When you are young it is tempting to adopt the ‘buy now, pay later’ policy. However, if you are not careful with how you spend money, the debt you incur today can haunt you later.
Here are some tips to handle you student credit card debt smartly, especially if until now you’ve been guilty of not managing it as well as you should.
1. Take stock of the situation
The first thing you must be aware of is how much you owe. And the next thing is whether you are currently in a position to pay the monthly installment in full.
Paying just the minimum money every month is a big mistake and will cost you dearly in future. Therefore, focus on paying the monthly installment in full every month. If you can’t do that, consider the next three steps.
2. See if it is possible to transfer the debt to a card with a lower interest rate
Transferring your current debt to another credit card is a good option if the interest rate of this card is significantly lower than your other cards.
Here’s an example how you stand to gain in such a situation. Let’s say you have three credit cards A, B, C, with an outstanding amount of $7000, $5000, and $1000 and a rate of 30, 25, and 10 percent, respectively. In such a situation, transferring your debts to card C makes much sense, because its interest rate is considerably less than others.
3. See if debt consolidation will help
Debt consolidation is a process which consolidates all of your unsecured debts into one secured debt having a lower rate. As a result, you will end paying a lower monthly installment.
Before opting for debt consolidation, you must be aware of certain facts. One, debt consolidation is not a quick-fix solution to your credit problems. It is a legitimate process which allows you pay off your debts more quickly. Two, it doesn’t affect your credit score negatively. Three, you can rope in the services of a professional agency for this purpose or do debt consolidation on your own.
4. Go for debt settlement if there’s no other option
The last resort is to opt for debt settlement, in which the lender will agree to write off a part of the loan amount. However, debt settlement seriously affects your credit score and ability to take a loan in future. Nevertheless, it is a much better option than defaulting, which might lead to legal procedures and make you forever ineligible for a new loan.
If you are looking to get a loan to clear off all your debts, have a look through our list of licensed moneylender in Singapore.
Credit Review is a platform for people to look for legal and licensed moneylenders. If you are unable to get a loan from banks, moneylenders are your next best option. We have created a platform to showcase the best moneylenders in Singapore. Why do we do this? This is because there are so many moneylenders in Singapore and we want to help you shortlist it.
After a serious round of reviewing the moneylenders in Singapore, we have listed the best on our site. If you have any feed back on them, please kindly let us know! If you feel that there are better moneylenders who should also be on the list, drop us a message!