Money Talks Podcast: A guide to taking on loans in Singapore
Take loans for immediate, necessary expenses like a car or property loan, rather than for speculative reasons or anticipated needs, advises our guest.
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From home renovation to purchasing a car and buying a house, what types of loans are available in Singapore and what should you look out for?
Head of retail at GXS Bank Jenn Ong explains how to find the correct loan for your needs.Â

Andrea Heng, host:Â
When do I know that taking a loan is a good versus a bad idea? Â
Jenn Ong, head of retail at GXS Bank:Â
Well, so you think about the opportunity cost. Â
I'll give you an example, a broken kitchen sink, you need to fix it. Now, are you saying that, "Oh, I don't have the money, I don't have the means, therefore I'm going to live with a broken sink?" No. Â
So you have to take a loan because the other alternative is just not possible. So there are areas for you to think about. When is a good time to take a loan? Â
Like I said, taking a loan, on the surface, sounds like a taboo, but if you think about it, everybody takes a housing loan.
Andrea:
It's almost necessary. Â
Jenn:
Correct. People take car loans. So these are all utilitarian needs that you have, and then you need to take a loan. Â
So I always tell people, if you need to take a loan, be careful. What is the cost of servicing the loan? That's where you need to remember. If taking a loan is something that you have to do, then make sure that you can afford it. Â
One of the biggest things to think about when taking a loan is the ability to pay back. If I take a loan and don't pay back, I'll be in trouble.
Now, I can take a loan and stretch it too short, I will not have the ability to pay back because my disposable income cannot meet that monthly repayment. Â
So you have to calculate your income. You need to calculate what is available after you put aside for all the necessities. Then check out what is the repayment capability. If you want to pay off in 12 months, make sure you can. Â
If you can't, you may have to stretch it a little bit more to 18 months, but then it makes your monthly servicing a little bit more sustainable.Â