Finance

Going for an external lending facility



All of us have financial emergencies. None of us have “enough” money at any given time. World’s first recorded “banks” were fashioned by Knights of Templar where they accepted “deposits” and gave an interest of what they kept. With time various financial ways and means have developed and today there are many mortgages, financial facilities, institutions and much more when it comes to borrowing for an emergency or for a personal project of yours.

Things to remember- must you borrow?

First, look in to why you need the money? Do you have an emergency fund? Can you use that fund for this respective need? Sometimes, you can manage with what you have already or by asking for your friends or partners to pitch in to the project rather than borrowing, but you decide to go for a borrowing.

So unless it is obligatory that you sign up for that loan, do not opt for that. It all seems simple and harmless enough when you take the money however when you repay it, you’d have paid several times over and it is indeed a waste of money if you didn’t need it. In addition, there maybe other ways than just borrowing sg cash loans; you can perhaps go for a mortgage or a pledge where the interest rates are relatively low.

Things to remember- how much to borrow?

This is quite important to decide very early on. How much to go for depends on a lot of facts; why do you need the money? Is there any other way to get some cash if you’d need more? Is it a purpose that many emergencies will suddenly pop up? For example, if you are taking this loan for a house repair, do not go for the loan until you thoroughly look over the house, discuss with a masonry person or a contractor and decide with hundred percent accuracy what steps you are going to take. Because you think to do tasks one and two and in the middle of it, tasks three and four will also appear as needing repairs and you are stuck with money only for two tasks instead of four. 

Things to remember- everything regarding it!

It is not a special thing to say that you need to extra careful about the principle amount allowed, interest rates, repayment periods, loan processing fees if any, payments for any missed monthly payments, prepayment options and penalties if any, late payments fee and much more. Especially, people are of the understanding that loan processing fees apply only for mortgages however there are many instances it even appearing in personal loans. Take care to send your monthly payment on time or the bank will charge a ”failed payment” fee. Similar with late payments. If you get some money, prepayment can save a lot of interest you pay out, hence get to know about penalties regarding that also.

A borrowing must be done with the understanding that it has the time value of money as the basis. Once you understand the process you will opt to not to borrow as much as possible.



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