1 00:00:03,019 --> 00:00:05,250 Speaker 1: You're listening to a CNA podcast. 2 00:00:07,980 --> 00:00:11,260 Speaker 2: Welcome to CNA's Money Talks podcast. I'm Andrea Heng. Thank 3 00:00:11,260 --> 00:00:12,939 Speaker 2: you for joining me. Now, we tend to have a 4 00:00:12,939 --> 00:00:16,350 Speaker 2: lot of milestones in life, big events, right? Marriage, a 5 00:00:16,350 --> 00:00:20,299 Speaker 2: new home, further studies. You need funds for these, and 6 00:00:20,299 --> 00:00:24,700 Speaker 2: we may not always have the money for these occasions, right? Now, 7 00:00:24,739 --> 00:00:26,739 Speaker 2: we want to talk about loans because these are the 8 00:00:26,739 --> 00:00:29,340 Speaker 2: things that will help you get that money. And before 9 00:00:29,340 --> 00:00:31,170 Speaker 2: you take up a loan, there are quite a number 10 00:00:31,170 --> 00:00:33,250 Speaker 2: of things that we need to consider. 11 00:00:33,650 --> 00:00:37,909 Speaker 2: And it's overwhelming, especially if this is your first one. 12 00:00:38,069 --> 00:00:41,098 Speaker 2: So let's enlist the help of our Money Talk's guest today. 13 00:00:41,389 --> 00:00:45,549 Speaker 2: She is Jen Ong, head of retail at GXS Bank. Jen, 14 00:00:45,830 --> 00:00:47,799 Speaker 2: good to have you with us. Thank you for having us. 15 00:00:48,029 --> 00:00:50,709 Speaker 2: Very excited to talk about this because I've made many 16 00:00:50,709 --> 00:00:52,909 Speaker 2: mistakes when it comes to loans. So this is a 17 00:00:52,909 --> 00:00:55,150 Speaker 2: good one. We all have to take up loans, right? 18 00:00:55,549 --> 00:00:58,130 Speaker 2: So what are the key items in a person's life 19 00:00:58,130 --> 00:01:01,450 Speaker 2: cycle when a loan is a must have and a 20 00:01:01,450 --> 00:01:05,870 Speaker 2: nice to have? Good question. So when it comes to borrowing, 21 00:01:05,970 --> 00:01:08,529 Speaker 2: you started by saying that there are different milestones in 22 00:01:08,529 --> 00:01:11,419 Speaker 2: someone's life, and I think one of the biggest ones 23 00:01:11,419 --> 00:01:14,809 Speaker 2: that we have seen is renovation, right? If you talk 24 00:01:14,809 --> 00:01:17,488 Speaker 2: about marriage loan or wedding loan, yes, you see people 25 00:01:17,489 --> 00:01:20,169 Speaker 2: taking it, but most of the use cases that we 26 00:01:20,169 --> 00:01:21,628 Speaker 2: see are renovation loans because 27 00:01:21,709 --> 00:01:25,190 Speaker 2: Renovation can get big. You need someone to make sure 28 00:01:25,190 --> 00:01:27,669 Speaker 2: that you have enough money to see yourself through. Now 29 00:01:27,669 --> 00:01:30,269 Speaker 2: when we think about loans, there's always this taboo about 30 00:01:30,269 --> 00:01:33,819 Speaker 2: taking loans. Taking loans is sometimes you do need it. 31 00:01:34,150 --> 00:01:36,819 Speaker 2: So putting the taboo aside, now you think about loans, 32 00:01:36,830 --> 00:01:38,589 Speaker 2: you would think about interest rate. I think a lot 33 00:01:38,589 --> 00:01:40,510 Speaker 2: of consumers out there saying, um, which one gives me 34 00:01:40,510 --> 00:01:42,589 Speaker 2: the best interest rate and they make a decision based 35 00:01:42,589 --> 00:01:45,269 Speaker 2: on that. That is not wrong. But then you need 36 00:01:45,269 --> 00:01:47,790 Speaker 2: to go into the nitty gritty. You need to understand. 37 00:01:47,900 --> 00:01:50,360 Speaker 2: Is there any fees if I pay off early? Uh, 38 00:01:50,489 --> 00:01:53,410 Speaker 2: how is the interest calculated? See that's a big topic, right? 39 00:01:53,489 --> 00:01:56,730 Speaker 2: How is interest calculated? Everybody tell you interest is interest, 40 00:01:56,769 --> 00:02:00,050 Speaker 2: but no, if your interest is monthly rest or daily rest, 41 00:02:00,169 --> 00:02:02,610 Speaker 2: it becomes a different cost for the consumers. So what 42 00:02:02,610 --> 00:02:05,410 Speaker 2: are the TNCs? So if let's say I have more 43 00:02:05,410 --> 00:02:07,250 Speaker 2: money this time around, I want to pay off a 44 00:02:07,250 --> 00:02:10,320 Speaker 2: little bit earlier, will I be penalized? If you look 45 00:02:10,320 --> 00:02:12,250 Speaker 2: at what is happening in the market, there are fees 46 00:02:12,250 --> 00:02:13,970 Speaker 2: like this. Yes, so fees. 47 00:02:14,119 --> 00:02:17,110 Speaker 2: You will be penalized if you pay early. Then that 48 00:02:17,110 --> 00:02:18,910 Speaker 2: goes against the grain of taking a loan and being 49 00:02:18,910 --> 00:02:21,229 Speaker 2: careful because if you have money to pay off a loan, 50 00:02:21,270 --> 00:02:23,270 Speaker 2: you want to pay off a loan without penalty. So 51 00:02:23,270 --> 00:02:25,589 Speaker 2: that's why you have to check the TNCs, know what 52 00:02:25,589 --> 00:02:28,710 Speaker 2: you're getting into. OK, we will get into the nitty gritty, 53 00:02:28,750 --> 00:02:32,300 Speaker 2: but just want to tackle the philosophical side of things first. 54 00:02:32,788 --> 00:02:35,990 Speaker 2: How do I know what's a reasonable expense to take 55 00:02:35,990 --> 00:02:38,880 Speaker 2: up a loan for? So you mentioned things like wedding loans, 56 00:02:39,029 --> 00:02:40,190 Speaker 2: rental loans, these are the more. 57 00:02:40,570 --> 00:02:43,440 Speaker 2: ones. When do I know that taking a loan is 58 00:02:43,440 --> 00:02:46,169 Speaker 2: a good versus a bad idea? Well, so you think 59 00:02:46,169 --> 00:02:48,809 Speaker 2: about the opportunity cost then, right? So if let's say 60 00:02:48,809 --> 00:02:52,210 Speaker 2: I'll give you an example, broken kitchen sink, you need 61 00:02:52,210 --> 00:02:54,580 Speaker 2: to fix it. Now, are you saying that, oh, I 62 00:02:54,580 --> 00:02:56,169 Speaker 2: don't have the money, I don't have the means, therefore 63 00:02:56,169 --> 00:02:58,369 Speaker 2: I'm going to live with a broken sink? No. So 64 00:02:58,369 --> 00:03:01,008 Speaker 2: you have to take a loan because the other alternative 65 00:03:01,008 --> 00:03:04,008 Speaker 2: is just not possible. So that there are areas you 66 00:03:04,008 --> 00:03:06,009 Speaker 2: to think about when is a good time to take 67 00:03:06,008 --> 00:03:06,448 Speaker 2: a loan. 68 00:03:06,839 --> 00:03:09,359 Speaker 2: Like I said, taking a loan is on the surface 69 00:03:09,360 --> 00:03:11,160 Speaker 2: sounds like a taboo, but if you think about it, 70 00:03:11,320 --> 00:03:12,119 Speaker 2: housing loan. 71 00:03:12,350 --> 00:03:16,500 Speaker 2: Yeah, everybody takes a housing loan. It's almost necessary. So 72 00:03:16,500 --> 00:03:18,529 Speaker 2: the housing loan is there. Car loan, people take a 73 00:03:18,529 --> 00:03:21,300 Speaker 2: car loan. So these are all utilitarian needs that you 74 00:03:21,300 --> 00:03:23,220 Speaker 2: have and then you need to take a loan. So 75 00:03:23,220 --> 00:03:25,059 Speaker 2: to me, I've always tell people if you need to 76 00:03:25,059 --> 00:03:27,138 Speaker 2: take a loan, be careful what is the cost of 77 00:03:27,139 --> 00:03:30,179 Speaker 2: servicing the loan. That's where you need to remember. Taking 78 00:03:30,179 --> 00:03:32,100 Speaker 2: a loan is something that is is something that you 79 00:03:32,100 --> 00:03:34,460 Speaker 2: have to do, then make sure that you can afford it. 80 00:03:34,699 --> 00:03:36,809 Speaker 2: One of the biggest thing to think about when taking 81 00:03:36,809 --> 00:03:38,000 Speaker 2: a loan is the ability 82 00:03:38,182 --> 00:03:40,242 Speaker 2: to pay back. That's right, right? So I can take 83 00:03:40,242 --> 00:03:41,811 Speaker 2: a loan and don't pay back and then I'll be 84 00:03:41,811 --> 00:03:44,401 Speaker 2: in trouble. I can take a loan and stretch it 85 00:03:44,401 --> 00:03:47,162 Speaker 2: too short. I will not have the ability to pay 86 00:03:47,162 --> 00:03:50,751 Speaker 2: back because my disposable income cannot meet that monthly repayment. 87 00:03:50,972 --> 00:03:54,162 Speaker 2: So you have to calculate your income, you need to 88 00:03:54,162 --> 00:03:57,341 Speaker 2: calculate what is available after you put aside for all 89 00:03:57,341 --> 00:04:00,962 Speaker 2: the necessities, then check out what is a repayment capability. 90 00:04:01,522 --> 00:04:02,921 Speaker 2: If you want to pay off in 12 months, make 91 00:04:02,921 --> 00:04:03,701 Speaker 2: sure you can. If you 92 00:04:03,753 --> 00:04:05,384 Speaker 2: you may have to stretch it a little bit more 93 00:04:05,384 --> 00:04:08,184 Speaker 2: to 18 months, but then it makes your monthly servicing 94 00:04:08,184 --> 00:04:11,854 Speaker 2: a little bit more sustainable. Now, when I'm shopping around 95 00:04:11,854 --> 00:04:14,514 Speaker 2: for a loan, how do I make comparisons? What are 96 00:04:14,514 --> 00:04:17,984 Speaker 2: the top three things, say, that I need to compare 97 00:04:17,984 --> 00:04:20,444 Speaker 2: in order to decide what's the best kind of loan 98 00:04:20,444 --> 00:04:23,063 Speaker 2: that works for me? Yeah. So the first thing you 99 00:04:23,063 --> 00:04:25,584 Speaker 2: want to look at is the interest rate. Now, we 100 00:04:25,584 --> 00:04:29,403 Speaker 2: talk about interest rate, um, you need to know whether 101 00:04:29,455 --> 00:04:31,765 Speaker 2: It is like I mentioned, a monthly rest or a 102 00:04:31,765 --> 00:04:35,816 Speaker 2: daily rest. What's a rest? The way interest is calculated, right? 103 00:04:35,925 --> 00:04:38,305 Speaker 2: So if let's say when we talk about monthly rest 104 00:04:38,305 --> 00:04:42,846 Speaker 2: is let's say your outstanding amount is $10,000 right? And 105 00:04:43,085 --> 00:04:46,365 Speaker 2: I made an early repayment of $7000 so my calculation 106 00:04:46,365 --> 00:04:48,966 Speaker 2: should be based on the difference of $3000. But if 107 00:04:48,966 --> 00:04:51,045 Speaker 2: you're on a monthly rest, it doesn't happen. They would 108 00:04:51,045 --> 00:04:53,246 Speaker 2: just look at what is your previous month and interest 109 00:04:53,246 --> 00:04:55,005 Speaker 2: is calculated. So it's a bit different. 110 00:04:55,339 --> 00:04:57,669 Speaker 2: The other one will be fees, right? Yeah, so you 111 00:04:57,670 --> 00:05:00,140 Speaker 2: want to know is there a processing fee? So usually 112 00:05:00,140 --> 00:05:03,040 Speaker 2: you will hear very low interest, but then there's processing 113 00:05:03,040 --> 00:05:05,789 Speaker 2: fee and then you'll hear there's a penalty fee. So 114 00:05:05,790 --> 00:05:07,910 Speaker 2: those are the things that you as a consumer, you 115 00:05:07,910 --> 00:05:10,709 Speaker 2: need to take a look. I'm just curious, Jen, is 116 00:05:10,709 --> 00:05:14,500 Speaker 2: there a loan that has no penalty for paying early? 117 00:05:14,709 --> 00:05:16,470 Speaker 2: Because I've taken up a loan before and I had 118 00:05:16,470 --> 00:05:18,549 Speaker 2: the same mindset as everyone else. I want to pay 119 00:05:18,549 --> 00:05:20,669 Speaker 2: it off early so that it's not a burden on 120 00:05:20,670 --> 00:05:23,390 Speaker 2: my shoulders, not hanging around in my head all the time. 121 00:05:23,869 --> 00:05:27,079 Speaker 2: But then there's a penalty that you have to pay 122 00:05:27,079 --> 00:05:29,928 Speaker 2: because you're paying early. I don't understand that. Can you 123 00:05:29,928 --> 00:05:33,320 Speaker 2: explain this to me? I think it is the cost 124 00:05:33,320 --> 00:05:36,540 Speaker 2: of money. Money comes at a cost, whether you're a borrower, 125 00:05:36,730 --> 00:05:39,529 Speaker 2: whether you're a lender, right? I think there is a 126 00:05:39,529 --> 00:05:42,130 Speaker 2: penalty fee because that money is set aside for for 127 00:05:42,130 --> 00:05:44,890 Speaker 2: consumers to use it, so there is a timeline to 128 00:05:44,890 --> 00:05:45,690 Speaker 2: it that this person. 129 00:05:46,160 --> 00:05:48,640 Speaker 2: needs it for 12 months, so I can't use that 130 00:05:48,640 --> 00:05:51,190 Speaker 2: money for something else because I'm lending it to this person. 131 00:05:51,559 --> 00:05:55,690 Speaker 2: So in most financial, so there's this penalty, right? So, 132 00:05:55,839 --> 00:05:57,959 Speaker 2: so if you return it to me, what am I 133 00:05:57,959 --> 00:06:00,149 Speaker 2: going to do with it? So there's a penalty. Now 134 00:06:00,149 --> 00:06:02,640 Speaker 2: back to your question, is there a loan that has 135 00:06:02,640 --> 00:06:06,000 Speaker 2: no penalty fee? Yes. Oh, OK. Flexi loan has no 136 00:06:06,000 --> 00:06:07,809 Speaker 2: penalty fee. OK. 137 00:06:08,130 --> 00:06:11,299 Speaker 2: Why is that? That is because when we designed the product, 138 00:06:11,630 --> 00:06:16,029 Speaker 2: we took into account consumer's lifestyle. Now I am a 139 00:06:16,029 --> 00:06:19,380 Speaker 2: bank employee, but I'm a consumer myself. I have gone 140 00:06:19,380 --> 00:06:22,269 Speaker 2: through different stages where I needed a loan. So I've 141 00:06:22,269 --> 00:06:24,429 Speaker 2: been through that and I understand that now if we 142 00:06:24,428 --> 00:06:27,269 Speaker 2: really want to serve the consumers, then take away the 143 00:06:27,269 --> 00:06:30,269 Speaker 2: unnecessary stuff. But won't that come at a cost to 144 00:06:30,570 --> 00:06:33,659 Speaker 2: A vendor like GXS Bank, so that's a good question, right? 145 00:06:33,779 --> 00:06:36,299 Speaker 2: So we're not saying that we are doing our charity, 146 00:06:36,339 --> 00:06:38,459 Speaker 2: we are saying that we may earn less, but we 147 00:06:38,459 --> 00:06:40,700 Speaker 2: have customer loyalty. I will have to say that's quite 148 00:06:40,700 --> 00:06:42,940 Speaker 2: a big gamble. I will have to say it's a 149 00:06:42,940 --> 00:06:46,260 Speaker 2: big gamble. The thing is, not everyone can take up 150 00:06:46,260 --> 00:06:46,899 Speaker 2: a loan, right? 151 00:06:47,070 --> 00:06:51,329 Speaker 2: It depends on various, I suppose, factors on the applicants part. 152 00:06:51,540 --> 00:06:53,880 Speaker 2: I understand banks actually take a look at your credit 153 00:06:53,880 --> 00:06:56,700 Speaker 2: score and I know from personal experience that you don't 154 00:06:56,700 --> 00:06:59,940 Speaker 2: have credit, it's not necessarily a good thing. So why 155 00:06:59,940 --> 00:07:02,899 Speaker 2: does our credit score matter so much when applying for 156 00:07:02,899 --> 00:07:07,459 Speaker 2: a loan? Because that's the only way for organizations to 157 00:07:07,459 --> 00:07:12,140 Speaker 2: determine payment capabilities. It's very easy to lend money. 158 00:07:12,450 --> 00:07:14,450 Speaker 2: But you want to make sure that the person you 159 00:07:14,450 --> 00:07:16,529 Speaker 2: lend money to is able to pay you back, right? 160 00:07:16,609 --> 00:07:18,640 Speaker 2: It works both ways, right? It's good for the consumers. 161 00:07:18,890 --> 00:07:21,130 Speaker 2: I think fundamentally a lot of consumers out there. 162 00:07:21,950 --> 00:07:25,179 Speaker 2: Do not put a lot of thinking into credit bureau score. 163 00:07:25,309 --> 00:07:27,750 Speaker 2: They don't know that it is. It's only when you're 164 00:07:27,750 --> 00:07:29,790 Speaker 2: applying for a loan and then when they talk to 165 00:07:29,790 --> 00:07:31,910 Speaker 2: the officer, then you realize there's something called a credit 166 00:07:31,910 --> 00:07:35,510 Speaker 2: bureau score. So we want to educate consumers to say 167 00:07:35,510 --> 00:07:38,190 Speaker 2: that right now I mean we are young at 2025, 168 00:07:38,269 --> 00:07:40,750 Speaker 2: you go take a credit card, forget to pay a bill, 169 00:07:40,829 --> 00:07:43,029 Speaker 2: you would think nothing of it. But if you continue 170 00:07:43,029 --> 00:07:44,989 Speaker 2: to forget to pay a bill, 10 years later when 171 00:07:44,989 --> 00:07:48,100 Speaker 2: you want a housing loan, your credit score is pretty 172 00:07:48,100 --> 00:07:50,309 Speaker 2: ugly and that's where the challenge is, right? 173 00:07:50,388 --> 00:07:52,458 Speaker 2: Yeah. So for us, I think it's important for consumers 174 00:07:52,458 --> 00:07:56,097 Speaker 2: out there, it's important to cultivate good payment behavior. So 175 00:07:56,097 --> 00:07:58,058 Speaker 2: so so at GXS, if we give you a loan, 176 00:07:58,067 --> 00:07:59,697 Speaker 2: we will also nudge you to pay your loan and 177 00:07:59,697 --> 00:08:01,907 Speaker 2: we will tell you, hey, do not forget, hey, do 178 00:08:01,907 --> 00:08:04,018 Speaker 2: you know that if you don't do it correctly, you 179 00:08:04,018 --> 00:08:06,268 Speaker 2: may have to have a poor credit score 3 years 180 00:08:06,268 --> 00:08:08,708 Speaker 2: down the track. And that's I think what we also 181 00:08:08,708 --> 00:08:12,328 Speaker 2: tend to forget is the repercussions like you said, later on, 182 00:08:12,497 --> 00:08:14,097 Speaker 2: you may forget it now and you may think nothing 183 00:08:14,097 --> 00:08:16,247 Speaker 2: of it now and then when you pay it off, 184 00:08:16,338 --> 00:08:19,298 Speaker 2: it's fine. I've paid it off, whatever, but people often forget. 185 00:08:19,376 --> 00:08:22,485 Speaker 2: that there are long term repercussions to that. Thanks for 186 00:08:22,485 --> 00:08:25,286 Speaker 2: the reminder. Now, what do we need to think about 187 00:08:25,286 --> 00:08:28,885 Speaker 2: when we have to take on multiple loans at a time? 188 00:08:29,126 --> 00:08:31,976 Speaker 2: So I'm thinking a study loan at the same time 189 00:08:31,976 --> 00:08:34,046 Speaker 2: as a mortgage, and I've been through that before. I 190 00:08:34,046 --> 00:08:37,085 Speaker 2: had to pay off a mortgage while studying the renovation 191 00:08:37,085 --> 00:08:39,885 Speaker 2: loan as well. It was very painful. 3 bills in 192 00:08:39,885 --> 00:08:42,406 Speaker 2: a row. So what do we need to think about here? 193 00:08:42,515 --> 00:08:46,085 Speaker 2: I think the most important thing is the ability to 194 00:08:46,085 --> 00:08:48,245 Speaker 2: repay your loan on a monthly basis. 195 00:08:48,364 --> 00:08:52,213 Speaker 2: So calculate what is known as your debt servicing ratio. Yes, 196 00:08:52,393 --> 00:08:56,114 Speaker 2: just calculate it, right? If you earn $1 and if 197 00:08:56,114 --> 00:08:58,693 Speaker 2: you need $10 to pay off, do you have enough 198 00:08:58,693 --> 00:09:00,754 Speaker 2: money to eat and sleep and you know, buy your 199 00:09:00,754 --> 00:09:04,703 Speaker 2: groceries calculation you need to be able to sleep at night. 200 00:09:05,573 --> 00:09:08,153 Speaker 2: So I think that's where you have to think about 201 00:09:08,153 --> 00:09:11,164 Speaker 2: ability to pay. Now if you are really stuck, then 202 00:09:11,164 --> 00:09:13,823 Speaker 2: maybe prioritize. What is more important? I mean to my 203 00:09:13,833 --> 00:09:16,573 Speaker 2: my housing loan is important, student loan is important. Rena 204 00:09:16,573 --> 00:09:17,193 Speaker 2: maybe push it out. 205 00:09:17,381 --> 00:09:20,981 Speaker 2: 6 months, but really think about your financial health before 206 00:09:20,981 --> 00:09:23,421 Speaker 2: you overleverage. So I think what you're trying to say 207 00:09:23,421 --> 00:09:26,822 Speaker 2: here is, think about it from a budgeting perspective, right? 208 00:09:27,062 --> 00:09:30,442 Speaker 2: Really sit down, draw your budget, see what you are 209 00:09:30,442 --> 00:09:33,821 Speaker 2: left with after all your regular expenses and look at 210 00:09:33,822 --> 00:09:35,942 Speaker 2: that final figure and say, hey, can I manage this 211 00:09:35,942 --> 00:09:39,252 Speaker 2: every month or not? OK, and there are solutions to 212 00:09:39,562 --> 00:09:43,541 Speaker 2: mitigate any of this if we feel like we can't 213 00:09:43,541 --> 00:09:46,261 Speaker 2: pay a certain loan by a certain time. 214 00:09:46,580 --> 00:09:48,728 Speaker 2: Yeah, so you're saying that I take it that you 215 00:09:48,729 --> 00:09:51,770 Speaker 2: are a person has already taken a loan and now 216 00:09:51,770 --> 00:09:53,289 Speaker 2: has a problem to say that, you know what, I 217 00:09:53,289 --> 00:09:56,070 Speaker 2: took a loan, I can't. Yeah, so there's always you 218 00:09:56,070 --> 00:09:59,010 Speaker 2: can always restructure your loan. Yes, you can always restructures 219 00:09:59,010 --> 00:10:02,169 Speaker 2: are open to that, right? OK, let's talk about interest rates. 220 00:10:02,294 --> 00:10:05,484 Speaker 2: Something that is on everyone's minds ever since the pandemic 221 00:10:05,484 --> 00:10:08,044 Speaker 2: and now it's a big deal because everyone's watching what's 222 00:10:08,044 --> 00:10:10,684 Speaker 2: happening in the US. We are also watching what's happening 223 00:10:10,684 --> 00:10:13,924 Speaker 2: in Singapore as well. Some people choose to max out 224 00:10:13,924 --> 00:10:18,445 Speaker 2: their loans because the interest is lower in time and 225 00:10:18,445 --> 00:10:21,525 Speaker 2: then they can use whatever cash extra that they have 226 00:10:21,525 --> 00:10:25,424 Speaker 2: to invest on other things which give them higher returns. 227 00:10:25,484 --> 00:10:28,924 Speaker 2: Is this necessarily advisable in your opinion? 228 00:10:29,539 --> 00:10:33,289 Speaker 2: It really depends on the returns that you expect to get, right? 229 00:10:33,380 --> 00:10:35,799 Speaker 2: Is it short term or long term? Now no matter 230 00:10:35,799 --> 00:10:38,159 Speaker 2: how you cut it, when you look at it alone 231 00:10:38,159 --> 00:10:40,239 Speaker 2: and say that the interest rate is low, you have 232 00:10:40,239 --> 00:10:42,210 Speaker 2: to understand the interest rate is low because I'm taking 233 00:10:42,210 --> 00:10:44,000 Speaker 2: a short term loan, or am I taking a long 234 00:10:44,000 --> 00:10:44,450 Speaker 2: term loan? 235 00:10:44,599 --> 00:10:47,358 Speaker 2: Right? So if it's a long term loan, it adds up. 236 00:10:47,750 --> 00:10:50,429 Speaker 2: But investment, if you're using it to really the market 237 00:10:50,429 --> 00:10:53,869 Speaker 2: rally and you really want to be opportunistic. To my mind, 238 00:10:53,909 --> 00:10:56,789 Speaker 2: those are short term. So don't get locked in. So 239 00:10:56,789 --> 00:10:58,909 Speaker 2: like I said, take a loan, lock in where there's 240 00:10:58,909 --> 00:10:59,590 Speaker 2: a penalty. 241 00:11:00,049 --> 00:11:02,210 Speaker 2: You make something on the side and you think that 242 00:11:02,210 --> 00:11:03,929 Speaker 2: you have made money. Then when you want to pay 243 00:11:03,929 --> 00:11:06,080 Speaker 2: off the loan, you realize that oops, there is a penalty, 244 00:11:06,289 --> 00:11:09,130 Speaker 2: then it just negates the whole proposition that you have 245 00:11:09,130 --> 00:11:11,689 Speaker 2: in mind. So I think it's very important to look 246 00:11:11,690 --> 00:11:14,210 Speaker 2: at it. If I'm borrowing short term really, indeed, is 247 00:11:14,210 --> 00:11:16,890 Speaker 2: it really short? The customers just need to understand what's 248 00:11:16,890 --> 00:11:19,409 Speaker 2: the outlay. Yeah, OK. I think that's a very good 249 00:11:19,409 --> 00:11:21,329 Speaker 2: piece of advice there. Uh, I want to stay on 250 00:11:21,330 --> 00:11:22,840 Speaker 2: this topic a little bit longer. 251 00:11:23,244 --> 00:11:25,824 Speaker 2: Interest rates have come down, lots of people are starting 252 00:11:25,825 --> 00:11:29,364 Speaker 2: to review their mortgages. Is it easy to get a 253 00:11:29,364 --> 00:11:32,233 Speaker 2: refinance on all kinds of loans? I mean, what are 254 00:11:32,234 --> 00:11:33,955 Speaker 2: the things that we need to look out for? I 255 00:11:33,955 --> 00:11:37,674 Speaker 2: think if it comes to refinancing, your mortgage is the 256 00:11:37,674 --> 00:11:40,025 Speaker 2: one that you can get it pretty easily. I mean, 257 00:11:40,155 --> 00:11:42,794 Speaker 2: to be fair, mortgage is a long term loan, 25 258 00:11:42,794 --> 00:11:46,434 Speaker 2: to 30 years, right? It might even outlast some marriages. 259 00:11:47,500 --> 00:11:50,880 Speaker 2: I'll save that for our next conversation. So yes, so 260 00:11:50,880 --> 00:11:55,159 Speaker 2: refinancing is important. It goes according to interest market and also, yes, 261 00:11:55,239 --> 00:11:58,599 Speaker 2: I think banks are very open to refinancing. It's after all, 262 00:11:58,609 --> 00:12:01,359 Speaker 2: a secured loan. At the end of it, that mortgage 263 00:12:01,359 --> 00:12:03,960 Speaker 2: is a secured loan. Uh, but I can't say that 264 00:12:03,960 --> 00:12:07,039 Speaker 2: for unsecured loans, right? So in a way, you won't 265 00:12:07,039 --> 00:12:09,440 Speaker 2: take it for more than 2 years. You will take 266 00:12:09,440 --> 00:12:10,880 Speaker 2: a short term loan, maybe 8. 267 00:12:10,969 --> 00:12:13,299 Speaker 2: 8 months is what you will go. So it's really 268 00:12:13,469 --> 00:12:16,579 Speaker 2: in terms of banks, are they really helping the consumers 269 00:12:16,580 --> 00:12:20,599 Speaker 2: because interest rate has dropped. Is the rate also dropping correspondingly? 270 00:12:20,650 --> 00:12:22,789 Speaker 2: And I think to be fair, Singapore banks have been 271 00:12:22,789 --> 00:12:25,189 Speaker 2: doing that. So the consumers know that they are not 272 00:12:25,190 --> 00:12:29,059 Speaker 2: getting paid, but like I said, read the terms and conditions, right? 273 00:12:29,140 --> 00:12:31,789 Speaker 2: If the headline rate sounds good, just read the terms 274 00:12:31,789 --> 00:12:34,429 Speaker 2: and conditions. That's my advice. Now you talk. 275 00:12:34,549 --> 00:12:37,380 Speaker 2: About some people taking short term loans, right, because they 276 00:12:37,380 --> 00:12:39,939 Speaker 2: want to take advantage of lower rates, for example, and 277 00:12:39,940 --> 00:12:42,059 Speaker 2: some people want to do this in order to pay 278 00:12:42,059 --> 00:12:47,340 Speaker 2: off certain expenses, maybe less important, less heavy expenses that 279 00:12:47,340 --> 00:12:49,820 Speaker 2: may not be as big as a mortgage loan, for example, right? 280 00:12:49,900 --> 00:12:52,340 Speaker 2: That's just one reason. Is there such a thing as 281 00:12:52,340 --> 00:12:55,679 Speaker 2: a good time or a good occasion to take a loan. 282 00:12:55,710 --> 00:12:57,978 Speaker 2: So I'm asking about the timing here. 283 00:12:59,330 --> 00:13:01,729 Speaker 2: No, I don't, because to my mind loans, if you 284 00:13:01,729 --> 00:13:05,959 Speaker 2: think about unsecured, it still needs-based. It is a needs-based loan. 285 00:13:06,270 --> 00:13:07,979 Speaker 2: So you have to have a need, you take a loan. 286 00:13:08,130 --> 00:13:10,849 Speaker 2: It's no point taking a loan in anticipation of a 287 00:13:10,849 --> 00:13:13,599 Speaker 2: need because once you take a loan, you're already paying interest. 288 00:13:13,840 --> 00:13:16,200 Speaker 2: So that's why if you if you're in a situation 289 00:13:16,200 --> 00:13:19,409 Speaker 2: like this, it's better to have a standby line. So 290 00:13:19,409 --> 00:13:20,929 Speaker 2: don't think of it as a loan that you have 291 00:13:20,929 --> 00:13:23,049 Speaker 2: drawn down, get a standby line. 292 00:13:23,349 --> 00:13:24,809 Speaker 2: So so that if you want to draw it now 293 00:13:24,809 --> 00:13:27,010 Speaker 2: in the next minute, you already have access to it 294 00:13:27,010 --> 00:13:29,330 Speaker 2: rather than to apply it when you need it. So 295 00:13:29,330 --> 00:13:31,330 Speaker 2: I think maybe to answer your questions, always have a 296 00:13:31,330 --> 00:13:34,690 Speaker 2: standby line that is already there available for you that 297 00:13:34,690 --> 00:13:37,488 Speaker 2: you can draw down. Yes, I think that's a really 298 00:13:37,489 --> 00:13:39,719 Speaker 2: sound advice for sure along with everything else that you've said, 299 00:13:39,729 --> 00:13:43,169 Speaker 2: and I only wish I had this advice maybe 1015 300 00:13:43,169 --> 00:13:46,369 Speaker 2: years ago. But Jane, you know what, nonetheless, this has 301 00:13:46,369 --> 00:13:48,890 Speaker 2: been informative. Thanks very much for coming down to the 302 00:13:48,890 --> 00:13:50,010 Speaker 2: Money Talks podcast. Thank you. 303 00:13:50,219 --> 00:13:51,809 Speaker 2: Thank you for your time. Now listener, if you've got 304 00:13:51,809 --> 00:13:55,010 Speaker 2: any comments or feedback or questions, even, you can always 305 00:13:55,010 --> 00:13:57,059 Speaker 2: leave us a message. You know where to reach us. 306 00:13:57,250 --> 00:14:00,690 Speaker 2: Money Talks is available on Apple Podcasts, Spotify as well 307 00:14:00,690 --> 00:14:04,329 Speaker 2: as YouTube Music. Do leave us a rating. We look 308 00:14:04,330 --> 00:14:06,770 Speaker 2: out for those sometimes. Credits to the team as well, 309 00:14:06,859 --> 00:14:11,369 Speaker 2: Christina Robert, Tiffany Ang, Junaini Johari, Joanne Chan, Hanida Amin, 310 00:14:11,619 --> 00:14:14,739 Speaker 2: Arjun Bala and Mohammad bin Jafar. I am Andre Heng 311 00:14:14,739 --> 00:14:16,489 Speaker 2: for the Money Talks podcast. We'll catch you at the 312 00:14:16,489 --> 00:14:16,890 Speaker 2: next one.