Category: Debt

Onelyst – A simple way to compare loans from licensed money lenders

If you need $1000 for an emergency – to pay for health-related expenses, school fees, a funeral, or (heaven forbid) ang bao money – there are only a few ways for you to get that money. You can earn it, save it, find it, ask for it (through donations, grants, crowdfunding, etc.), steal it, win it, trade it (through selling/pawning an item), inherit/receive it as a gift/acquire through marriage, or borrow it. Most people would perceive the last option to require the least amount of effort, risk, and/or luck. But borrowing money in Singapore can be tricky and can require more effort than what you might expect. Unfortunately, the “easiest” loans to borrow are from loan sharks and unlicensed moneylenders who charge outrageous rates and have the reputation of engaging in nefarious, unlawful practices. Fortunately, with Onelyst, you can compare loan rates easily and quickly across all licensed money lenders in Singapore (over 160 of them), and even apply through their online platform.     

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Would You Ever Steal…. From Your Own Future?

debt
Debt can bond or restrict your future.
Photo by Simon Cunningham

There’s a deadly epidemic that hardly anyone talks about. No, it’s not Zika. It’s happening mostly to Indian subsistence farmers (but please read on to see how this relates to you), and the deaths are caused by…. debt. The livelihood of the vast majority of rural Indians depends on subsistence agriculture. Because of this, they are very vulnerable to weather conditions (that affect their crop yield) and also susceptible to market conditions (for the extra amount they produce to sell to the market). When they have misfortunes, moneylenders quickly come to their aid. There are also times when a subsistence farmer is allured by a promise, such as an advertisement of a service or product claiming to improve their standard of living. Whether the promise is real or false, many are tempted to go into debt to try to improve their quality of life. But for them and for many others, debt can spiral out of control and sadly, the only way out that many of them see, is to take their own life(more…)

Refinancing – Where to Start and What They Don’t Tell You

scale
Short-term teaser rates might be outweighed by long-term effective interest rates.
Photo by Hans Splinter

Before you refinance your housing loan, please think carefully about all the factors which may be affected. Many of these factors I covered in a previous post. A lot of them will appear in your contract (mostly in the fine print) but I find that very few loan consultants will take the necessary time to explain to you all the fees and terms. At times, refinancing could be a very frugal and prudent decision and at other times, it can mean trading short-term gain for eventual long-term pain. Below is one of many real-time up-to-date loan aggregate search platforms.  (more…)

Factors to Consider and the #1 Question to Ask Before you Refinance Your Loan

home money
Refinancing is all about costs versus benefits.
Photo by Mark Moz

For the first time in decades, the SIBOR rates (these affect your mortgage loans) rose significantly higher than LIBOR rates (which implies that interest rates in Singapore can go up as a result of factors other than what the US Fed does). SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interbank interest rates at which banks lend to one another.  At 1.06% (3-month April SIBOR), this key benchmark rate is 2.5 times higher than the 0.4% in 2014. As mortgage loans are priced according to SIBOR, this is causing many people to wonder if it’s time to refinance in hopes of seeking a lower interest rate. But you don’t get something for nothing (at least not typically in the financial industry) so you need to consider the costs versus the benefits. Lenders, loan officers, and bank advertisements will entice you with interest rates, but what they never advertise is all the fees and restrictions. Here’s a countdown of some things to consider before happily handing over your signed loan documents to an eager loan officer. (more…)

4 Things to Invest in that will Make You (Not Your Financial Planner/Broker) Wealthy

investing conf
You’ll never hear these tips in a financial seminar (because these tips won’t generate a commission).

It seems that everywhere you look, there’s some guy hosting a free seminar who’s going to divulge the latest secrets on how to pick winning stocks and other too-good-to-be-true tactics. Sometimes these talks are hosted by financial services companies like RHBInvest and Phillip Capital, or by notable experts in the field, like Mark Lin and Nicholas Tan. Other seminars are held by financial education companies, like Wealth Mentors, where much of what they teach could be found in a good book (free, from the library). As a former financial educator who was not tied to an investment company or to selling certain products (and therefore, I had absolutely no conflicts of interest), I can honestly say that for the vast majority of people, all these seminars are really “barking up the wrong tree.” These are what I found that the vast majority of people need to invest in: (more…)

Why Banks are the Tallest Buildings and Lamborghini Drivers are Poor

easy credit
Note to MAS: don’t just put a limit on unsecured debt, put a limit on credit card & loan solicitors!

In every city, usually the largest and tallest buildings are bank buildings. This should give you a sense of how much influence and profits they have. They are often much bigger and more prominent than government buildings. Many of them make the majority of their money through personal banking services, such as through loans and credit cards. Although just about every religion forbids usury rates (i.e., excessive or abusive interest rates that unfairly enrich the lender), banks somehow are able to issue credit cards with 26% annual interest and nobody seems to object. I recently attended a talk in which a Singaporean economist said that about one-third of credit card balances in Singapore are revolving (and are thereby subject to these outrageous interest rates). The sad thing is that once your balance is subject to these high rates, paying off the principal becomes extremely difficult because the interest just keeps growing exponentially. (more…)

The Myth of Home Ownership in Singapore, and Why I Choose to Rent

Owning vs renting a home
Many home owners in Singapore are, in reality, renters as they do not really own their homes .

Although I own properties overseas, I am a renter here in Singapore. People keep telling me that “renting is just like flushing your money down a toilet”. When I ask these people whether they rent or own, they proudly proclaim “own, of course!” But do they really own their home? Most people who purchase a home, do so with a mortgage, a word that originates from Latin meaning “death pledge” because it often took the entire life of a person to fulfill the pledge. Until recently, a person in Singapore could buy a home with 5% of its value in cash, 15% in CPF funds, while the rest (80%) is lent by a bank. For a BTO, the rules used to allow for 10% down and while the other 90% was financed. The amount financed, of course, comes with interest. So let’s dissect what is actually owned. (more…)