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SG MONEYLENDER LATEST NEWS SINGAPORE How to reduce the cost of your personal loans

July 16, 2016

SG MONEYLENDER LATEST NEWS SINGAPORE How to reduce the cost of your personal loans

You might be surprised by how much you could save on the cost of your loan by moving it or repaying early – even if there are extra charges for doing so. We take a look at your potential options below for unsecured loans and provide tools to help you compare costs.

Repay loans with savings

It almost always makes sense to repay any outstanding loans using your savings, considering any early repayment charges. And if you have savings to use, always pay off your most expensive loan debts first.

Should you save or pay off loans and credit cards?

Read on to find out about different options for reducing the overall cost of your loans even if you can’t yet repay them in full. This page looks at reducing the cost of unsecured loans – meaning those not secured against your home.

Switching to another loan

If you don’t have savings, you might be able to pay off your loan in full and more cheaply with another loan – for example where you can get a lower rate, a shorter deal, or both.

If you have a complaint about an early repayment charge

If for any reason you aren’t satisfied with how Singapore moneylenders have dealt with your early repayment – for example if you think you’re being overcharged or treated unfairly, you should complain. You’ll need to complain to your moneylender first and then, if you’re still not satisfied, you can take your complaint to the Insolvency & Public Trustees Office (IPTO) if necessary. Read more in our guide below.

Find out how to sort out a money problem or make a complaint.

Should you consolidate your debts?

Some loans are specifically advertised as debt consolidation loans – these allow you to merge your loans into one. Consolidation loans are now much harder to obtain and should only be considered once you have explored all your other options as they are usually secured against your home. And while they can seem an attractive option because of lower interest rates and repayments, they can often cost you a lot more in the longer term than sticking with your current loans and you risk losing your home if you cannot keep up the repayments.

It’s also all too easy to consolidate your debts and then go and build up more debt elsewhere. You have to know how you’re going to repay before you consolidate – and then stick to your repayment plan. If you need help with your debts, contact a free debt advice agency.

Credit card ‘super balance’ transfers

If you’re disciplined at repaying and have a good credit score, there are occasionally interest-free or low-interest balance transfer credit card deals which transfer money directly into your bank account.

This can then be used to repay overdrafts and loans. However these deals – sometimes known as ‘super balance transfers’ – come with a fee, so you’ll need to work out whether doing this would be cost effective for you to do this. Make sure you ask your personal loan provider how much it’ll cost to pay off the debt in full and that you’ll be able to pay off the debt before the zero or low interest rate runs out.

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