Cash loans have played an integral role in the development and progress of most economies, even before the start of a global monetary system. It has since transformed to take varied forms, subdivided by certain financial factors that are important to understand and consider before we begin comparing cash loans in Singapore and, consider applying for any fast cash loans in Singapore.
Thousands of years ago, farmers used to borrow seeds to grow plants and pay them back at a later date. As one plant can produce hundreds of seeds, the farmer would then be able to return the initial seed along with another one which can be considered as the ‘interest’. That way, the farmer had access to abundant seeds and at the same time, he would’ve cleared his loan obligation. Since then, we have seen this model being adopted by most economies to a point where fast cash loans in Singapore are seen as a crucial driver of our society. Today, we have mainly two types of fast cash loans to understand, in order to ensure the wellbeing of our personal finance.
The first type of loan that we should be well aware of would be unsecured loans. These short term cash loans include personal loans, balance transfers, and even credit cards. An unsecured loan is a loan that does not require collateral to be pledged. Instead, most financial institutions provide a personal, short term cash loan solely based on the creditworthiness of the individual applying. If we look at the generation before us, we will notice that most of them have a different viewpoint in regards to borrowing. It’s important to also understand the reason behind it. Many individuals do not see a need to borrow money and incur interest costs, just to return it at a later time. Also, excessive borrowing may lead to some undesirable outcomes such as increasing debt obligation and even bankruptcy.
However, there are some interesting exceptions to consider, which may allow you to make more money while being indebted. Back to the story of the farmer, if we all can derive a method to make the loan generate more money than the interest payable for the micro loan taken, then it only makes sense to take a loan in order to pay for a a type of valuable asset, which may be generating greater profits for us in the long run. One such example is the loan we take to buy a house or stocks. The house or stock may be sold at a higher price in the future, hence, borrowers would’ve been able to cover the cost of interest payments along with the fees charged for the loan. Therefore, it’s key to look at each individual situation and assess the need for micro loans applications accordingly. This is to properly evaluate and calculate each of the micro loans interest rates in Singapore, and their worthiness to ensure the best dollar value obtained.
That brings us to the other type of loan that has been accepted and integrated into the global economic structure. These are known as secured loans. Secured loans have collateral that we can pledge against the loan. In that way, if the borrowers default on their payments, the lenders can take over the possession of items pledged. We see this frequently in the real estate and housing market. This type of loan is usually given with the possibility of acquiring larger sums of money due to its economic nature of being less risky. This is because the chances of defaulting on such loans are significantly lower due to the borrower’s fear of losing the item pledged against the loan. Nonetheless, it’s always important to practice responsible borrowing and not to borrow beyond our means.
Globalisation and rampant technological improvements have allowed individuals these days, to get a loan for almost anything and everything. The number of investors and traders who buy stocks or engage in intraday trading these days, do so mostly on margin, which is another form of using borrowed funds to make a fortune in the financial markets. Due to the availability and frequency of such loans and their trading nature, we are seeing a large number of defaults on short term cash loans or micro loans in Singapore which, indefinitely leads to bad debts in our society. This poses risks, not just, to our personal finance, but, also significantly impairs the progress and growth of our economic system.
In conclusion, it would always be a wise choice to pay off debts that we can, in order to lower our total interests incurred, but, in rare cases, owning a debt or loan may be the solution that we are looking out for. What’s certain is that we will witness greater evolution of the types of loans and their roles within our financial infrastructure. We should not be complacent in terms of our financial obligations and whenever in doubt, we can seek sound financial advice from financial institutions or even our neighbourhood money lenders and always apply the ‘right’ methodology to seek financial freedom especially in a financially straining capitalistic society.
