Good Loan Repayment Habits

woman with good loan repayment habits uses her credit card

Most Singaporeans would have taken out a loan at some point of time in their life. It could be a huge renovation loan, a hefty mortgage loan, a student loan taken up for your further studies, or a personal loan. There is always the mental stress of knowing that you have to fork a huge amount of money for the next few years just trying to pay off your loans. It can be depressing knowing that you will be in debt for some time.

Below are some simple techniques that can be applied to help lighten your debt load. If these techniques are applied accordingly, your total interest paid over the years will be minimised drastically, and you will be debt-free faster.

Draw up a budget plan

List down your monthly income and expenses and analyse which expenses are not crucial, then try to trim them down. Cut down on indulgences like eating at expensive restaurants if you are not able to pay your loans on time. This method will assist you in repaying your loans quicker as your priorities have been set out right from the start of your loan repayment plan.

Review all your outstanding loans

Avoid taking loans from too many sources as it only makes matters more complex and as a result, you end up overstretching yourself in the long run. Try to consolidate all your loans as it is easier to track them if you have fewer credit facilities.

Pay your loans on time

Avoid incurring additional penalty charges on default payments. If you have a problem repaying your loan, talk to your moneylender so that you can work out a revised repayment plan instead of recurring late payment charges now and then.

Prioritise your loan repayments

Plan to pay off your loan with the highest interest rate first so that you will have more savings in the long run. You may follow these steps until all loans have been cleared:

  • A) List down all your loans by interest rates
  • B) Pay in full the loan with the highest interest rate
  • C) If you are unable to pay the loan in full for some reason, pay it off in installments. Save as much money as possible and pay the loan off till it is paid in full.
  • D) Repeat steps A to C for all other loans till they have all been cleared.

Make additional payments during the year

You may make additional payments towards your loan as and when you have extra funds available subject to your lender’s approval (for instance when you receive your mid-year bonus, profit-sharing, or even year-end bonuses – all these lump-sum payments can help reduce your interest amount tremendously and moving forward you only have to work towards paying off the principal sum.

Tax deduction methods

Pay fortnightly instead of monthly
This is another way to shorten the loan tenure. Instead of making monthly payments for your loan, try paying fortnightly instead. You will be surprised at the results. Your compound interest will be reduced over some time, and this in turn will shorten your loan repayment period. Discuss with your lender if they are keen on this arrangement.


This is one of the most popular and effective methods for paying off your debts. Securing a debt consolidation loan from an authorised money lender can help you pay off all your outstanding loans, thus improving your credibility. It is also more cost-effective than having a credit card which charges a 25 percent interest per financial year. Imagine if you have multiple credit cards, how much interest will you be paying to the banks? Taking a loan from an authorised money lender is the most cost-effective choice. The faster you pay off your loans, the more savings you will enjoy in the long run. Your emotional and mental health will also improve as you will be stress-free with most of your loans being paid off on time.

In summary, it is quite easy to obtain a loan from an authorised money lender in Singapore but keeping up-to-date with the repayment schedule can be challenging. Explore your options of consolidating your debts with any authorised moneylender in Singapore today to lessen your financial and mental burden. However, remember not to default on any payments to avoid penalties.

Call Soon Seng Credit today for a personal discussion for all your loan needs today. We offer low-interest rates and flexible repayment schemes catered for all your personal and financial needs.

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