There is no doubt that this type of loan is helpful for those who need money immediately but do not have a good credit history to apply to banks or Pte Ltd lenders. Despite the good things about this type of loan, loan experts remind people that they have to be extra careful in choosing which payday loan best fits their status.
For some, payday loans have too high interest. Also, loanees are expected to pay within a short period of time. Failure to pay the loan could mean lawsuits are in worse cases, even jail.
Things to consider before getting a payday loan
Before choosing the best payday loan in Singapore, we first have to talk about things to consider if this type of loan truly fits you. You have to ask yourself if this type of loan is the right choice of loan for you.
If you have a good credit score and can surely apply in secured or unsecured loans in banks or in Pte Ltd companies, this might not be the right loan for you. This type of loan is particularly fit for people who are willing to take a high risk with their financial needs.
You also have to consider how much money you need. Payday loans do not offer a large loan amount. This is an unsecured type of loan. Lenders have to limit the money they will lend you. Thus, if you need money to purchase a big investment or property such as a car or a home, this type of loan will not suit you.
Also, as the name suggests, payday loans must be paid in the next paycheck. The loan you made today must be paid by your next paycheck. For people who are tight with their salaries, this type of loan is not a good idea. Try looking for other loans available in the market.
This type of loan also has high interest. This means that it is more expensive than other types of loans. This is somehow expected given that this is also an example of an unsecured type of loan. Many people would have a difficult time paying for a loan with a high-interest rate.
There are a lot of things to consider before applying for a payday loan. If you truly wish to get one, you have to consider the pros and cons. Listed above are important things to think about this type of loan. Do remember that this loan may or may not help you. In some cases, this could even aggravate your financial problems.
Payday loan vs personal loan
Surely, payday loans are not for everyone. Those who do not have a regular stream of income should not apply for this kind of loan. Also, those who have built good relationships with the banks and other financial institutions should consider this type of loan as a final resort.
Another kind of unsecured loan is the so-called personal loan. Personal loans have a small interest rate and loanees are given around two years to pay. This is in stark contrast with payday loans where loanees are given only weeks or a month to pay.
Applying for a personal loan can be easy too. It may take a few days or weeks to be processed, but the good thing about it is that it does not put too much pressure on the loanees. A personal loan provides sufficient time for loanees to give back what they have borrowed.
Also, personal loans can grant loanees with a higher loan amount. Hence, for those who need a large sum of money, this might be a better option. So, why would people still choose payday loans over personal loans? One reason is that it takes a considerably short period of time to apply for payday loans. If you have an emergency and need the money immediately, this type of loan is right for you.
Can you get a payday loan with bad credit?
One good thing about payday loans is that lenders would still allow you to get a payday loan with bad credit. This is probably the main reason why a lot of people would wish to get a payday loan instead of other loans like a personal loan. With bad credit, payday loans best fit their situation.
Moreover, in most cases, applications to this type of loan do not require showing credit record or history. This means that the lenders will not be able to know whether you have a bad or good credit history. Bad credit would not matter simply cause many lending companies and organizations do not require seeing it.
Since people with bad credit records can still apply for this type of loan, moneylender companies have to apply a high-interest rate. This also serves as a way for the companies to compensate for the risk they are taking in lending the money to people with not so great credit record or history. Thus, if you are planning on applying for a loan like a payday, do not be surprised with high-interest rates and charges.
When should you get a payday loan?
In Singapore, payday loans are on the rise. A lot of Singaporeans have seen how this type of loan is truly helpful in certain occasions and conditions. The challenge for us then is to identify which circumstances best fit payday loans. When is the best time that we could use this type of loan?
Despite the risks alongside payday loans, a lot of people in Singapore still choose to get this type of loan. One reason for doing so is during emergency situations. At times when a family member gets sick, it is easier to apply a payday loan to a moneylender instead of going to a bank or any other licensed moneylender. People can get their money fast.
Also, payday loans can help in emergency expenses or those expenses are not included in the budget. If a household falls short with their income this month, they would opt to apply for a payday loan so they do not face problems like eviction. In some cases, a payday loan is also useful when Singaporeans encounter a car break down or a broken laptop. These expenditures are not planned. Hence, a payday loan is necessary to pay them.
There is no doubt that this type of loan has helped thousands of people in Singapore. It has alleviated the worries and concerns of man people who are facing financial emergencies and crises. The most important thing to remember is that the loan you will get should help you with your money problem and other concerns. It should not worsen your existing concerns and issues.
How to choose the best moneylender?
Once you are confident that payday loans are the best loan for you, the next step is to identify which of the moneylender businesses or offices is best for you. Remember to only trust moneylender agencies that abide by the rules set by the Ministry of Law.
Six of the best-licensed moneylender businesses in Singapore today are:
Visit the website of each of these licensed money lender companies so can compare which of their offerings best fit you. In case you choose not to apply to these companies, make sure that you are borrowing from a licensed moneylender. So you are protected by law.
Read more: Ultimate Guide to Borrowing from Licensed Money Lender
The two main things to consider in choosing which moneylender is the best are interest rate and time of payment. Try to look for a lender that offers the least interest rate. If you can, find a lender who would give you more than a month to pay back the loan. Just like any other types of loan, you have to read, research, and inquire in order to find the best company that fits you.
One good news for those planning to loan money is that there are new and emerging payday loans in Singapore today that gives loanees 100 days to pay back. This is better than waiting for the loanee’s paycheck which only takes a month or so.
The payday loans allowing 100 days of payment will largely benefit people who are struggling financially. Instead of being forced to allow their next month’s check to pay for a loan, they could divide the amount into three months or so. This will greatly ease their burden. If you have encountered a 100 days loan near you, try inquiring about because it might make your life a little bit easier.
For those in Singapore interested in an offer like this, visit Loan Advisor‘s website to know more. We can help and guide you in your loan process. We could also provide you with information about other types of loans. If you feel like you are overwhelmed with all this information on loans, do not hesitate to seek help. There are professionals willing to help and guide you.
Before applying for a payday loan, make sure that you have understood its advantages and disadvantages. This type of loan is especially helpful in emergency situations. Also, it is helpful for those who have not established a good credit rating yet. There are various accounts proving that loan has helped thousands of people in Singapore.
Meanwhile, for those who have a good credit score and who can apply for personal loans, a payday loan might not be your best choice. While payday loan applications are fast and convenient, the loan itself has high interest rates. This could mean that you will have to use your entire month’s paycheck just to pay a loan.
Much like any other decision you make about money and your finances, it is best that you think of your loan applications thoroughly. If you have decided that payday loans would suffice what you need at the moment, just make sure to go to lenders that you have known and trusted. As for those who do not have prior experiences to taking a loan like, consider the top six companies listed above. They have a good record and they have helped a lot of Singaporeans in the past.