Professional Life Guide: Managing Your Finances

Debt is a fact of life worldwide. In the U.S., personal loans increased by 11.7 percent from 2020 to 2022. This year, unsecured personal loans of U.S. consumers have a total balance of $177.9 billion, with an average balance of $9,896 per loan.

In the U.K., credit card borrowing as of February 2022 was at £1.5 billion. That was the highest level since credit card lending records began in 1993. It showed an increase of 9.4 percent from February 2021, a five-year record for annual increases. Credit card borrowing is expected to continue to increase as the cost of living continues to rise.

In Singapore, 10 percent of the population own six or more credit cards, 56 percent own more than one, and 74 percent own at least one. Most credit card holders, 88 percent, make timely payments on their outstanding amounts. However, nine percent only make partial payments, and three percent pay only the minimum amount. These minority holders can be at risk of accumulating debt quickly.

How Debt Mismanagement Can Affect Your Professional Life

Professionals must realize that debt management is critical to their professional life. Mismanaged debt can lead to many problems, including the following.

Poor Credit Rating

Missed or late payments can damage your credit score, making it difficult to get loans, mortgages, and other forms of financing in the future. It can also lead to higher interest rates on those products.

Difficulty Finding a Job

Many employers now check credit scores as part of the hiring process. If your score is low, you may have difficulty finding a job, especially in certain industries.

Loss of Professional License

In some professions, such as financial services, a poor credit score can lead to the loss of your professional license. This can ruin your career and make it difficult to find new employment.

Higher Insurance Premiums

Your insurance premiums may be higher if you have a poor credit score. This is because insurers consider you to be a higher-risk customer.

Debt Consolidation

If you currently have high-interest debts from multiple lenders, you can benefit from a Singapore debt consolidation loan. This unifies all your debts into one loan with a lower interest rate, saving you money on interest payments and helping you get out of debt faster. It is also easier to keep track of your payments since you are only dealing with one creditor.

There are two ways to consolidate your debt: through a personal loan or a credit card.

Woman cutting credit cards

If you choose a personal loan, the lender will pay off your existing debts and issue you a new loan with a lower interest rate. You will then make monthly payments to the lender until the loan is paid off.

If you choose a credit card, the issuer will pay off your existing debts and give you a new card with a lower interest rate. You will then make monthly payments to the issuer until the debt is paid off.

To qualify for a debt consolidation loan, you need good credit history and sufficient income to afford the monthly payments. You can get a personal loan from a bank or online lender or a credit card from a credit union or issuer.

Before applying for any type of debt consolidation loan, be sure to compare interest rates and terms from different lenders. That way, you can find the best deal for your needs.

Mortgage Refinancing

If you have equity in your home, you may be able to refinance your mortgage and use the extra cash to pay off other debts. By doing this, you can reduce your interest costs and accelerate your debt repayment.

You must have equity in your house and solid credit history to be eligible for mortgage refinancing. Through your existing lender or a new one, you can submit an application for refinancing.

Before submitting an application for a mortgage refinance, be careful to examine the interest rates and terms offered by several lenders. You may then choose the offer that best suits your requirements.

Home Equity Loan

You may be able to take out a home equity loan if you have equity in your home and use the funds to pay off other debts. This can help you eliminate debt quickly.

You need to have an excellent credit history and adequate income to cover the monthly payments to be approved for a home equity loan. A bank or internet lender may provide the loan.

Compare interest rates and conditions from many lenders before applying for any kind of home equity loan.

Manage Your Debts Successfully

Managing your debts can be a difficult task, but it is important to do so if you want to maintain a good credit rating and keep your professional life intact. This article has outlined several ways that you can consolidate your debt and reduce your monthly payments. It has also provided information on how to get a debt consolidation loan. If you are struggling with high-interest debts, now is the time to take action to get out of debt quickly.

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