Great Tips to Save Money on Loans
You may need to take loan in Singapore and you will also get licensed, unlicensed, legal, illegal, rude, polite, slow or express moneylenders in Singapore. But in today’s economic uncertainties, it’s important to find ways to save money on loans too. Here are some.
Check Types of Loans and their Features
Before you take any loan, you need to do some research and find out all the available types and their features. Keep an eye on bank updates, because they keep introducing new types of loans often and who knows, some of them may perfectly suit your particular financial condition. If you choose the correct type of loan, you can save on interest.
E.g. if you have hoarded a significant amount of money in your savings account, make the money work harder by choosing an interest off-set housing loan. Such type of loan lets you have an account that offers the same rate of interest on your saving as you are charged on your loan. So you can divert that interest to pay the interest on your loan. Not all the interest-offset loans pay the same interest as that of your loan, but still the rate is higher than that of a regular savings account.
Rest refers to the rate of recurrence of outstanding or compounding loan calculation. It is also often called interest conversion in the terminology of finance.
Loans may be available in daily-, monthly-, quarterly- or yearly-rest and can be considered to be XX-reducing. Most of the Singapore’s loans are monthly-reducing. Those that are not monthly-rest still need monthly payments. All others being equal, those that have shorter rest will have lesser interest.
Repaying more than your regular installments is actually a good way to lessen the total interest on your debt. That reduces your outstanding payment every time you repay. That reduces the chargeable interest too, provided your debt is calculated frequently enough.
But if you repay during the lock-in period (usually 2 to 5 years) you may have to pay a penalty for partial or full payment of loan. This penalty is not more than 1.5% of the amount of repayment. Also, all loans have no lock-in periods, but if yours have, check if the savings of interest from prepayment is more than penalty.
IP Credit is a popular and trusted moneylender in Singapore offering loans of a variety of sizes throughout the country. They are IPTO-approved and are committed to help needy borrowers with their financial problems, no matter whether they are Singaporeans or foreigners.