything with value). Aside from the interest there are also add on fees to these interest, most of the time in the form of storage fees, Service fees and at times fees for lost pawn tickets.

Image result for easy money or easy scamThere are also lenders that only appear to be legitimate. When in truth, these are just scam artist out to really take advantage of a borrower’s desperation. Now these are the types of lenders you should avoid totally. As these scammers would find a way to extract from the borrower what they already don’t have cash. Usually they ask for a deposit to show ”good faith” or as a “down payment” for a loan that will never materialize. A tell-tale sign of this is that the scammer is not interested in any documents not even in a borrower’s credit history, wherein there lies the evidence that the borrower can repay the loan.

Legal, Legitimate or scammers, it would be very prudent to find other means to make money other than engaging in these types of lenders as they prey off a borrower’s desperation and charge far worse than an arm and a leg. It is best that these types of lenders you should avoid being crossed off your list even in the worst of times.