Planning a baby: Should I take a personal loan to cover the costs?
Becoming a parent is one of life’s most rewarding experiences, but it’s no secret that it’s expensive. Most couples aim to be as financially stable as possible before starting (or growing) a family in Singapore, and rightly so: money trouble is the last thing you need when raising a little one.
Some of the costs of preparing for and raising a child are more obvious than others. For example, it’s likely you’ve already thought about the essentials you’ll need to start buying such as diapers, clothing and feeding supplies, as well as a crib or bassinet. But you’ll also need to tally up the totals for the numerous scans and check-ups you need to get during the pregnancy, not to mention the medical costs of caring for your baby once they are born. Once you add a stroller, carrier, car seat and all the other equipment you’ll need, the budget can start looking a little tight and you’d be forgiven for wondering where the money is going to come from.
None of this should deter you from what is one of life’s most precious gifts, because it’s worth every cent to hold your baby for the first time and watch them take their first steps. That said, it’s important to be financially prepared so you can raise a happy and healthy family with full peace of mind.
Should I adjust my spending or take out a personal loan?
First and foremost, you need to set aside time to assess your current financial position and consider all the possible costs you’ll face by having a baby. Compare these costs with your monthly expenditure – will you be able to comfortably pay for everything with cash to spare for emergencies, or does it look like you’ll need to cut your spending just to make ends meet? Unless you have a high salary and plenty of savings set aside, you may end up closer to the latter.
If the budget is looking tight, one option is to start making some sacrifices. Consider what you can do to cut your spending, from eating out less to fewer purchases of non-essential clothes. Sometimes, however, small sacrifices like these may not be enough to ensure you can comfortably prepare for your child’s birth and care for them as they grow. In this case, a personal loan may be an option to consider to help you clear the financial hurdles coming your way.
The benefits of taking out a personal loan
There are several benefits to taking out a personal loan when starting a family:
1. Fixed repayments:
Before applying for a loan, you’ll be able to see exactly how much you need to repay each month and how long it will take to clear the debt. This makes it easier to budget and stay consistent with your monthly spending, especially considering the potential for large upfront costs during and after your pregnancy.
2. Potential for low interest rates: While interest rates on personal loans aren’t always as low as secured loans (such as a mortgage, where the loan is backed by collateral), they are often highly competitive and can drop even further when offered as part of a promotion. Since this is essentially the cost of borrowing the money you need, snagging a low interest rate can give you plenty of breathing room.
All banks and many other licensed financial institutions in Singapore offer a variety of personal loans, and the eligibility criteria is often easier to meet than it is for many other types of loans.
4. Flexibility: Personal loans can be spent how you like, freeing you from the restrictions associated with loans geared towards a specific purpose.
If you’re thinking of starting a family and feel it’s worth exploring the possibility of a personal loan, CompareSing is the perfect place to start. Our quick online tool makes it easy to compare personal loans offered in Singapore at no cost to you, giving you a clear idea of the products available to you along with information on loan amounts, interest rates, terms, eligibility criteria and more.