important tips when taking a

Everyone loves freedom from debt. Yet, an emergency such as a broken car that requires fixing

or funeral may come up and force you to consider taking a personal loan. Though desperate

times call for desperate measures, taking a personal loan Singapore lenders offer requires a high

level of calm, sobriety and prudence, however dire your financial situation might be. Below are

some of the most important considerations in ensuring that taking a personal loan doesn't plunge

you into financial insecurity or turmoil.

Understand the Financial Implications of a Personal Loan

You do well to understand that you'll be in debt once you get a personal loan. Thus, assess your

current income as well as ability to pay off and still take care of your daily needs. Most

importantly, understand the penalties that go with late payment and if not impressed, go for a

safer option.

Take a Personal Loan for the Right Reason

It's financially prudent to take a personal loan when you need it and not just because you want it.

Take a personal loan in absolute emergencies and make sure you've figured out how you'll pay it

off beforehand. Also, don't borrow if doing that won't improve your financial situation.

Don't Borrow before a Major Loan

If you plan to take a major loan in the next two to three months, a personal loan Singapore

residents consider should be off the table. This is because repaying too many loans at the same

time affects your Debt Servicing Ratio (DSR), and in effect your overall ability to pay off debts.

You don't want to fail to qualify for a car loan or mortgage because your lender doesn't find your

DSR inspiring enough.

Compare Several Loan Offers

Go for the most reasonable interest rates in the market. This entails shopping around and

comparing several offers, where those lenient on repayment terms and low on interest rates merit

first consideration. Equally important, don't fall for low interest rates only to commit your earnings

to a prolonged period of monthly deductions in paying off your loan.

Take the Appropriate Loan for your Financial Situation

Being specific about what you plan to do with the loan will make it possible for your lender to offer

an appropriate package at reasonable rates. Don't take a personal loan to take care of college

fees when you might just as well go for an education package. It follows that a specific loans such

as education loans go with lower interest rates than generalised personal loans.

Taking a loan Singapore lenders offer may seem the easy way out of a financial emergency. Yet,

there is no such a thing as easy money, especially if it's coming from the bank. If you have it but

not earned it yet, someday you'll work for it and this need not be a lesson to learn the hardest way

for any borrower in Singapore. Just do your homework well and understand the financial

implications of taking a personal loan beforehand.