The economy is composed of many different parts, and they all work together as a complex economic machine to drive prices, income, and many other things. Being in the know can be a daunting task, but it’s useful. In particular, economic knowledge helps borrowers in deciding if they should take out a loan from a money lender Singapore now or later.
Here are four things influenced by the economy that will help you decide if it’s the right time to borrow money or not.
Interest rates
Interest rates on loans and other credit products are largely influenced by the economy. In fact, the MAS (Monetary Authority of Singapore) adjusts interest rates based on movements in the global economy. With that, it pays to be economically informed as a Borrowers.
If inflation is high, interest rates tend to increase as well. This is also true in times of economic uncertainty. But if inflation is low and economic prospects are good, interest rates would tend to go down.
Inflation
Inflation affects both income and expenses. With high inflation, prices go up and you have less spending power. But when inflation is low, you can buy more things with the money you earn.
Also, as mentioned, interest rates are largely affected by inflation. The higher inflation is, the higher interest rates tend to get. With that, you can say that the cost of borrowing money also increases along with prices of many things when inflation is high. In turn, it becomes harder to take out loans during periods of high inflation.
Government aid
Life can get really tough and stressful during economic downturns. Thankfully, the Singapore Government makes several financial aid programs available during these times of need.
For instance, the Assurance Package (AP) Cash aims to help Singapore citizens aged 21 and above with cash grants from $700 to $2,250. The program started in 2022 and will end in 2026, and the cash grant will be given over that five-year period. If you are eligible, the cash grant you get will depend on your income and the value of properties you own.
You can also find other sources of Government support through the SupportGoWhere website. Through this, you can find out what financial aid schemes are available and which ones you qualify for. You can access financial assistance for housing, education, family needs, and others through SupportGoWhere.
Career stability
In economically troubled times, job prospects are affected. Even the security of the career you have may be put on the line. During an economic downturn, you may unexpectedly lose your job, and thus, your main source of income.
In turn, losing your main source of income can make loan repayments a lot more challenging. With that, if you are informed about the state of the economy, you can make better decisions whether to take out loans or not. You can better plan your financial prospects as well.
Conclusion
Knowledge of the Borrowers economy is quite helpful in deciding whether the time is right to borrow money or not. It’s wise to be informed about inflation, interest rates, career prospects, and government aid to help you make a wise choice.
