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What Should You Do When You Can’t Pay Your Monthly Dues?


With society becoming more and more reliant on plastic cards and numerous loans, it is not surprising that many people today have fallen heavily into credit card debts and loans that they can barely service.  

So what should you do in case you suddenly find yourself unable to pay off your monthly loan dues and credit card bills? The answer is simpler than you think — face your debt head on and slowly work your way to eliminate them.

Facing the problem

Many people temporarily escape their credit card and loan obligations until they are financially more stable to pay the monthly dues, but even if you have no secured loans to worry about, hiding from your creditors isn’t the best plan. List down all your loans, insurance payments, bills, every single debt you have, and start calling your creditors to inform them of your financial status.

Some think that banks and lenders would not give them a chance to re-evaluate their loan and credit policies. On the contrary, your bank, for instance, would definitely be open to re-negotiate your loan plan if you inform them. Defaults are hard on the borrower, but they’re doubly hard on banks and lenders. Lending money is part of their business and when you forfeit or default on your loan payment, they lose money.

Contact everyone you owe money to, this includes your best friend who lent you 100 dollars or even your parents who helped you with your home loan.

If you were able to renegotiate loan plans and credit obligations, remember to put it in writing. Everything has to be legal. Otherwise, your lender can insist on your previous obligation and you will have no proof of your new settlement in case either party resort to take legal action.

Remove all lines of credit

You cannot solve a problem with another problem. So until you are financial more stable, get rid of your credit cards and charge cards, everything that gives you access to a line of credit. When you pay a loan using credit, you are not solving your debt problem, you are only putting it off. Pay off existing credit card debt and cancel your line of credit. This may alter your lifestyle immensely, but it is a necessary change.

Likewise, do not take out a new loan during this period — even if you plan to use the money to pay the other loans. Assess your finances thoroughly before considering debt consolidation. Consolidating your debts may take you out of the rut now, but it is not enough. At best, it will push your financial obligations some couple of years before it bothers you again. Consolidation also opens up your line of credit, since your current debt is paid off.  This gives you the option to take out new loans, which will only worsen your situation.

Budget and prioritize

When paying off your debts, budget your funds and prioritize certain loans and debts over others.

Apportion your money to see how much you can use for paying off loans and debts. Once you’ve allotted a specific amount for this, assess your debts to determine which should be paid off immediately. This is why you should call your bank, lenders, and creditors first, to see which loans and credit lines can be renegotiated and even pushed back a couple of months. Can your home loan terms be changed? Do you think your creditor will give you better terms for your car loan?

Housing and transportation are considered as the main priority when paying off debt. You wouldn’t want to lose your home and your car.

Prioritizing your debts also means giving up luxuries, especially if you’re struggling to keep up with your expenses. Food and shelter comes first. Do you have a car loan and a home loan? While these may be priorities, consider exactly how important it is for you and your family. Are you currently paying off loans for a recreational vehicle or a vacation home? Consider selling them. Not only will continuous payment of such loans replete your funds, it will also deprive you of a possible money source to service more important debts.

Selling such properties may seem impractical, considering how much money you spent on it. But if you can’t even pay your bills, you are not in a position to keep superfluous items.

Individuals have different takes on prioritizing debt and loan payments.  Some pay off the essential loans first while others eliminate the loans and credit that cost the most. It is best to find an approach that best suits your capacity and your needs, without taking out new loans.

Financial experts suggest that you do not let your insurance lapse, especially for essentials like medical insurance and home insurance. Keep your insurance and make it work for you. As with most lenders and creditors, insurance companies are open to renegotiation of terms or financial assistance. Make it clear that you want to retain the insurance policy, as long as it is within your current financial capacity.

Also, consider bankruptcy as your last resort. Many Singaporeans are filing for bankruptcy in their desperation, but it has many adverse effects on your financial and credit history, it can even affect your employment. Ask for professional help if you believe your debt trouble is too much to handle on your own.

Should You Give Up Your Credit Card or Not?

Are you thinking whether or not to give your credit card up? Do not worry, you are certainly not alone. In fact, you will find some men and women who no longer make use of one. Nevertheless, if you are in Singapore—or any other country, for that matter—there are advantages of keeping at least one credit card.

Do Not Give Up When:

You need to build or maintain your credit history.

One of the best ways to have your credit history is to keep a credit card. This is because the one who requested for your credit report will have an idea of what a good debtor you are. It will also mean that you have developed a good relationship with your credit card company.

When you have excellent credit history it will be much easier for you to apply for a loan or another credit card. You may need the funds to purchase a home, fund the educational plan of your children, or buy an insurance policy or a car.

You are in Singapore.

A lot of credit cards offer support to those who decide to move and live in Singapore. Amex, for example, offers Global Assist 24 hours a day, 7 days a week. Moreover, if you order goods from other countries, the items may be provided with purchase protection. You can obtain a refund if you are unsatisfied with them or if they get lost or damaged.

HSBC Premier has special privileges offered to those who are moving to another country. Besides their 24-hour support, it can also offer you rewards and points you can enjoy while in Singapore. It will be convenient for you to apply for home and educational loans. Another popular bank that issues credit card in Singapore is Citibank.

Some transactions would require a credit card. As a matter of fact, the only way you can request for a credit report is to pay $5 through a Visa or MasterCard.

You need extra cash.

Credit cards are usually considered cash. As soon as you have them swiped, the amount is instantly debited into your account. If you are new in Singapore, you will surely be unfamiliar with the cost of living (though it is one of the most expensive countries in Asia). When the going gets tough, and you are not completely liquid, you can always count on the credit cards to help you get by.

You want to take advantage of insurance.

Some credit cards provide additional benefits to their members such as health and travel insurance. As long as you use them wisely, they can be of great help. What’s more, there is a good chance that the insurance coverage will be extended to your immediate family members.

Give Up When:

You can no longer pay.

It is completely useless if you still maintain a credit card when you no longer can afford the repayments. However, before you officially give it up, consider talking to your credit card company first. If you are having a difficult time making repayments, you may be given a grace period. It is also possible you can ask to lower your interest down, especially if you have been a good payee until now. A lot of these companies are willing to study your case and reconsider. They would surely like to keep good clients in their accounts.

You have too many of them.

The most advisable number is two. This way, you can keep the other one as a backup. It is not a good idea to have plenty of credit cards in your wallet. They normally spell trouble for you. You will find it difficult to monitor all your repayment schedules. They will also not appear too well in your credit report. It may tell your future creditors you are having a hard time paying off debts, so you are counting on credit cards.

If you are in doubt which to give up, start with the newer ones. Keep the older ones as they are ones that may have provided you with good credit history. Moreover, most likely you have already built good partnership with the credit card company.

You prefer to pay in cash.

Some people would just like to pay their goods in cash. That is still all right, but you still have to remember that credit cards are needed to have your credit history. You may consider paying goods purchased online through your credit card instead. That will also save you the hassle.

The truth is unless the credit card company is the one that decided to sever ties with you, to give up the credit card or not will remain your choice—your preference. Hopefully, after you have read the reasons above, you can make a good decision as to what to do. 7T

To Move or Not to Move: Choosing Between Being a New Customer and an Existing Customer

To Move or Not to Move: Choosing Between Being a New Customer and an Existing Customer

So you current have a current account in a specific bank. Because you are a good customer—you fulfill the requirement monthly minimum deposits, you pay your overdrafts on time—your bank offers you a promo that you think you shouldn’t afford to miss: a credit line with interest rates lower than the industry standard. What do you do?

This isn’t a unique instance. Banks and other financial institutions really offer good rates to existing customers who have been good clients. The rationale here is obvious: since you were a good current account holder, you will probably be a good borrower as well. What they’re trying to do is attract good business by giving you good rates. And, of course, good rates should never be disregarded. Unfortunately, good rates are not the only factors at play here.

Insurance

This one is the easiest of all. You need to go with the new provider if the new provider offers better rates. There are small benefits when you remain with the same provider for a long period of time. However, most of the benefits can now be carried over or passed over from the old provider to the new one. There isn’t an inherent need to move, however; if you are satisfied with your rates and you think you will no longer get anything better, you’re better off sticking around.

Credit cards and loans

Consider getting credit cards in the same bank you have a current account or a saving account. Having both current account and credit account in the same bank is convenient, especially if you do a lot of bank transactions. However, there are certain dangers to be considered here.

First, you should know that banks have the right to set off payments in case you fail to pay your credit card bills after a long period of time. The procedure here is simple. Say, for example, you currently have a 50,000 Singaporean dollar credit card debt and funds in your saving account worth 5,000 Singaporean dollars. You have missed 5,000 Singaporean dollars worth of payments on your credit card debt over the last five months. The bank has the right to take your 5,000 Singaporean dollar deposits to offset your late payments.

The right to set off does not differentiate between bank accounts—saving accounts, current accounts, and even fixed deposits accounts can be accessed by this bank right. Of course, your funds are safe as long as you pay on time. Generally, the right to set off is used as a last resort by banks, in case their clients suddenly go delinquent for a long period of time.

Bank loans are pretty much the same. As with credit cards, banks can set off payments in case you go delinquent on loan payments.

An additional condition: when the bank falls. What will happen to your deposits in your bank accounts in case the bank files bankruptcy?

Imagine this: you have 10,000 Singaporean dollars in your VIP banking account. In the same bank, you have a balance of 10,000 Singaporean dollars as well (for a car loan, perhaps, or a home loan). You are always on time when it comes to payments. Yet, when the bank falls, it can take your deposits on the bank account to pay off your remaining 10,000 dollar debt.

Current accounts and saving accounts

How about bank accounts with no credit line? Is it safe to get a current account from the same bank you have a saving account, and vice versa?

The appeal of getting a current account in the same bank you have a saving account in is definitely strong. Banks are likely to offer a linking bonus in case you plan to have both accounts in one bank. A linking bonus is basically in the form of a better interest rate. After all, saving accounts do have better interest rates. Your current account may not get the same full benefit of your saving account, but there is an improvement—and any improvement should be good, right?

Unfortunately, that isn’t always the case. Most of the time, the special interest rates for the linking service are usually lacking; you might be able to find better rates elsewhere. Therefore, it is essential that you look at the specifics. The rate advertised may not be the rate that will be given to you. Also, be reminded that you are not likely to get these benefits if you simply opened a current account and a saving account at the same time. These benefits are for existing customers. Your history with the bank plays a huge part here. If you want to get these benefits, wait until you have a deep history with your bank (a year or two of being a good customer will do).The same idea works when getting a saving account from the same bank.

If the rates of the accounts are satisfactory and the bonuses for linking are above par, you need to assess the service of the bank. Are you satisfied with their overall service? Do you think there is a need to move? Look at the specifics of their services.

What about the right to set off when it comes to overdrafts? This right only applies to credit lines—and a current account (the bank account that makes overdrafts possible) is not a credit line despite the fact that you can get money from your account beyond what it actually has. You do not have to worry about the bank setting off from your saving account when you have unpaid overdrafts.

In the end, it’s pretty much about the services you are getting now and what you could be getting from another provider. Follow what many experts say all the time: shop around and always—always—look for better deals. Doing business with an institution or company you’ve been with for a long time does seem appealing because it is familiar, but there is definitely a better option out there if you try to venture out of your box.

7 Tips for Refinancing and Handling Financial Setbacks

When talking about money, the best way to enjoy its existence is by spending only for what is necessary and then saving up for the future. Take it from most families who are suffering financial setbacks and they’ll attest to such statement. With the case of refinancing a home loan, you should also know that every decision you make should be for you to save rather than spend. This way, you will be able to accomplish your long term goals in a shorter period of time, also given the luck that you’ll be getting. Thus, here are 7 helpful tips when you are at your wit’s end trying to patch things up with your mortgage.

(1) Singapore citizens are lucky enough that the Housing Development Board has existed as early as the 1960’s to build and offer low cost flats to the low income group. This form of government support is beneficial especially for the less fortunate who has to struggle in reaching their goal of owning a property.

(2) In the past, when you talk about refinancing your loan, you can do so and effectively lower the interest of your debt or lessen the monthly repayment amount. However, present times have changed the scheme as well, thus posing a difficulty to most. If your credit files show of late payments, your home is declining in value or that you are suffering from a seasonal/unstable income, you might have it harder indeed. While for those who are free from such setbacks, they can then approach a lender and assess the different refinancing options in order to choose the most appropriate one. Together with this, they should also learn the current rates in the market.

(3) There are applicants who might experience a loss of income or bear with a seasonal one that is always uncertain as to when it will work out again. This is the reason why forbearance is worth asking about since lenders might actually consider lowering or eliminating some mortgage payments for the benefit of those who are struggling financially, and with an apparently reasonable cause. For this tip, humility is required because such favor is a great privilege to let you off the hook and allow you to breath for the time being. Again, it is worth asking about because the security of your long term goal is the topic at hand.

(4) With the current loan that you have, you can actually consider changing the terms if allowable by the lender or better yet, if it was agreed upon beforehand. What are the changes that you can do? You can lessen the amount that you have to pay but in return, the penalty would be a prolonged loan term. Meanwhile, you can also opt to pay off any delinquency in future payments. This option is the most likely choice by people because money really is hard to earn and struggling financially is no easy thing. Some lenders might actually consider lowering the amount of the monthly repayment plan for the benefit of those who are still gaining their footing from all the financial setbacks they are experiencing.

(5) When you want to avoid foreclosure or repaying the lender as soon as necessary, there is no other logical option but to sell your home no matter how hard it is to let go. If the home in question is valued lesser than the actual amount of the mortgage, permission should be asked from the lender to short sale it or sell it as a loss on the current value.

(6) A deed in lie of foreclosure involves returning the title of the property and the property itself to the mortgage holder. Such is done when the debtor can no longer commit to pay off the loan and also to avoid foreclosure.

(7) Equity skimmers can be scammers, so you have to be really careful with whom you’re going to trust your property with. When facing foreclosure, you might receive solicitations from companies who will express interest in your cause by offering to take ownership or selling it for you. However, you shouldn’t give in immediately so as to free yourself from the trouble the soonest. What you should do is go for lenders who are trusted and who could give you the right assistance so that you won’t suffer further losses and regrets.

A History of HDB Housing Units

A History of HDB Housing Unit When purchasing flats sold by the Housing and Development Board in Singapore, there are several factors that you need to take care of. However, we first have to define what HDB is and what it does. HDB, which is under the Ministry of National Development provides for the public’s housing needs in Singapore, which is also subsidized by the citizens there as well. With the persistent existence of slums and squatters area, it was in 1960s when they started to move the residents into more decent, state built, low cost housing units.

History

When Singapore was granted the privilege of self governance, there was immediately the shortage problem in housing.  In order to address this issue, the Housing and Development Act of 1960 was passed by the government and HDB was formed to replace the Singapore Improvement Trust. It was Lim Kim San who led the starting stages of formation which aimed to build a good quantity of low cost housing units up to what their capacity can manage.

Whereas the Five-Year Plan was made known to the public around this time, the said units were specifically made for the benefit of those who had low incomes and needed places to stay in and possibly rent at. Despite the challenges, there were 54, 430 housing units that were built from the formation in 1960 to 1965. The choosing of high density and high rise flats was only logical because there were obvious land constraints.

A manifesto was set out by the Singapore government and HDB’s policies were of the same aims and the same thinking. It has been said that through this new scheme in housing, social cohesion and patriotism was promoted, probably because it addressed the needs of the low income group, giving them a chance at life. For whatever purpose it served and benefitted, HDB is still currently on to this project. Now going back to the 1990s, it was then that they added more features to better their services.

For example, older flats that existed earlier than others were upgraded to come to terms with the newer ones and new facilities were installed like lifts that act as elevators for the ease of transport to every floor. Meanwhile, while there were indeed senior citizens who also needed assistance, studio apartments were built for them. Soon enough, young professionals or working singles started occupying them as well as they deemed it fit for their situation.

Eligibility

Not everyone can be immediately accommodated with these privileges, and this is evident with the HDB rule that pushed forth for the requirement of obtaining an HDB Loan Eligibility Letter by potential flat buyers. The said letter will contain the following information: maximum amount of money that can be borrowed (which will be determined by the purpose of the loan), the period in which the repayment will be made and how much will be paid for every monthly installment.

What’s the purpose of such additional steps? It is to ensure that people who are hunting houses would have a better grasp of the state of their finances before shelling out money. It is with a good household budget that they will surely know what their current expenses are and what kind of flat they can afford or up to how much they can pay for a long term goal such as a house. Money isn’t easy to earn thus it is wise to let buyers do the work of ensuring that they can handle this big of a commitment.

When doing the application and when you are ready to submit, you can do so online for your convenience. Meanwhile, after that you should have the form printed and signed by yourself. All the required documents should also be gathered and readied at this point. Once everything is there, you can proceed to the submission of everything to HDB, and make sure to do this within the week in which the application is dated.