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TODAY MONDAY 17 MARCH 2014

Take control of your nances

Consolidating your credit facilities into one package with low interest rates is your rst step towards improving your nancial health
Low interest rates over the past 10 years have made bank loans more accessible to Singaporeans, and this has contributed to rising household debt. According to the Department of Statistics of the Ministry of Trade and Industry, household debt here has risen from 64 per cent of gross domestic product in 2007 to 77 per cent last year. While home loans account for about three quarters of this total, many Singaporeans are also applying for personal loans to pay for other expenses, such as a holiday or a home renovation. It has also become easier to borrow money in Singapore. According to a TODAY report, there are more than 200 licensed moneylenders here, up from 173 in 2008.
DONT FALL BEHINd YOUR PAYMENTS

EVeRYONe CAN Be FINANCIALLY SAVVY

The POSB Loan Assist Difference

Sam has a S$4,000 credit card debt that he intends to pay in instalments. This table shows you the amount he saves if he pays using POSB Loan Assist+ compared to any credit card.

TIPS FOR MANAGING YOUR dEBT

Draw up a monthly budget that shows your monthly income and your monthly expenses. Reduce spending on luxury items such as holidays. According to MoneySENSE, a national nancial education programme, do not allow your monthly debt commitments to exceed 35 per cent of your gross monthly income. Pay every instalment promptly and in full to avoid interest and penalty charges. Increase your regular repayments or make lump sum repayments if you have extra funds. Pay off the debt with the highest interest charge rst.

Tenure
Applied Interest Rate (% per annum)

1 year 6.18% 19.03% S$367 S$4,407 24% S$4,960

3 years 5.88% 13.71% S$135 S$4,866 24% S$6,880

5 years 5.68% 12.09% S$88 S$5,296 24% S$8,800

POSB Loan Assist

Effective Interest Rate* (% per annum) Monthly Repayment Total Repayment

Any CreditCard

Effective Interest Rate (% per annum) Total Repayment

Total Savings

S$553

S$2,014

S$3,504

+Terms and conditions apply. For details, please visit www.posb.com.sg/personal/loans/loanassist. *Effective Interest Rate for POSB Loan Assist includes 3% processing fee and 1% insurance fee.

These numbers are meant for illustrative purposes only and should not be taken to be a guarantee of the actual, future or likely gures. For POSB Loan Assist, it is assumed that prompt payment of full monthly instalment amount is made throughout the tenure. For Any Credit Card, it is assumed that no additional expenses are charged to the credit card and the outstanding amount is only paid at end of the tenure with no other fees/charges applied.

If you have too many debts, you run the risk of falling behind on your payments. If you have multiple sources of credit for example, an overdraft facility and several credit cards it may be difficult to keep track of how much interest you are paying and when your payments are due. Falling behind on your repayments may result in your credit report being adversely affected. This report is used by banks to decide if they should lend you money, and the amount of

money to lend. You can request a copy of your credit report from the Credit Bureau website, at the Credit Bureau office, at CrimsonLogic Service Bureaus, at the CASE office, or at SingPost branches. A transaction fee of S$6 applies. If your credit report shows that you have plenty of defaults or late payments, this may reduce your chances of getting a loan in the future. You could even be required to pay a higher interest rate. Whats more, your work prospects may be affected as some employers conduct checks to ensure that you have a good credit rating. Beyond affecting your credit rating, the strain of having to pay off too much debt can take a mental and emotional

toll on you and your family. You may become stressed and anxious, and may even be tempted to borrow money from loved ones. For counselling services, please call the credit counselling hotline at 1800 2255 277.
PUT YOUR LOANS IN ONE BASKET

One of the ways to take charge of your debt might be to consolidate or renance all your debt into one package that offers a lower interest rate. You will save on interest payments and you need to focus only on one loan. Before committing to a package though, do remember to check the terms and conditions that apply, as well as related fees and charges.

One of the ways to take charge of your debt might be to consolidate or refinance all your debt into into one package that offers a lower interest rate.

When picking a loan package, be aware of the difference between advertised and effective interest rates. The effective interest rate can be calculated by including any upfront fees that may be applicable. Compare the effective interest rate for each package to find out which one is the most affordable. An example of a personal loan that can help you take control of your finances is POSB Loan Assist, which offers a low fixed interest rate and up to four times your monthly income. You can repay the loan over fixed monthly instalments with a choice of tenure of between one and five years. You do not need a guarantor or collateral to apply for the loan. Such products can help you reduce the amount of debt and get you back on the road towards good financial health.
This is the 15th stor y in a 19-part collaboration between TODAY and POSB.

A convenient option that reduces interest payments

From POSB EXperT ANTHONY SeOW Head of Cards and Unsecured Loans

WHAT ARE THE BENEFITS OF POSB LOAN ASSIST?

W i t h P O S B L o a n A s s i s t +, borrowers dont have to worry about varying interest rates. Your interest rate is fixed across the tenure of your loan and you can choose to take between one and ve years to repay your loan. The monthly xed instalments and wide range of loan tenures make it easier for borrowers to manage their nances each month. To m a k e r e p a y m e n t s a s convenient as possible, your

monthly instalments will be deducted from your chosen POSB Savings/ Current account automatically. This means that you wont have to fret about missing a payment date, especially if you have a busy schedule. And if you choose to take up a loan tenure of at least three years, the bank will waive your last instalment if you make prompt repayments every month.
WHAT IF I AM UNABLE TO SERVIcE MY LOAN BEcAUSE OF UNFORESEEN cIRcUMSTANcES?

repayments, your loved ones will not be burdened with the debt. With just one per cent of the approved loan amount, POSB Loan Assist comes with a personal loan life insurance^ that can help you take care of your payments should the unforeseen occur.
HOw dO I QUALIFY FOR POSB LOAN ASSIST?

CONVENIENT AccESS TO cASH

If your POSB Loan Assist application is approved, the approved amount of money will be credited into your chosen POSB account. And since the bank has more than 900 ATMs across the island, you will be able to access your funds anytime you need.

Life is full of uncertainties, and if you nd yourself in a situation perhaps due to a permanent disability where you are unable to keep up with your

To qualify for POSB Loan Assist, S i n g ap or e a n s a nd p er m a n ent residents must earn a minimum gross annual income of S$20,000. With POSB Loan Assist, you can also get cash of up to four times your monthly salary. To qualify, you must reside in Singapore and be between the ages of 21 and 65. If you earn more

With POSB Loan Assist, borrowers dont have to worry about varying interest rates.
Anthony Seow
Head OF Cards and UnseCUred LOans

than S$120,000, you can obtain a loan amount that is even higher than four times your monthly salary.
+Terms and conditions apply. For details, please visit www.posb.com.sg/personal/ loans/loanassist. ^Personal loan life insurance is underwritten by Aviva Ltd.