Nearly three-quarters of Singaporeans own a credit card. While the majority of Singaporeans are capable of paying off their credit card debts on time, there’s still about 12% of them who are struggling to pay on time and are desperately trying to find ways on how they can pay off or reduce their credit card debts to avoid incurring compounding and/or high credit card interest rates, penalty charges, and bad credit score.
Here are some interesting credit card statistics in Singapore, according to YouGov’s data:
If you are among the 12% who are looking for ways to settle or reduce their credit card debts and happen to own a car, the good news is there’s one smart way to clear your credit card debts: Cash-Out Car Refinancing.
A cash-out refinance of your car loan is one way to convert your car’s equity into cash.
To put it simply, your current car loan will be paid off and you’ll have to replace it with a new car loan, borrowing more than what you currently owe (or based on your car’s market value) and then cash out the difference. You may then use the difference or the extra cash that you’ll get to settle and pay off your credit card debts.
In addition to getting cash to pay off high-interest credit card debts, you may also qualify for a much lower interest rate, reduced monthly repayments, and a loan stretch or extension.
The amount of extra cash that you can borrow depends on factors such as:
If the extra cash that you’ll be getting is based on your car’s market value, let’s say $50,000, and your remaining balance from your car loan is $22,000 – you may be able to refinance your car loan for up to $45,000 and take the $23,000 difference in cash. The cash that you will receive will be in a lump sum, hence, this will help you quickly pay off or reduce your credit card debts and even support you on your other needs and expenses.
It really depends on the borrower’s financial capabilities. The interest rate of a personal loan may vary depending on the type of lender (private money lenders and banks). For banks, the interest rate range for personal loans is 3.4% – 5.43% with a loan tenure range option of 1-5 years. For private money lenders, the interest rest range is 1%-18% with a loan tenure range option of 1-3 years.
As for car refinancing, the interest rate ranges from 1.68%-2.78% with a loan tenure range option of 1-7 years. In addition, you may also be qualified to do a cash-out based on your car’s equity.
If you suddenly need cash for an emergency or perhaps to pay some time-sensitive bills or high-interest debts (most especially credit card debts), cash-out car refinancing can help you get what you need without resorting to other high-interest personal loans.
If your current interest rate is too high, you might be qualified to get a better interest rate. Depending on how much you’re taking out in cash and your total car loan amount, a lower rate could reduce the overall cost of the car loan.
Depending on some eligibility criteria, you can potentially reduce your monthly payment by extending your loan beyond your current repayment term.
With the largest network of banks, financial institutions, and insurance partners, Speed Credit has been offering tailored car financing and car insurance solutions for all types of car owners in Singapore.
Having over 50 years of combined industry experience, Speed Credit has underwritten more than 1.7 billion car loans and has served more than fifty-five thousand car owners in Singapore.
We have always been committed to offering the lowest car interest rates, with the most flexible and comprehensive financing packages as we want to ensure that all our customers get the most value for their car and loan.