Your financial report card

Most of us do not know how well or how badly we have done financially until we need money.

If you are applying for a home loan, and the banks refuse to lend you money, you know that you have failed miserably.

The problem is that we have no teacher to issue us our financial report card, so we think that we are doing all right.

Sometimes we can get approval for a credit card easily but we cannot get approval for a home loan easily.

That is because of the change in regulation governing home loan.

In some countries, such as Singapore and Malaysia, the regulatory authorities change the rule to prevent people from getting a bigger house than they can really afford.

Now the eligibility for home loan is based either on disposal income or total debt amount.

That means when you have car loan, study loan, and credit card debt to pay off, you can hardly get the approval for home loan.

When the bank turns down our application for home loan, they are giving us a financial report card with a big F in it.

It seems sad that the banks approve us credit cards to pay for all the shoes, bags, luxury trip, expensive dining, and yet they do not approve our home loan for us to have a roof over our head.

I think the government should not allow easy access to credit cards, but allow easier access to a housing loan.

After all, a housing loan helps us buy a house that is an asset.  A credit card just gets us into debt faster because the interest rate is so high.

If the government can limit the credit card to just one per person, that is good.  If a person wants to have more credit cards, then he has to prove that he is a fiscally responsible person.

Image Credit: Pixabay.com