It is not surprising anymore to know of a friend or a family member who decides to approach a licensed moneylender or bank to take out a personal loan. In fact, this has been quite a common practice in Singapore, and there are times when it may even be a practical solution to a tough financial crisis. If you want to avoid the risk of getting into jail because of massive debts, or you simply want to rise back from having serious debts in your credit card, then getting a personal loan may be an effective move to consider.
Here are among the 5 top reasons why some Singaporeans decide to take a personal loan. Perhaps you may even relate with these reasons, particularly if asking a friend or family member for money is the last thing you want to do at this point.
1. Continue with your gambling habit
There are numerous things that appeal to people’s gambling habit whether it is the casinos, horse racing, or soccer betting. In Singapore, you can certainly take your pick if you are indeed fond of gambling. Just head to the casino or the horse racing track, and you can try your luck in taking home the grand prize. But then again, this is why it is called gambling – there is no assurance that you can win every game. You may even find yourself losing more money than what you win because Lady Luck seems to be shying away from you all the time. So, at the end of the day, your high hopes of winning only cause you to get depressed and perhaps even buried in a ton of debt. Still, the fact remains that you do not have enough to pay these off, and there is still the strong desire to gamble.
This is why some people decide to take out a personal loan to keep up with their gambling habits. Sure, this is not the smartest way to spend your loaned money, yet it is better than going for cash advances because of the massive fees. In fact, even before the time you go back to the casino, you have already lost money because of the cash advance fee that goes up to 6 percent.
Yes, it is much better to slowly overcome your gambling habits. But if your reason for taking a personal loan is to have some spending money at the casino instead of going for cash advances, then it is a more practical route for sure. Just be sure to pay off your loan on time… And perhaps eventually address the issue on gambling as much as possible.
2. Purchase costly second-hand items
You have a credit card handy for your purchases whenever you feel the need to buy something brand new. Whether it is a piece of furniture or household appliance, you can easily afford these items with just a swipe of your credit card.
But then, what if you are looking to purchase a second have item such as a luxury watch or a used car? No credit card can be used for buying these items since you need cash as payment for these. In this case, you can consider taking out a loan if the need for these items is urgent and your credit card is rendered useless if you want to buy these.
However, you have to remember that it may be worth taking out a loan for these purchases, yet you have to consider the payments to be made every month. Thus, make it a point to look for a lending institution that offers a cheaper interest rate with flexible payment terms, which are all suitable to your situation. This should prevent you from encountering tougher financial crises while slowly getting out of debt in the future.
3. Spend a relaxing and well-deserved vacation
You have been working hard, and it is certainly fair enough that you treat yourself to a nice break. If your heart is set on visiting popular holiday destinations in Europe, Australia, or even in the United States, then you can expect to pay quite a certain amount of money to cover for your expenses. The total bill may go over $1,000 for a one-week vacation to these beautiful places in the world. But are you prepared enough to pay for such as high amount of money? If you have your heart and mind set on taking a break, yet there is no dispensable cash to cover for the expenses, then a personal loan may be your best bet. This is actually the reason why some people decide to take out a loan even if they have cash and allot thousands of dollars for their trip.
Think of it this way – supposing you have $2,000 in the bank, and your trip will probably cost you this same amount of money. Will you opt to spend this much money upfront, or do you think it is more practical to take out a personal loan and make monthly payments instead? It is more practical to go for a loan since you never can tell what might happen if you decide to spend a huge amount of money initially. Unexpected things may come your way such as losing your job or undergoing a medical emergency, which can impact your cash inflow. So, if you want to treat yourself to a vacation without going broke, then a personal loan may be worth a shot.
4. Renew your COE
There is an increase in the prices of COE over the past years, and this is quite a sad turn of events because of the higher cost of it compared to the actual value of your car. Plus, it is impossible for you to take out a car loan if your purpose is for renewing a COE. If this is the case, what can you do to address this concern?
A personal loan can be a practical solution for this situation, which can also save you some money along the way. You will be able to settle your COE in terms or installment basis, while having the assurance that you will control your loan’s tenure according to what suits your needs. For instance, you want to renew the COE for 5 more years, then the loan offered by your bank for a personal loan may suffice for covering the payment for it. You can ever consider spreading the loan for a period of 5 years, and this will now end up as your auto loan for the existing COE that you have.
But of course, it may not be viable to go down this route if you have sufficient cash for paying a COE. It only applies to those who have insufficient cash available at the moment.