It can get pretty confusing and troublesome if one has many credit card bills to pay every month. It is easy to miss out any payment and credit cards are known to charge very high interest rates.
A credit card consolidation loan helps to consolidate loans into one single payment per month, making it easier for borrowers to repay. When they sign up for a credit card consolidation loan, they will also be offered lower interest rates and a more comfortable repayment period. This bill consolidation helps them to clear their debt and maintain or even improve their credit score.
Struggling with credit card bills? Save yourself the trouble by getting a credit card consolidation plan. Simply because they are much more convenient, with lower interest rates.
Credit card interest rates are high, like extremely high. Why not pay off your debt in an easier way?
If you are already in a huge credit card debt, getting a credit card consolidation loan might be a good option for you. Credit cards are notorious for having very high interest rates. The average interest rate for credit cards in Singapore ranges from 22% to 29% per annum and has only been increasing further in recent years. Although some cards offer lower initial rates around 17% per annum, or waiver of first-year annual fee, the eventual costs and rates charged will still be very high.
Many Singaporeans fall into the trap of credit card debt and this affects their finances greatly. Due to large purchases, splurges or impulsiveness, they spend months and even years trying to pay off their credit card debt. Most of them end of financially and emotionally drained due to the high stress levels of never-ending debts. This also sets them back on their financial goals and affects their lifestyle.
Lending Bee offers one of the best credit card consolidation programs in Singapore. How credit card consolidation plans work is that Lending Bee will help our client pay off their credit card debt first so as to stop incurring high interest rates. We offer unsecured loans to repay credit card debts. Thereafter, the client only has to make one monthly payment at a lower rate to Lending Bee. This solution helps to lower interest incurred and makes repayment much more convenient and comfortable for our clients.
All of us will have financial emergencies throughout our lives. In times of need, we may seek the help of family and friends. However, that carries the risk of hurting relationships. In situations like these, what we all truly need is a reliable and capable financial partner.
Lending Bee is one of the best licensed loan providers in Singapore. The company has many years of experience and has helped more than 42,000 individuals get out of tricky financial situations and make progress in their lives. Aside from low interest rates and flexible loan tenures, Lending Bee prides ourselves for being active listeners and advisors to our customers. We understand our customers’ situations and recommend the best solution to help them. Getting cash and financial help from us is not as difficult as compared to banks.
We also understand that it can be daunting to take a loan. Rest assured that our experienced and professional consultants will guide you through the entire loan process, step-by-step to help you improve your financial situation. Lending Bee aims to make your life better not just financially, but in every aspect as well.
Get out of your credit card debt, starting today.
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Credit score is a number used by moneylenders to evaluate how likely an individual will repay his debts and the probability of defaulting the loans. It calculates the amount of risks moneylenders face when they lend individuals a loan.
According to the Credit Bureau of Singapore (CBS), the credit score is a four-digit number developed from an individual’s previous payments and loan history. The score ranges from 1000 to 2000. Those with a lower score of 1000 means that they may have a higher chance of defaulting on a loan. Those with a higher score of 2000 means that they will have a lower chance of defaulting on a loan. Along with each score, a risk grade and percentage description will be given. The higher the credit score, the easier it is to get a loan.
Usually when an individual applies for a loan, the financial institution will not only look at their credit score, but also at their salary, employment term, bankruptcy information.
If you have never taken a loan before, you will not have a credit score because there will not be any credit history.
Having no credit history is not necessarily a bad thing but if you are trying to get a large loan (for example, a business loan, a renovation loan or a home loan), it might be more difficult to obtain a loan approval. With no credit score, it is harder for banks or moneylenders to evaluate your repayment ability and default probability.
To increase your chances of getting a large loan, you can opt to take a small line of credit via a simple credit card first. Then, make timely payments in order to obtain a good credit score.
A total of 6 factors affect an individual’s credit score in Singapore:
1. Enquiry Activity – This activity refers to the number of loan application enquiry found in your credit history. Each time you apply for a loan, the bank or financial institution will request for your credit report and an enquiry will be placed on your file. Having too many enquiries on your credit profile will show that you are trying to take on more loans and debts, increasing your risk of defaulting. Hence, always try to keep loan enquiries to a minimum and do thorough research before applying.
2. Credit Score Records – An individual with a longer credit history is deemed a more reliable borrower as compared to someone with no or short credit history. Borrowers who have a history of prompt payments will also attain a higher credit score.
3. Credit Account Delinquency Data – Late repayments or defaults will negatively affect an individual’s credit score. More late payments will lead to a lower credit score. If one is more than 30 days late on the minimum repayment, they will be considered delinquent, negatively affecting their credit score.
4. Recent Credit/ Loan Applications – Banks and moneylenders may infer that you are straining your finances if you have applied for too many new credit facilities in a short period of time. It is better to apply for new credit cards and loans within reasonable limits.
5. Use Of Credit – The amount of credit that is used by the individuals will also affect the credit score as well.
6. Loan Defaults – When the borrower is truly unable to pay off their debt, they will have to default their loans. Banks and licensed moneylenders will have to write off their debt. Personal loans, credit card loans and other unsecured loans that do not have collateral will be written off as well and the finance institutions will have to treat it as a loss.
However, this is not a good thing because a single default will ruin your credit score for many years. It may be almost impossible for you to secure another loan because of the high risks of loaning money to you. This will become more troublesome should financial emergencies or major purchases occur in the future. They will be unable to get a loan to finance their purchase.
The credit score of an individual highly affects their loan approval rate and term plans. The higher the credit score, the easier it is to get a loan. The lower the credit score, the harder it is to get a loan. If you are planning to take on a loan in the near future, it will be good to build good credit in order to obtain better loan rates. If you already have bad credit and a bad credit score, do not fret because there are ways to improve the score as well. It may take some time but it will be helpful in the long run.
Here are 6 tips to getting a good credit score:
1. Borrowing just what one can afford
In Singapore, there are a myriad of licensed moneylenders who are willing to offer unsecured loans, provided that they meet their eligibility requirements. Banks and credit card companies are also clamoring to get the attention of anyone willing to listen to their sales pitch. The temptation for Singaporeans and foreigners to take on lots of credit is all around, but one must have the discipline to only take what they can afford. Credit cards are particularly tempting because they offer revolving credit. Moreover, consumers are often enticed with free gifts such as expensive watches, vouchers or membership waivers to sign up for credit cards.
When a card holder only swipes an amount that is affordable based on his or her monthly income, the person is termed a responsible borrower. By borrowing only what one is able to comfortably repay and avoid being excessively in debt, one is able to build a good credit score. Even when they qualify for a higher loan amount, he or she should be disciplined enough not to take more than they need.
2. Don’t hit the credit limit
This is especially important in Singapore where lenders have to follow government guidelines when lending money. According to the Total Debt Servicing Ratio (TDSR), lenders can only lend money to someone who has not already allocated 60% of their monthly income to debt repayment. All individuals are not allowed to spend more than 60% of their monthly income on debt repayment. The 60% ceiling includes the following debts – mortgage, car loan, study loans, personal loans, home loans, business loans, credit cards and more. When one is close to this limit or has reached it, he or she cannot borrow any more money even in an emergency. Additionally, it shows a level of irresponsibility and an inability to properly manage their own finances. Hence, it is important for one to reduce their debt as much as possible in order to build and maintain good credit.
3. Have only one credit card
There is nothing wrong with having multiple credit cards, but it is better to have just one to avoid overspending. Having a credit card collection is a big temptation and one can actually end up using all of them, thus accruing too much debt quickly. Additionally, with several different cards at high interest rates, there will be more payments which can be difficult to repay. It is important that one first learns how to be responsible where credit is concerned before acquiring more than one card.
4. Pay off the credit card balance fully every month
This is an obvious but great trick to managing credit cards and credit card debts. Most people actually do not pay off their credit card debts completely and the debt tends to snowball along with the high interest rates. Paying on time and in full not only saves one money, but also shows that the person is able to make their payments on time without being chased by creditors. They have the ability and discipline to manage their own finances. This action causes ones’ credit score to soar which is good for any future borrowing for houses, cars, business loans and more.
5. Timely payments
It is important that one demonstrates good financial health by paying off their bills punctually. Even though the credit report does not include a list of all the bills that one pays, if one is delinquent and a collector is given the job of ensuring that the person pays up, it could reflect in the credit report, thus reducing one’s credit score. If the delinquency is in the form of debt collection, it can really hurt that score. Managing your personal finance and credit card spending therefore also involves ensuring that one does not become delinquent in making bill payments.
6. Allow accounts to age
This simply means that one should consider keeping the same credit lines open for a long period of time. They will reflect on the credit report and show credit age, thus proving that the borrower has been a good debtor for many years.
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