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Planning a strategy to get out of debt

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SG Budget Babe

Savings

Investments

Loans

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/ Next, we will need to understand the expenses associated with your school, e.g. school fee, materials, living expenses. From there, we will work out an entire budget for the semester. Thereafter, divide it by the number of months to know how much you need to save today. Now, to create a budget, the best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/ By understanding our current cashflow and through the process to creating a proper budget, you will be ready for your school. Here is everything about me and what I do best.

Investments

Loans

Assuming that you are using the local university student loan from OCBC, it is interest free during your course of study. Upon graduation, you will have up to 5 years to clear the loan without interest. Otherwise, the interest will be 4.5% per annum (subject to change based on prevailing rate). Now, you have to decide if you are able to invest and earn the entire school fee beofre the end of 5 years upon graduation. Otherwise just pay off the loan and earn 4.5% return immediately. By clearing your loan, you earn a guaranteed return of 4.5% while your investment return is not guaranteed. This is a choice that you will have to understand and choose wisely. Here is everything about me and what I do best.

Property

CPF

Loans

It is up to your personal investing methodology and beliefs. If you believe that cash on hand can generate you more ROI than the rate CPF is giving, then you might want to consider paying using CPF.

Investments

Savings

Loans

Family

Stocks Discussion

Lifestyle

Hi anon, Sorry to hear about your financial situation. I was stuck in a similar situation when I entered university more than 15 years ago as my mom is a homemaker and my father is a taxi driver. Here are some things I did to help myself back then. - Earn more side income. I gave a lot of tuition to supplement my pocket money - Buy second hand textbooks where possible. This saved me a fair bit - See if you can get bursaries that can stack on top of your scholarship - Take profit if you can prior to year 1. When studying, I won't want to be distracted by any worries about my investment and their performance - Take up internships during the holidays for another source of income - And lastly, if you really need to take the loan, it's not necessarily a bad thing. Don't fret!

Lifestyle

Family

Loans

Property

We will need to know all the charges associated with the switch, e.g. interest rate, lock-in rate, legal fees. From there, we will recalculate the entire loan to derive at the actual effective annual rate. Thereupon, we will know if we will be able to save money from the refinance or to remain as it is now. Here is everything about me and what I do best.

Loans

SG Budget Babe

Junus Eu
Junus Eu
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Top Contributor (Nov)

Level 9. God of Wisdom
Answered 2w ago
Compare that 2% against the interest rate you can get with things like high interest rate savings acounts. If you are confident of generating 2% on your money, then I would say go with that instead of paying off the loan.

SG Budget Babe

Loans

HDB BTO

It depends on how your long-term planning and outlook is. This requires in-depth financial planning for your future. In most cases, my first choice will be HDB loan - lesser cash outlay for downpayment and fixed interest rate for the loan tenure. While bank loan offers lower rates, they are non-guaranteed after the lock-in period. Accordingly, re-financing is not free and there are various legal fees to take into account in addition to the time wasted. Depending on the option that you have chosen, there will be different terms for early repayment. In most cases, I will advise my clients to plan with the long-term in sight. Understand the opportunity cost of your dollar and make a decision that optimises its value. If possible, consider stretching the loan as long as possible and keep more cash on hand if you need to, e.g. for family planning. When it is possible, make an early repayment to reduce the outstanding loan. Here is everything about me and what I do best.

Loans

Payments

Grab

It depends on whether the merchant accepts it. Give it a try and update us so we can learn together. Here is everything about me and what I do best.

Career

Loans

Education

Junus Eu
Junus Eu
Top Contributor

Top Contributor (Nov)

Level 9. God of Wisdom
Answered on 20 Oct 2019
Suggestion: Learn on the job!

Property

Loans

Not that I am aware of. If your concern is on the interest payable or has the intention to make early repayment to the loan (so that the entire loan is paid off earlier), then check with the provider (e.g. banks) to see how you will be able to work out a monthly instalment with an ad-hoc payment every month. From there, they will be able to advise you on the best way to reduce the total loan payable. Here is everything about me and what I do best.
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