How to find the best personal loan without damaging your credit rating

A personal loan can help you amass funds that you would require to pay for pressing expenses. However, if you have a poor credit score, you are likely to find it very difficult to get a personal loan approved. A bad credit rating will spoil your chances of acquiring a personal loan. A poor credit score or a poor credit history indicates your failure to pay back your loan amounts. Hence, if you are finding it difficult to get a personal loan approved, you should improve your credit history first.

Often we make the error of assuming that specific factors affect our credit rating when they have no impact. Factors such as your debit card usage, marital status and age have no role in determining your credit score. Other details such as your employment status, bank balance and income have no direct impact on your score, though it might influence your approval.

You will have to give individual attention to the factors that are likely to impact your credit score and the chances of getting a personal loan. Simply getting an appropriate personal loan is not sufficient as you also must have a decent credit rating to benefit from it. If you are looking for a personal loan by taking on a trial-and-error method it will be destructive and fruitless.

Let us look at some tips you can follow to find a personal loan without hurting your credit score:

Pay your dues on time

Even if you fail to pay your credit card bills and other dues on time, try to pay it within a month of the due date. Making payments within 30 days past the due date is accepted normally. By doing so, you can opt for the personal loan of your liking, without worrying about getting rejected. It will also have a positive influence on your credit score.

Avoid applying for personal loans from different lenders

If you are applying for multiple personal loans at the same time, your credit rating is likely to take a hit. This indicates your lack of confidence in obtaining a loan and which will reflect badly on your credit rating. Instead of applying for personal loans from multiple lenders, you must check the prospective rate of interest and eligibility by using a Personal Loan Eligibility Calculator.

Get a quote from the lender of your choice

If you apply for a personal loan formally, the lender will carry out a credit check. It is likely to leave a negative score on your rating. If this takes place often, your score will go down drastically. So, find out if you are eligible for a loan before applying by talking to the moneylender in person and going through the eligibility criteria.

Compare the fees charged by different lenders

Many banks offer low-interest rates but charge substantial supplementary fees. These include high prepayment penalties, excessive processing fees, arbitrary upkeep charges and more. These charges are likely to raise your burden and may lead you to miss a monthly instalment that may eventually damage your credit rating. So before applying, compare the charges and fees imposed on personal loans.

Seek help from non-banking financial institutions

Your chances of getting a loan will enhance significantly if you widen your pool of options. Apart from banks, approach non-banking financial institutions. These institutions are listed with Monetary Authority of Singapore and offer a wide range of loans. Like banks, these institutions also depend on your credit score and history to evaluate your risk as a debtor. However, these institutions may have different packages for different risk appetites.

Your credit score is the most significant financial tool to get the best personal loan. If you have the right credit score, you will easily get the approval for loans at the best available interest rates. As a result, it is very important that you make sure your lender offers you competitive interest rates and simple personal loan eligibility calculator together with other sufrepplementary benefits.

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4 Ways to maximize returns in crowdfunding

Peer-to-Peer(P2P) Lending, or debt crowdfunding, has grown tremendously since the concept originated in 2005 with Zopa in UK. In 2016 alone, P2P lending has generated more than $300 billion worth of investment opportunities worldwide. The concept helps the underserved or underbanked individuals and businesses access alternate sources of funding from investors who lend and earn passive income in the form of interest.

Southeast Asia is an emerging P2P lending market with a huge financial gap faced by SMEs. In the last 3 years, P2P lending has financed thousands of small businesses to support their growth, while offering investors an alternative investment opportunity. In Southeast Asia, one of the leading platforms, Funding Societies has funded more than S$120 million across Singapore, Indonesia and Malaysia. At the same time, they have given more than 45,000 investors access to this alternate investment class with net annualised returns of up to 14% in short tenor loans.

This article aims to highlight 4 important considerations to maximize your returns in P2P lending with examples of initiatives taken by Funding Societies:

  1. Choose your platform wisely

When investing, you want to choose a platform with decent track record and achievements. These are things to look out for in a good platform:

a. The platform has good risk management practices

Review the platform’s risk management – including filtering out bad quality loans, pricing returns as per the risk, and managing non-repayment and defaults. While most platforms do not publish their proprietary methodologies, their processes should be robust enough to identify potentially bad loans. A good indicator is the platform’s default rates. Funding Societies has a default rate of 1.3% (as of 7 March 2018), one of the lowest in the region.

To illustrate, here is an example of the impact of a low default rate:

Assuming gross annual yield of 12%, platform fee of 2% and default rate of 3% (on the higher side) one can make 7% in returns.

This of course is not assured but depends on many factors including platform’s risk management as mentioned above.

In the inevitable event of a late payment or default, it is essential for the platform to have a process to manage collections or exercise legal action. You should enquire the platform on its processes to have a better understanding and clearer expectations.

b. Skin in the game

Find out if the platform has YOUR interests aligned with theirs, and what’s in it for them to ensure that investors’ money is handled properly and the investment opportunities/loans are of good quality.

Firstly, the platform should know how to handle your money. Funding Societies is the first P2P financing platform in Singapore to engage an independent escrow agent to handle investors’ funds, keeping its operating funds separate from investors’ funds. This gives investors peace of mind knowing that their money is safeguarded by the escrow agent and will not be utilized for anything besides their investments.

Secondly, is the platform as invested as you are? The management at Funding Societies has a ‘skin in the game’ by investing in every single loan, and will do their best to maximize the returns and manage any negative impacts.

c. It cares about YOUR Experience!

Debatable – but a good platform should be all-encompassing in its experience, right? This should start from the platform, mobile app (convenient for you), and customer experience. More importantly, it should be responsive and helpful when you need to speak to someone.

  1. Understand macroeconomic conditions

Knowing the pulse of the economy will help you when you select the loans to invest in. This includes updates for each sector and government initiatives to boost SMEs and specific sectors.

Coupled with the factsheets provided by P2P lending platforms that state the company’s operational and financial health, you will gain a wider perspective of the economy and SMEs you are funding.

  1. Diversify your investments within the platform

As the saying goes, “Don’t put all your eggs in one basket”, the same goes for investing in P2P lending. Diversifying across many loans has its advantages specifically in spreading the risk across many loans and helping to minimise the impact of non-performing loans.

Funding Societies endeavours to provide ample opportunities to diversify your investments:

  • I. Participate in multiple loans with small amount (at times as low as $50)
  • II. Consider spreading the weightage of your investments in terms of loan amounts
  • III. You have the option to choose the industries to invest in.
  • IV. Funding Societies currently provides Business Term Loans and Invoice Financing for investment. You can consider both products when investing.

Using the Auto-Invest feature simplifies your road to diversification. All you have to do is set your criteria based on product, industry, tenor, rate of returns and industry. When an investment opportunity matches your criteria, you will be allocated the investment based on the auto allocation algorithm.

  1. Re-invest for compounding effect

When investing in P2P lending, repayments are made on a monthly basis (30,60,90 days in case of invoice financing), and you can decide, based on your risk appetite, whether to reinvest the repaid funds and thereby compound the returns.

Southeast Asia’s leading crowdfunding platform, Funding Societies, currently operates in Singapore, Indonesia and Malaysia. With more than 45,000 investors and being the only P2P lending platform to win the MAS FinTech Award (SME category, 2016), Funding Societies has also attained global recognition, being recognised amongst the Top 250 FinTech companies globally by CB Insights and winning the Best in Customer Experience for Alternative Financial Services by Retail Banker International.

Want to start investing in P2P lending? Sign up with Funding Societies today!

Disclaimers:

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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Smart Ways To Spend Your S$2 At Daiso

#1: KITCHEN CLIPS

All of us want to maintain the freshness of food. Personally, I do not want to eat chips that lost its crunchiness. To protect your leftover food, you may seal them with Daiso’s Kitchen Clips.

#2: MAGTOOLS JAR OPENERS

When was the last time you asked someone for help to open a stubborn jar or water bottle? This experience happens frequently to me. To make my life easier, I considered buying a lid opener. Daiso houses a specific brand for its jar openers – the Magtools. This tool does not require having powerful muscles!

Image Credits: amazon.com

#3: HEAT PACKS

Nothing screams value for your money louder than Daiso’s compressed heat packs for S$2. From adjusting your temperature in cold countries to aiding in your sick child’s fever, heat packs have many uses. It works in a matter of minutes!

#4: JAPANESE CANDIES

My fondness for Japanese candies started last Christmas. I was gifted a bag filled with Japanese candies including the brand Hi-Chew. Popular locally and internationally, Hi-Chew is a soft fruity candy that you can eat during your commute. Parents may also use it as a reward for a well-behaved child.Paying S$2 is not a huge price to pay for its multiple uses.

Image Credits: hi-chew.com

#5: BATHROOM LAUNDRY HOOKS

For students who reside in dormitories, you put laundry hooks inside your bathroom to save some space. You can hung your delicate (or costly) items inside your house without having to worry about it. Besides, it only costs S$2!

#6: EGG TIMER 

As soon as my beloved co-worker arrives, she sets her alarm to six minutes and boils her two eggs. It takes 6 minutes to reach the consistency that she desires. I am planning to purchase Daiso’s adorable egg timer to help her eat perfect hard-boiled in the mornings.

Image Credits: imgur.com

#7: ERASERS

I noticed that Japanese erasers are well-made. In Daiso, look for the Mono and Matomaru erasers and skip on the adorable shapes (e.g., sushi and dog erasers). The latter may look cute but, it does not provide the best performance.

Sources: 1, 2 & 3

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Clever Tips To Save Money On Your Mobile Bills

If one of your resolutions in 2018 is to reduce your expenses, a good place to start would be your monthly mobile bill. Do not underestimate the few dollars saved each month as they can add up to a significant amount at the end of the year.

Here are some clever tips to save money on your mobile bills!

Monitor Your Usage

The first step to reducing your mobile bill is to monitor your mobile usage. How much data, talktime and messaging do you use each month? Track your usage easily with your telco’s mobile app. For instance, M1 customers can download and use My M1 App to track their local or roaming data, talktime and message usage anytime, anywhere. If you are always exceeding your data, perhaps you can consider data add-ons, or switch to a mobile plan with bigger data bundles to reap plenty of savings in the long run.

If constant monitoring is too much of a hassle for you, opt-in for SMS notifications to be alerted when you are about to exceed your data bundle. M1, for example, sends you SMSes when you have reached 75%, 90% and 100% of your monthly data bundle.

Consider SIM-Only Plans

If you do not require a new phone, it’s time to consider SIM-only plans. These plans, as compared to conventional smartphone plans, come with lower subscription and bigger data bundles. M1’s SIM-only entry plan only costs S$20 per month for 5GB data, as compared to an equivalent smartphone plan at S$40 per month. By going with a SIM-only plan, you get to save S$240 over a year!

If you are hungry for more data, go for M1’s Unlimited SIM-only plan, which comes with unlimited data, talktime and messaging at only S$98 per month.

Save As A Family

Telco operators allow customers to maximize their mobile plan usage by sharing data, talktime and messaging bundles with their loved ones. For example, subscribers of M1’s mySIM plans can add up to 2 supplementary plans at S$12/month each to co-share the main plan’s bundles. Such supplementary plans will suit family members with various data consumption behaviour.  For instance, the millennial in the family may be a heavy user of social media and is therefore likely to use more data. Meanwhile, the stay-at-home mum may only require little amounts of data to stay connected via instant messaging platforms. By co-sharing the main plan’s bundle, this helps to consume pockets of data that would otherwise be left unutilized by the end of the month.

As such, if you have multiple devices in the family, this option of adding supplementary plans may work well for you too. When you share the big data bundles on mySIM plans between the devices, you’ll be able to gain access to all the entertainment you need!

Get Cash Rebate On Your Mobile Bills

Finally, the last step to saving on mobile bills is to get cash rebates on them! By using cashback credit cards to pay for your mobile bills, you can earn cashback or reward points that help to reduce your mobile bill. For instance, the Citi M1 Credit Card provides up to 10% Citi rebate if you set up recurring M1 bills via GIRO. Furthermore, charging your purchases at M1 stores earn 1% Citi Rebate.

Follow these handy tips to start saving money on your mobile bills in 2018!

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4 Must-Have Items For A University Freshman

Going to university is a monumental step in a young adult’s life. The transition from your earlier years to university is not something to take likely as a student of life. Building a freshman’s arsenal goes beyond stocking up on pens, markers, and notebooks. You need to be prepared for the challenges ahead!

I understand the financial constraints of a student but, that does not mean that you cannot have nice and sturdy things. Buying less items of quality is better than purchasing more school supplies for less. May this list help you with your journey as a freshman.

#1: A HEAVY-DUTY LAPTOP

As I was contemplating on the essential products necessary to make a freshman’s life easier, the “laptops” instantly popped into my head. A laptop acts as a weapon to combat sleepless nights spent on take-home tasks, group projects, and research papers. Laptop has been a vital part in our generation’s education that many scholarships or grants include allowance for gadgets.

As modern technology advances each year, you may want to consider investing on a hybrid. A hybrid device combines the portability of a tablet and the functionality of a laptop. Popular hybrid models include the Microsoft Surface Pro and the Lenovo Yoga.

Image Credits: pixabay.com

The specifications of the laptop that you must buy depends on your undergraduate major. If you are majoring in computer science or graphics design, strong RAM and GPU are parts of your criteria. As a Psychology student and a freelance writer, my MacBook Pro stood the test of time. Many of my previous classmates relied heavily on this product too. I would not trade it for any hybrids just yet!

#2: A PRESENTATION OUTFIT

In the span of your undergraduate studies, you will be subjected to several presentations such as the thesis proposal. Aim to look your best to provide a positive mark! I can still recall the day when I presented my final thesis to a panel of lecturers. My classmate told me that my “beautiful dress” saved me. He may be joking but, I dressed well for the part. I chose a black cocktail dress, which I felt comfortable and confident in.

Investing on some wardrobe staples such as quality heels or leather shoes and black blazers can give you an advantage. You may also opt for flats to avoid horrible blisters after your career fair. Invest in clothing articles that you are willing to wear or stand in for a long period of time.

#3: A SET OF COMFORTABLE SHOES

Walking, without a doubt, is the best way to go around any campus. With countless hours spent roaming in the halls of your university, it is vital to equip yourself with comfortable shoes. Accomplish a considerable amount of steps in your cheap sandals (without any sole support) is not going to help you! You need to switch to sneakers or flats with thicker soles.

Keep the elements of versatility and comfort in mind when purchasing your school shoes. A family relative of mine swears by the Skechers’ slip on. While, I personally prefer the classic Birkenstock as my school and work shoes. For a trendy student, a white Superga 2750 may pass your taste.

#4: A DURABLE BACKPACK

What is the one item that students often overlook yet overuse? The backpack, of course! The backpack serves a significant role in a student’s life. It is arguably the most versatile part of the university student’s arsenal as it houses important items such as laptops and books. It can transform from an everyday wear to a getaway wear. For its functionality, you must not settle for a flimsy and cheap one.

Image Credits: pixabay.com

I cannot stress how some university students live completely out of their backpacks. Thus, you must stay on the safe side by purchasing trusted brands such as the JanSport or by purchasing bags built for hiking. Bags like these are spacious and have various pockets to carry all of your essentials at once.

 

Article Resources: 1  & 2

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