Should You Consolidate Your Debts? Signs that Show It Might Be Time

Should You Consolidate Your Debts? Signs that Show It Might Be Time

Debts can grow rapidly, and before you can realize, you have a long list of loans to repay every month. Now, things get worse when dealing with high-interest debts, such as credit card loans, and have a long list of to-do things every month. If the lenders you borrowed from refer you to debt recovery agencies, dealing with multiple calls and harassing emails demanding payment can become a psychological issue. Well, do not let the problem get to this point, but what options are there?

The perfect solution to knocking down your debts and regaining control over your finances is using debt consolidation loans in Singapore. It is a tested and proven strategy, but at what point do you pull the plug? Keep reading as we reveal the main signs that indicate it is time to go for debt consolidation.

You Keep Forgetting Pay Your Bills

If you have multiple debts to pay every month, but find it hard to remember all of them, it means that trouble could be steps away. This is very common because of the multiple activities that people have every month. Imagine having to juggle the busy schedule at your workplace, which requires you to wake up early and get back late, plus other personal activities. If additional tasks, such as paying debts are added, it is possible to forget.

Remember that forgetting payments comes at a heavy price, including hefty penalties. Well, you can escape these unnecessary payments by taking a debt consolidation plan in Singapore.

Your Debts Come with High-Interest Rates

If your debts have very high-interest rates, it implies that you are paying more than necessary, and it might be time to take a debt consolidation loan in Singapore. Most loans can have high-interest depending on the terms and conditions of the loan agreement.

However, the most notable are credit card loans that can have interest as high as 25%. Now, compare that with standard loans that can come with interest of as low as 7%. If you get such a loan, it implies that you can cut down the interest by three times.

To be sure of getting the best deal, make sure to combine all the interest rates of the current debts, and compare with what is being offered through debt consolidation. If you have an opportunity to pull the interest down, which is the case in most debt consolidation plans, go for it.

When Targeting to Improve Your Credit Score Fast

Is your credit score poor and you have been trying to improve it with little success? The long list of debts might be the obstacle, and it might be a good time to clear them by taking a debt consolidation loan in Singapore.  Here is how it works.

When calculating your credit score, the outstanding debt is one of the most important factors. If the debts are many and amount high, the score will be pretty low, and that should be an important point for improvement. Because the debt consolidation loan clears all outstanding unsecured loans, the Credit Bureau Singapore will note the progress and raise your score. However, real improvement will come over time as you continue servicing the new loan.

As you can see, having a long list of debts should not worry you anymore because there is a viable solution through debt consolidation loans in Singapore. Remember that a lot of lenders might opt to decline your application for a debt consolidation loan because they consider you a high-risk party. However, you can simplify the debt consolidation loan application process and improve chances of approval by working with Lendela, one of the best loan comparison sites.