Are your bills piling up too fast, too many in need of immediate payment? If there’s not enough money to settle everything, what would you do?
One way to sort these problems would be payday loans. There are many licensed moneylenders In Singapore who would offer you a payday loan. With the quick cash you get, you can unburden yourself over your bills and perhaps get relief from the constant visits of collection agents.
Things do happen when they are least expected, though you might think you‘re making do with your present earnings. You may manage to increase your savings here and there, but sudden emergencies are likely to show it isn’t enough. At such times, if your salary isn’t yet due for weeks, you should have some plan for meeting sudden financial obligations before the stress overwhelms you.
What Is A Payday Loan?
A payday loan is a short-term credit that you must pay off in a brief period. Lenders might refer to such borrowings as cash advances. As with a personal loan, you could secure a payday loan in less than an hour, or within 24 hours from a bank or other large moneylender. A borrower must only present a few documents to meet requirements, and the process for approval is less strict in comparison to that for different loan types.
For people who remain employed but need fast cash, a payday loan is recommended since they could always apply for one by presenting their salary or other monthly income. You can pay the monthly dues on schedule, whether or not you have enough funds to pay it all. Just settle your loan whenever payday arrives, and things should go nicely from thereon.
Differences between Payday and Personal and Loans
Personal loans differ from payday loans in that as the borrower, and you can immediately pay off the latter, typically the day after your paycheck arrives. Loan terms will, therefore, be concise and for until the next paycheque. The arrangement is more comfortable to remember, and you won’t need to be overly concerned with high rates of interest.
Who Are Eligible For Payday Loans?
If you’re planning to take up a payday loan, you should be employed for at least a year, with a fixed salary amount. If you are newly hired and have been working for at least six months, you only need to present the certificate of employment from your present company. Other than the employment details, you must pass all other requirements, including submission of income and ID documentation.
Benefits of A Payday Loan
If you’re suspicious of personal loans, taking up a payday loan would be the next best option. You can readily obtain these much like conventional personal loans, but with less worry about undergoing strict screening procedures. You will not have to place some guarantee to apply. Were you in need of a flexible repayment; moneylenders do offer versatile plans to match your specific needs. Just inform them of your issues, and their advisors will adjust the financing terms as needed.
As an example, you could pay off your loan through a fixed monthly installment for when the paycheque comes. You could also make payments according to a flexible schedule of repayment dates. Moneylenders do offer reasonable rates of interest on payday loans, so even high-earning Singaporeans avail of them.
Flexible Repayment Terms
A payday loan is also somewhat flexible in comparison to other kinds of financing. As this is no long-term borrowing, you can readily repay the loan when your paycheques come in. You, therefore, need not be overly concerned with debts all through the year or until the next. Moneylenders do offer flexible loan terms that can ease the burden of paying it off.
Once you have understood all aspects, the knowledge gained should help you lower your borrowing costs if you repay loans early on. For if you were to make repayment over an extended period, interest rates would balloon excessively and you would be expending more effort to pay off all interest fees.
Renew Credit Profile
If you’re hoping to renew your credit profile by improving your score, a payday loan is ideal for the purpose as these are arranged for the short term. Simply make payment on time, and the history will begin to show that you’re a responsible borrower.
Risks of Taking Up A Payday Loan
Unfortunately, such loans come with inevitable setbacks, which you should understand before you begin applying.
Firstly, these short-term loans have high rates of interest that are costlier than those of regular loans. Even though very short repayment terms are the norm, you must pay the interest fees as agreed. Accordingly, you will be paying more than the original amounts you would have been paying from your paycheque proceeds.
Secondly, there is always the risk that you‘ll find yourself in a difficult cycle, given how paycheques tend to scheduled. If you do borrow and repay the loan, it’s possible that you may eventually need to borrow once more against the next monthly paycheque. It can be challenging to escape this cycle as a whole.
Lastly, as with other borrowings, you must settle the loan on schedule, for if your payments were to be late, they would be marked as such in your credit profile. Were this to happen, other lenders would take notice of it.
As with any financing, you should carefully assess if a payday loan is right for your situation, and also where you might apply for such. Likewise, you should learn how to exploit payday loans properly. Like how to make immediate repayment when your paycheques or commissions arrive, for this type of financing comes with rather high interest and late payment fees.
We advise you to be a good borrower by ensuring that you’re 100% ready to assume the debt before submitting any loan application.