A financial crisis may happen to anyone at any point. Some may have problems repaying their debts due to bankruptcy. Others may have miscalculated their budget for the future. It could be an unexpected job loss, or an investment that didn’t work out. Regardless of the reasons, the best thing you could do is to face the challenges, and start moving forward.
The first thing you need to do is understand that the process may take some time. Keep your composure, and be patient. Follow the steps below, and you will soon recover from this crisis.
Step 1: List Down all your Outstanding Loans
Before you can make action plans for your financial obligation, you need to know the exact amount you owe for each creditor. Get a copy of your updated credit report. Knowing your debts should help you manage your spending habits. Avoid making unnecessary expenses, until you have cleared your financial obligations.
Step 2: Make a Budget Plan
Once you have a detailed breakdown of your debts, you need to create a realistic budget plan for the year. This should help you prioritise your obligations. Again, focus more on your daily necessities. Start looking for a new job, or explore your options for another source of income. Employment should help you get qualified for financial assistance.
Step 3: Discuss your Concerns with your Bank
Before looking for other financial aid solutions, you might want to consider talking to your bank first. They may offer other alternatives to help you settle your unsecured debts through instalments. Some banks may also refer you to reliable credit counselling companies. These professionals can create a strategic financial plan to help you pay your debts.
Step 4: Check your Assets
If you have any valuable properties such as cars or land, you might want to consider selling them to raise some funds. Get a good appraiser to ensure you’re getting the amount you deserve for each asset. Use the money you will get to pay your debts with higher interests to avoid extra fees.
Step 5: Enquire about Balance Transfer Options
Several financial agencies offer balance transfer service. This should assist in consolidating your debts from multiple credit card companies (at high interest) with one lender. Today, moneylenders in Singapore have helped a lot of people from their financial crisis by offering them lower, or even no interest rates. Keep in mind though that they may charge a service fee of 1 to 2%.
In addition to simplifying your repayments, they are also more lenient or flexible when it comes to timeline. Usually, the interest-free periods can range from 3 to 12 months. Unlike most credit card companies, you need to pay the interested rate on a monthly basis. They can even charge you with late payment fees, making it more difficult to settle your balance.
Dealing with this situation can make you uneasy. While it can be a tough challenge for anyone, you need to stay positive. Just stay calm, and start planning for the future.