Related to Financial Planning – Bankruptcy

Posted by admin
on June 26, 2014

When can you be made a bankrupt?
When the amount of money you owe reaches an excess of $10,000 and you are unable to pay up. When this happens, a bankruptcy application can be made against you to the court. If the amount you owe in debt is below $100,000, you will be referred instead to the Insolvency and Public Trustee’s Office. There, you will be assessed and if eligible, you will be put under the Debt Repayment Scheme (DRS).

What happens when you are officially declared a bankrupt?
The Official Assignee (OA), which refers to the person in-charge of administering a debtor’s bankruptcy affairs, will begin by taking stock of all your assets that you have in your possession. Your assets will be sold off so as to pay your debt.
If you do still continue to have income while you are a bankrupt, you are required to declare and disclose it to the OA. A portion of your income will be channelled into the bankruptcy estate and will be used to pay off your debts.
Needless to say, bankruptcy is something you would really want to avoid at all cost, because it can change your life drastically and may even affect your friendships and kinships. Bankruptcy can cause you many unwanted worries and may even affect your career.

Restrictions during Bankruptcy:
• You will not be allowed to leave the country unless otherwise approved by the OA.
• If you are currently a public servant, you will not be allowed to continue. You will also not be allowed to take up public office.
• You will be relinquished of any company director position unless otherwised approved by the OA or the Court.
• You cannot sue any persons in court without seeking the OA’s permission (unless it is an action for personal injury).

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Financial Planning – 3 Steps

Posted by admin
on June 17, 2014

Taking charge of your finances is important because you will have a much better idea of where your money is coming from and going to. And also how much money you should and should not spend.

Below, we have identified three key steps of financial planning:

1) Identify both your short-term and long-term needs and identifying your goals.
– Short term needs are immediate necessities that you need in your life.
– Long-term needs may be things like getting a health insurance policy or paying for household expenses.
– Goals will be things you aspire to have such as a house of your own and how well you would like to retire.

2) Evaluating the resources you currently have to meet your short-term and long-term needs and to achieve the goals you have set for yourself.
– Your resources may come in many forms such as your income, your savings and even bursaries or financial assistance schemes that you qualify for.

3) Managing and growing your resources.
– Manage your resources by drawing up a plan. Always have a spending budget to ensure you do not overspend on unnecessary items.
– Grow your resources through investments
– There are financial products available for you to help you manage and grow your resources so that you can meet your needs and your goals.

Get started today and make sure you plan ahead!

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Taking up a personal loan and what you should consider

Posted by admin
on May 25, 2014

There are times you may encounter financial issues and problems with paying off your debts. There may be emergency expenses such as an unexpected illness or debts incurred. This may be unavoidable and can cause you much stress. There are licensed moneylenders in Singapore that can help you tide through difficult times and enable you to borrow cash that you need to cover your expenses. What are the things you need to consider before taking up a loan? Here are some tips:

1) Comparing Licensed Moneylenders and Interest Rates for your Personal loan

The most immediate concern for you would be the interest rate for your cash loan. Interest rates vary between lenders and even banks. Therefore, it will be wise for you to compare interest rates and banks before signing any agreements with a lender.

2) Debt Servicing Ratio

Before making the decision to take up a loan, you should be aware of your debt servicing ratio. A debt servicing ratio or DSR is the monthly payment you have alloted for your bills. By comparing your debt servicing ratio to your income, you will be able to make a sound decision on whether it is still possible to add another debt in the form of your monthly repayment on your cash loan. By ensuring that your debt does not go beyond 50 percent of your income, this will increase the chances of you being eligible for a loan. This will also mean you are able to upkeep your monthly payments and not fall further in debt.

3) Choosing A Moneylender

Taking up a loan requires some thought, and after making the decision, it is time for you to look for a reputable personal loan from a local (Singapore) lender. Of course, you would want to borrow from a reputable moneylender. Some of the things you should look out for are:

– Reputation of the moneylender
– Low or reasonable interest rate
– Flexible repayment terms

The reputation of the moneylender is important and you may consider the number of years that the moneylender has been in the business. Needless to say, the longer the business has been around, the chances of it being a stable and reliable one is much higher.

If you are not sure where to look, you may consider asking your friends or family for recommendations. Someone who had taken up a loan before and was a satisfied client would be able to refer you to a licensed moneylender that they trust from their personal experiences.

Remember, you are looking for a licensed moneylender who is experienced and reputable. One that can offer low interest rate and flexible repayment terms. Before that, be sure to find out about your debt servicing ratio and understand what it means to be taking up a loan before committing! This will make the lending and repayment process much simpler and hassle-free!

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Posted by admin
on March 18, 2012

With effect from 1st June 2012, licensed moneylenders (MLs) have to follow the new rules namely:
– Use of Effective Interest Rate (EIR)
– Extension of Interest rate caps to wider band of borrowers
– Abolishment of upfront feets
– Abolishment of all exceptions to unsecured credit rules

The authority new guidelines is to :
– Maintain balance between allowing MLs to serve the market and protection of vulnerable borrowers
– Strenghten protection and safeguards for borrowers
– Ensure sufficient space for MLs to operate, to allow reasonable access to credit

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Posted by admin
on November 23, 2011

If you want that electronic products for your home but don’t have $10,000 to pay for it in one go. No matter: you can pay for it in instalments over four years with no interest, on your credit card – or so banks and retailers would have you believe.

What they won’t tell unless you ask, are the pitfalls of not keeping up with full monthly payments for that item, or worse, having your card cancelled before the loan is all paid up.

A check with local banks in Singapore that offer such schemes revealed that consumers do not get charged interest only when they pay the prescribed instalments in full every month.

If they default on a payment or roll over part of it, that portion of it will be charged interest the following month – at the usual rates for credit card payments.

So, if your credit card bill for the month came up to $1,000, of which $200 was part of an instalment plan, then paying just the minimum required sum of say $50 would leave the full remaining $950 liable for interest.

Unless consumers know how to ask the right questions, they may not understand what they are gietting into. With the rising incidence of credit card bad debt, the consumers has to be careful before committing to a long-term purchase.

The interest-free instalment plans are becoming popular, especially with yound working adults who have less disposable incomes.

Retailers had to be “completely transparent with customers”. But shop salesmen often neglect to inform customers about these “hidden costs”, sometimes because they have not thought about them.

Customers say they are often not told the terms and conditions of a deal when they sign up for one.

This meant that the usual contractual interest and late charges would apply to unsettled bills and if a credit card gets cancelled, the balance has to be paid up in full. Some bank even charges a penalty of $100 per item purchased on an instalment plan for early settlement, which prematurely ends the customer’s “life-cycle” with the bank.

So signing on that dotted line means promising to keep to regular monthly payments determined by averaging the price of the item over the chosen period of time.

Spordaic payments, or paying too little or too much would mean forfeiting that “0 per cent” interest.

Banks here are cagey about the number of customers who default or roll over balances on thier instalments but say that it is in line with overall credit card debt.

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8 Painless Ways to Save Money

Posted by admin
on January 5, 2011

We all know how to spend less by sacrificing. From eating out less to buying fewer clothes to cutting back on vacations, saving through sacrificing can be effective, but painful. So if you are looking for ways of saving money, why not start with money saving tips that are relatively pain free ?

With a little immagination, you’ll find plenty of ways to reduce spending without making big changes to your lifestyle. And to get you started, here are eight painless ways to save money.

1. Get healthy: As someone who has struggled to stay fit, I realised that eating healthy and staying in shape is easier said than done. But for those who are in good shape, you can save a lot of money on life insurance and individual health insurance plans. And as an added bonus, you’ll feel better and have more energy.

2. Rethink auto insurance: Every year, re-examine your auto insurance policy for savings opportunities. For example, consider raising your deductible, which lowers premiums. For older vehicles, evaluate whether you really need collision coverage, which covers damage to your car when your car hits or is hit by another vehicle or object. And make it a habit to compare auto insurance quotes annually, which can be done online in minutes.

3. Improve your credit score: Of all the painless ways to save money, improving your credit score is arguably the most important. From home loans and car loans, to credit cards and auto insurance, a good credit score can save you a small fortune. Over a lifetime, the savings can easily reach tens of thousands of dollars.

4. Invest on the cheap: Whether you are a passive investor who sticks with mutual funds or an active stock and options trader, there are easy ways to save money. For mutual fund investors, stick with funds that have low expense ratios. My rule of thumb is to keep the weighted average expense ratios. My rule of thumb is to keep the weighted average expense ratio for all mutual funds under 50 basis points (0.50 percent). As compared to funds that charge well over 1 percent in fees annually, the savings over a lifetime of investing can be substanital. And for active traders, stick with discount brokers that charge $10 per trade or less.

5. Think triple play: One of the biggest monthly expenses for some is the cost of internet service, cable and phone. The major of providers today offer discounts when you bundle all three of these services together. Called a triple play, you not only save money, but you also get the convenience of a single bill each month.

6. Go prepaid with your cell phone: While this option won’t be right for everybody, many can save a small fortune with prepaid cell phones. You can find prepaid cell phone plans that charge just $0.10 a minute. And because they are prepaid, you don’t have to commit a long-term contracts.

7. Shop online: There are several benefits to shopping online, convenience being chief among them. But shopping online can also save big money. Many retailers offer special discounts to online shoppers. And virtually every company that sells products or services online offers promo codes, discounts or coupons. Particularly if you have a big purchase planned, make sure to search the internet for deals before buying.

8. Get cash back: If you have good credit, there are a number of cash back credit cards that pay up to 5 percent on purchases. The key is to use the card for monthly bills and everyday expenses, not to charge things you don’t need. Put monthly bills that accept credit cards on automatic payment, and use the card for everyday purchases such as groceries and gas. And as an extra precaution against overspending, pay the credit card bill in full several times throughout the month. It’s easy to do online, and it prevents any surprises at the end of the month.

Author : Dough Roller

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Loan available till age 70 but there are other criteria

Posted by admin
on December 23, 2010

The Straits Times Thursday, December 23, 2010 (Forum)

We appreciate the feedback from Mr Fong Cheng Cheong (“Aged over 60? Sorry, no loan for you”; last Thursday).

We would like to highlight that the bank reviews a number of criteria prior to approving unsecured cash loans or credit cards.

The qualifying age for POSB Loan Assist is between 21 and 70 years old. Other criteria would include meeting the minimum income requirements, and holding Singapore citzenship or permanent resident status.

In addition, all applications are processed in accordance with our business and credit evaluation policies that determine if the loan is approved or declined.


Ooi Huey Tyng (Ms)

Senior Vice-President & Head

Unsecured Lending & Cards

Consumer Banking Group

(Singapore) DBS Bank

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Don’t Be Chained to Loan Woes

Posted by admin
on September 9, 2010

Excessive borrowing can lead to financial trouble.

Consumers need to ensure that loans taken are well within their means. Here are eight things to consider when taking out a loan.

  1. A need or want?Before taking a loan, ask yourself if the item or service is meant to satisfy a need or a want.If it is a “want” – not necessary and just for consumption – perhaps it would be better to save for it rather than to pay a “premium” price (that is, the interest cost of borrowing). For instance, don’t borrow to pay for a vacation or a new kitchen appliance or get a new air-conditioningTake time to consider if there is an alternative to borrowing now or borrow a smaller amount instead. Better still, don’t buy it at all if it is unnecessary.

    However, if the purchase is for investment purposes, then perhaps it is okay to get a loan. This could b for renovations that add value to your home, or enhancing your future income earning ability via training and education or for business.

  2. Interest cost of borrowingConsumers should be aware of the type of interest rate that is stated in the loan agreement or marking material.And when considering loan options, compare like with like.Some loans use the annual percentage rate (APR), which reflects the actual interest cost of borrowing, while others refer to the simple interest rate.

    The simple interest rate is calculated by applying a flat rate on the original principal amount for the entire loan tenure.

    The APR is interest calculated based on the declining principal balance over the tenure of the loan.

    As the borrower makes monthly repayments, the principal is reduced every month, so the interest payable on the principal also reduces each month.

    Make sure you pay off the debt before the interest starts to build-up. If you miss a payment, you may be automatically bumped up to the highest annual interest rate.

  3. Current debt service ratioBefore taking the loan, calculate your debt service ratio. It is the percentage of your monthly income needed to service long-term liabilities.It provides a useful guide to how much of your take-home pay – that is gross pay less 20 per cent employee CPF contribution and personal income taxes – is used to pay debts.Debt payments are monthly expenses like mortgage, car loans, personal loans or even credit card debts. A healthy debt servicing ratio – debt dvided by income – should be 35 per cent or less.

    To put it another way, out of very $1,000 of after-tax and CPF income, you should spend $350 or less on debt repayments.

    If the consumer already has a high amount of outstanding debt to service, it is best to pay down existing debt first before incurring more.

    And even if your debt service ratio is less than 35 per cent, it is prudent to consider if you have surplus funds to take on another loan repayment after paying monthly living expenses.

    Make sure you know your cash inflow and outflow before taking on another loan.

  4. Loan tenureIt is worth considering the optimal loan tenure as it affects monthly repayments and interest paid.Generally a longer loan tenure means smaller monthly repayments but a shorter loan tenure may lead to lower interest paid.So to minimise the interest payable, a shorter loan tenure may be an option, but the repayment will be higher.

    Some financial experts suggest you make the highest repayments you can manage so that you clear the debt in the shortest possible time.

    When deciding on a loan tenure, consider your monthly commitments and take the appropriate loan tenure based on your monthly cash flow.

  5. Early payment optionsNot all loans allow customers to settle early, so read and understand the terms and conditions of the loan before signing up.An early settlement fee is usually imposed if a loan is paid off early.If you redeem your personal loan before the full term expires, an early redemption fee of 3 to 5 per cent of the outstanding amount at the time will apply.

    Home loan customers are urged to look beyond interest rates and consider factors such as the lock-in period and penalty fees.

    Another potential cost is the loan cancellation fee.

  6. Late payment feesMost loans stipulate late payment fees. These are over and above the interest charged for late payment, so go through the terms and conditions of loan agreements thoroughly to ensure you understand them clearlyPay special attention to fees incurred for late payment.So keep track of the payment dates and remember to pay before the due date. Try to have a fewer loans or credit facilities and avoid having multiple sources of credit.

    In order not to incur interest and penalty fees, pay your outstanding credit in full.

  7. Payment flexibilityAvoid defaulting on loan repayments as it will hurt your credit history. However, a typical loan tenure is for at last 6 months, and sometimes it is hard to predict what will happen so far into the future.You might hit cash flow difficulties at some point, so it is worth looking for loans that offer some payment flexibility and provide rewards for prompt payment.For those who can’t meet their monthly payments, they approach their lender first for assistance to restructure a loan. Quick Credit will usually review such requests on a case by case basis. A responsible lender will work with its customers to provide a solution.
  8. Other loan terms and conditionsMake sure you understand the key fees and charges stipulated by a loan agreement. This makes you aware of what to expect when a loan is taken and reduces any surprises after it has commenced.If you are acting as a guarantor for a loan, be clear about the terms and conditions of the agreement, especially those related to your obligations as a guarantor.In the eyes of the creditor, the guarantor is the “same” as the borrower, meaning, both the borrower and the guarantor are jointly and severely liable for the loan.

    This means that even if you are willing to act as a guarantor, you should also consider your own ability to make repayments in case the principal borrower fails to repay.

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