Reasons Why Shouldn’t Use A Personal Loan To Pay Off Your Credit Card Debt

Many people in Singapore hold multiple credit cards at the same time as each card has its own unique benefits. Under such circumstances, people can potentially fall into a debt trap as he/she owes money to several creditors. There are multiple payments and due dates to keep track of, and the non-stop reminders about unsettled balance only adds to the tension. As you fall behind the due dates of making the payments, your debts will only become larger. One of the way out from this debt trap is having a personal loan known as Debt Management Plan or DCP.

DCP was introduced by Association of Banks in Singapore (ABS) in the early part of 2017 for all Singapore nationals and Permanent Residents who are facing difficulty in settling their debts. DCP is a type of personal loan where you can borrow a lump sum amount to pay off all your current debts right away. However, you can take the help of a DCP only for unsecured credit facilities such as personal loans, credit cards and other credit lines. Let us take a look at some of the benefits and drawbacks of a Debt Settlement Plan:

Benefits

  • You only have to make a single payment per month as a DCP consolidates all your debts into a single debt. This will help you save your energy and time and cutting the stress of missing a payment, as you no longer have to keep track of all the different creditors.
  • Lower interest rates with a DCP makes it easier to pay off all your debts and actually make visible progress.
  • When a DCP is managed well, you have a better chance of saving some money instead of spending your whole monthly earnings on paying bills.

Drawbacks

  • The biggest drawback of DCP is the potential of getting into more debt. People who are not careful about their expenses and have a habit of gambling are prone to get themselves further into debt.
  • Even with low interest rates, you may take longer to pay back your debt with DCP. In the long run, this will lead to more interest payment. To avoid this, you must concentrate on paying off your debt as early as possible.
  • If you fail to make timely payments, fines and interests will be imposed, which will only enhance your burdens.

If you choose to transfer your DCP to other banks, you will have to do it three months after your DCP is sanctioned. You will be subject to penalty fees which the original bank may charge for early termination or transferring your DCP. Since a long commitment is required with a DCP, you should do your research extensively before applying for a plan.

Once you have taken a Debt Settlement Plan, all your prevailing credit cards and unsecured debts are adjourned. You will be offered a revolving credit equivalent to your one month’s salary. You will not be eligible to apply for any new unsecured cards during the time your DCP is active, unless you have repaid a part of your debt.

Eligibility criteria

To be eligible for a DCP, you must be a Singaporean or a Permanent Resident. You must have personal assets worth less than S$2 million or your earnings should be in the range of S$20,000 and S$120,000 a year. Your consolidated unsecured debts must exceed by over 12 times your monthly income.

Fees associated with a Debt Management Plan

There are a few banks in Singapore that charge a fixed processing fee while the others charge up to 3% of the sanctioned loan amount. You should opt for a personal loan to finance your crises if you can wait for a few days. Personal loans are better than cash advance because of fixed monthly payments and low interest rates.

A Debt Settlement Plan will help you pay lower monthly sum with low interest rates. As a result, it will help you focus on a single contribution every month and have less financial strain. A personal loan in the form of a Debt Management Plan will help you negotiate with your creditors for removal of penalties to make your loan amount lower.

Student Pay’s Off $60,000 student Loan Playing Online Poker

I thought this might be an interesting article to list since I only started this new site less that 2 weeks ago. This site is all about debt and everything that goes along with it. I barely had this thing up and going and i was getting emails from people telling me their debt stories and I have no place to put them so I figured I would add them on here until i’m ready for them so here it is:

To: whom this may concern,

I noticed you started this new site and wanted to hear about debt and all the stories people have whether good or bad. Well I have an interesting story for you not one that a lot of people would agree with but one that I did and paid off in a big way. I graduated from Ohio state in 2005 and had no idea what i wanted to do in life. I had around $60,000 in student loans and was being “killed” (sorry but I didn’t know what other word to put there) by the interest on the loans as you know many of us students are. I worked my butt off and tried to pay this down during school and didn’t have much luck with the cost of living.

So one day I was surfing around on the net and saw all these articles about online poker and I said what the heck let’s try it out, one site was offering 100% match on my deposit. Now i’m from a very religious home and gambling is not tolerated.

So here goes I deposited $800.00 it was the last of my student loan money and well I was up $500.00 in the first 10 minutes, I thought AWESOME here I go. I played for several hours and didn’t move very much that day. So the next day I woke up and played again I went UP $2500.00. I was darn near rolling over on the floor. So I figured I would go grab something to eat and came home and played again. Now i’m thinking I have issues with gambling. So I figured if I went up anymore I would quit. Well that never came I went down $600.00

On to the next day a Sunday (god’s day)hahah I thought OK i’m gonna win today. I wasn’t playing for 20 minutes and I was broke. I LOST it ALL I didn’t know what to do talk about depressed. So back to the drawing board. I started mowing lawns and was making OK money but the thrill of winning that money playing poker never left my head.

Now that everyone thinks I have a gambling problem I went on and played again FOR FREE this time and went into a FREEROLL tournament(is a tournament you can play and win small amounts of money or entries into bigger tournaments) so I play about 20 tournaments lost them all and started to give up. There was one more tournament at 9:30pm for a free entry into a big tournament. The problem was there were 2500 people playing for this. Well I played and 8 hrs later I won the tournament and I was in to the big tournament.

So the following Saturday is the big day. Well I was late by 30mins I was down big time but I was still in the tournament just sitting out every hand. 7 1/2 hours later I was the winner of $100,000.00 Yes I could not believe it and I still do not believe it but here I am today debt free of $60,000 and off to the wonderful game of life.

Till this day I have not played online poker or any type of gambling. I figured My wish was granted

CHEERS

GOOD LUCK WITH THE SITE LOOKS GOOD

Loan Sharks

In the world today, it is not at all unusual to find yourself short of the cash you need to pay your bills, feed your family and maintain a reasonable lifestyle. For every working stiff who runs out of money before they run out of week, there are unfortunately a number of shady characters willing to loan you all the money you need at an exorbitant interest rate. You will have to be careful to avoid these loan sharks when you find yourself in need of quick cash.

Loan sharks are not just something made up in Hollywood to sell movie tickets. Unfortunately, loan sharks are all too real and getting involved with one can wreak havoc on your personal and professional life.

Loan sharks prey on people in financial distress. These people are often unable to obtain loans through traditional channels like banks and savings and loans. Often this is because of either bad credit or the nature of the debt they have incurred. A compulsive gambler may not be able to convince their local bank loan officer to help pay off their gambling debts. Likewise, if your credit is poor, you will find it extremely difficult to obtain a loan at a reasonable interest rate. Any time you borrow money, it is vital to know the interest rate you will be required to pay. If you interest rate is too high, you may never be able to pay off your debt. Your debt may pile up faster than you can pay it off. This is good for the loan sharks but bad for you. Loan sharks want to keep you in debt. This makes you dependent on them for ever increasing amounts of money.

Even if you are not a gambling man and not involved in any shady dealings, you can still fall victim to loan sharks of various stripes. Many so called payday loan and payday cash advance companies are actually loan sharks in disguise. They often charge exorbitant rates of interest in exchange for the quick cash they dispense. Although technically legal, these businesses are considered loan sharks by a great many of their former and current customers.

No matter what type of loan sharks you get mixed up with, extricating yourself from their clutches may be one of the biggest challenges you will ever face. Loan sharks, both the legal kind and the back alley kind, are notorious for chasing down the money they are owed. While not every loan shark is of the old leg breaking school, they will find ways to make your life miserable until you pay them what you owe. They will most likely visit you at your home or place of work to demand their payments. This tactic is extremely effective for the loan sharks and highly disconcerting for you. In addition to putting your personal relationships and your job in jeopardy, these type of tactics violate your sense of personal freedom and personal space.

The best way to deal with loan sharks is not to get involved with them in the first place. Anytime you need a loan, make sure you deal only with reputable firms. Make sure you know with whom you are dealing and that you get a full disclosure of the interest rate charged by the lender and all associated fees. One of the most common tricks loan sharks use to keep their customers in debt is to charge extremely high late payment fees, often as high as 1 to 1.5% per day. You can see how quickly your loan can spiral out of control at rates like this.

If you’ve already fallen into the clutches of a loan shark, the best way (probably the only way) to make them go away is to pay your debt in full. You may need to swallow your pride and borrow the funds you need from your relatives. It is always hard to admit to financial problems, and many people let their debt get completely out of control before they seek help. Your family and friends will most likely be willing to help you out with your financial issues. They will probably be more understanding than you expect. After all, most people wrestle with financial demons at some point in their lives.

Once you have banished the financial demons that loan sharks represent, it is vital that you not repeat your past mistakes. If you have a problem with gambling, seek help for your addiction. It is important to get your financial house in order so that you will no longer be easy prey for the loan sharks that prowl the financial waters.