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Planning a strategy to get out of debt

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Junus Eu
Junus Eu,
Top Contributor

Top Contributor (May)

Level 8. Wizard
Updated 14h ago
DON'T BE DISCOURAGED! Everyone goes through difficullt times. Let's put your financial situation down: Basic salary: $3k Side income (note: this is NOT passive income, as passive income it's what you earn without you doing anything. If you stop giving tuition, you won't have that income: Say $500? Total Monthly In: $3.5k Total Monthly Out: $500 (school loan) + $500 (family) + $100 + $500 monthly expenses estimated = $1.6k Your $28k student loan - with you contributing $500 a month, you would be done in 56 months. You probably are more than one year in - what are the terms of this student loan? It still puts you in a pretty good position! The fact that you are earning a side income, and also look to contribute to your family with $500 a month is already very commendable. At your age, I would look at accelerating your monthly income. There is a max to how much you can save, but the upside you can get through various income streams is limitless. Learn new skills, pay off your debt sooner than later, invest wisely.

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I feel that the decision made has to depend on your risk appetite. Your debt will incur an interest, say for example 2.6%p.a. in the case of HDB loan. If you're confident enough to generate more than 2.6%p.a. return on investment with your lump sum, then you shouldn't use it to pay off the loan, but instead invest that lump sum to generate more returns. Conversely, if you're risk adverse and would have kept the money in the bank, you should repay the loan. There's no need to do this 100%, you can split the lump sum partially to repay loan or invest depending on your confidence level. Also some loans charge fees if you repay early. Do take this into account!

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Xinyi Lum
Xinyi Lum, Content Strategist at Seedly
Level 5. Genius
Updated 4d ago
Hey Anon Great question! Must be quite a troubling dillemma and I hope you eventually choose what's best for you. A few things for you to think about: - What stage of your relationship are you in? - Will your turning him down change your relationship? What's the dynamics between the both of you? - Are you already planning for your future? Settling down etc. If yes, this means you can more likely trust him with 16K - How's your personal finance planning as a couple? Are you comfortable having conversations about money?☔️ The part about 'transferring' to his mother or sister got me a bit puzzled, because ultimately you'll still be the one with the money to lose anyway, even if not in name. For formalities' sake and to protect yourself just in case, I'd suggest you make sure all transfers of money be documented properly with labels and make sure things are written down in a traceable manner. Cynical or not, these are the kinds of records you will need in desperate times. 🌚 If I put myself in your shoes, I'd imagine as such - Worst case scenario: You'd be left 16K poorer with a huge imaginary slap in the face and most likely single. Also, if that 16K is/was whatever you had in your bank, then you'd best be prepared to have someone you know you can turn to for money to build yourself back up during the period of absolute broke-ness. (Hello, parents👨 👩 👧) Ideal outcome: Boyfriend fulfils his bond and returns you your money in due time, case closed. All the best! ⚡️

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Ernest Yeam Wee Leong
Ernest Yeam Wee Leong,
Level 4. Prodigy
Answered 1w ago
If the loans in p2p get defaulted, it means that the borrower has failed to make repayment. What happen nexts could be the platform tries to get the borrower to do partial payment or persuade them to make repayment at a longer period. if the company does not pay, the platform may get a debt collector to make the borrower pay. End of the day if the borrower really has no money and declares bankruptcy, then your money is gone. Experienced something similar of a company default and wrote my reviews about it here. http://justbeingernest.blogspot.com/2017/07/moolahsense.html

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The loan u described is called loan from family or friends. If they agree, u can pay back at the end. Of course, if u cannot payback then u lose their trust.

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If you are using money from ssb @ around 2% to pay off loans with interests of 2.74%..then it can be considered. If you have additional cash able to generate consistent 5 to 5.8% dividends... Then why use them to pay off a 2.74% interest? You can enjoy the leverage still and liquidity of funds if needed. Importantly, make sure you still have sufficient emergency reserves if you choose to redeem your loan. Pros you get ease of mind and can consider to switch job etc easier if you have a lower loan commitment. But if you have a better way to gain additional interest above the loan interest, then why not make use of this leverage? You can also consider refinancing to lower your loan interest rates as well.

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Hey there sorry but please stop your friend to apply for his self voluntary bankruptcy proceeding. If a creditor applied for his bankruptcy, they can recover the application deposit of $1850. I have no idea where the remaining $2k plus goes to;did your friend let you know? https://www.mlaw.gov.sg/content/io/en/bankruptcy-and-debt-repayment-scheme/information-for-bankrupts1.html

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David Morgan
David Morgan,
Level 3. Wonderkid
Updated 2w ago
That’s tough but you have to keep going. What are you currently working as? Do you have any high income skills? Do you have any passion that you could turn into profit? If you are lazy to even explore then I would suggest to just find part time jobs during the weekend? If you have to spend family time at home or have to be home during weekends, maybe you could find home based jobs like freelance Social media marketing or free lance digital work such as video editing for clients and such. I had debt too and i had 5 debts to repay to. My monthly salary then was around $2k and my debts amount to around $10k. What I did was to sacrifice some of my own entertainment and leisure spendings. I unsubscribe to my Netflix, I took public transport instead of renting a car, I cooked my own lunchbox in the morning to eat and I remember I had an extra $100-200 to spare each month and I pumped that extra amount to the highest debt first. So let’s say the most highest debt I’m paying is around $500/month. So with that extra $100-200, I’m now paying back $600-700 to that debt. Takes patience and consistency. And once I’m done with that highest debt, i will go on to the second highest debt. Let’s say I’m paying around $350/month for the second highest debt, I now do have extra $600-700 since I cleared the first debt and pumped it in. And now I’m paying my second debt with $1000/month and clearing it even faster and so on and so fourth till I’m debt free. But once I’m debt free, I learnt to spent wisely. Hope this helps, let me know your thoughts about it. :)

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Hi! If you are considering Citibank's DCP (debt consolidation plan) right now; I assumed that you already have debts of >12 months salary? I wouldn't recommend you to go for DCP first; for few reasons. 1. DCP works by consolidating all your existing bank debts into DCP (Citibank pays it off for you and now you owe them only). The interest rate is about 10%/annum, vs 24-30% credit card interests rate. This is not attractive; because if you go for CCS DMP (debt management plan), you could get single digits interest rates. The % rate now may not seems immediately applicable to you, but interest rates compile quickly. For DMP, if your plan is approved it'd mean that CCS has ran through with you your income vs expenditures; given you the necessary advices and negotiated with the banks for you to make payments comfortably. 2. The plan does not eradicate roots of the problem. In the first place what are the causes of your debts? Lifestyle choices or circumstantial? Enrolling yourself into DCP helps short term but does not help you to understand what went wrong and while DCP gives you a month of credits to use "for emergency uses"; honestly you're just going to rack up debts again if you don't know what went wrong and how you can make wiser decisions. 3. My personal experience with Citibank is just bad. I had a study loan long time ago and even though it was paid; I received letter of non-payment and it's difficult to get hold of their loan officers to make things right. This gives me impression that they are great when signing up; and MIA when you need them most. Nono. Lastly, I suggest you sign up for a infotalk at CCS if not already. The talk helps you to understand the differences of DMP, DCP and few other alternatives which you may explore. Also, you only furbished more details if you think you need CCS help after the talk. They will run through the process with you as well. https://www.ccs.org.sg/e-submission/index.php/member/site/info_register I came upon a write-up on the process which I think is useful for people new to CCS DMP. https://unhypemydebts.wordpress.com/2015/07/14/steps-taken-towards-dmp-debt-management-program/ All the best!

Loans

远水救不了近火. The most direct solution is to get loans from parents and relatives. You might not be able to get the full amount from one group but you can portion out the loan amount to make it acceptable by them to loan you. Getting the loan from people who trust and willing to help you, YOU MUST FOCUS ON SETTLING THE DEDT FULLY and not prolong or increase the mistake. Make resolution from this bad experiences and learn not to trust people too easily and cherish the people who help you this round.
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