Good vs Bad Debt & just how to Prioritise Which Loans to pay for in Singapore

Good vs Bad Debt & just how to Prioritise Which Loans to pay for in Singapore

Growing up, we had been probably taught that debt is a bad thing, something to prevent no matter what.

But you more nuanced than that. We have been “borrowing” each time we swipe/tap our charge cards; plus in Singapore, you almost certainly can’t purchase a property or an automobile in cold cash that is hard unless you’re filthy rich.

Therefore financial obligation just isn’t wicked in and of itself. While all financial obligation should be paid down at one point or any other, the thing is to prioritise paying down bad debt over good debt.

We educate you on how exactly to simply take a bird eye’s view of most your loans and exactly how to determine which to cover down first. Here you will find the most typical kinds of financial obligation in Singapore therefore the interest that is approximate charged.

Kinds of loans in Singapore and their attention prices

Type of loan rate of interest EIR
Borrowing from household perhaps 0% perhaps 0%
0% charge card installments 0%
mortgage loan 1.93% to 2.88%
Education loan 2.5% to 5.93per cent
company loan 2.55% to 8% 5% to 13%
auto loan 2.78% to 3% 5% to 6%
Renovation loan 2.88% to 5.8per cent
personal bank loan from bank 3% to 6.5% 5.7% to 14.7percent
education loan 4.5% to 5.39%
bank card 25% to 30% Crazy high

Generally speaking, you’d would you like to spend those debts off through the greatest rate of interest towards the cheapest. Continue reading “Good vs Bad Debt & just how to Prioritise Which Loans to pay for in Singapore”