Do’s and Don’ts of Debt Consolidation Plans
Here are some crucial dos and don’ts that you need to be aware of when going for a debt consolidation plan.
Do Compare and Identify the Consolidated Plan with Lowest Interest Rates
To ensure that you are getting the best debt consolidation plan in Singapore, it is crucial to compare the interest rates and pick the plan with the lowest one. When checking the loan’s interest rate, you should also understand that it is dependent on the loan tenure. A loan with a longer tenure will cost you more compared to another with a shorter tenure.
Debt consolidation plans in Singapore are offered by providers who might have additional features to help clients save money, such as promotional rates and complimentary insurance. Although these extras should not be the primary factors when selecting a debt consolidation plan, they can make it easier for you to decide between two potential debt consolidation plans.
Do Change Your Spending Habits
A debt consolidation plan is designed to simplify how you pay off multiple loans, helping to take out juggling multiple bills and beating the due dates. However, to maintain a debt-free status, it is crucial to change your behaviour. Find ways of cutting down spending and supplementing your income. For example, if you go on holiday three times every year, slashing them to one or two can help to free some money for debt repayment. You might also consider taking a part-time job to raise additional money to boost your savings.
Don’t Miss a Payment when Repaying Your Debt Repayment Plan
When you go for debt consolidation plans in SG, it is important to take your monthly instalments seriously. Missed payments will not only attract penalties but can also start pulling down the credit score that you had started improving. To avoid being late or forgetting to repay the monthly instalments for your debt consolidation loan, you can consider automating the payments and reviewing personal spending to shed off unnecessary expenditures.
Don’t Fall for Big Promises
When debts get too much for some people, they tend to hastily pick any plan tagged with big promises. However, you need to be careful with such “too-good-to-be-true” promises. For example, a debt repayment company that promises that you will become debt-free in only a few months after selecting a debt consolidation plan may be lying to you.
Don’t Go for a Debt Consolidation Plan without Understanding How You Got There
While it is true that using debt consolidation plans in Singapore is a great way to get out of debt, failing to understand how you got there increases the risk of you creeping back into old habits and getting into financial trouble once more.
By following these do’s and don’ts of debt consolidation in Singapore, you can be well on your way to clearing your debts faster and also creating a better financial future.
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