Do some of your expenses pile up like a ton of bricks and need to be paid off immediately? What do you do if you don’t have enough to pay for all these bills?
A good way to pay these off these bills is a payday loan. In Singapore, there are a lot of licensed moneylenders offering payday loans. With their help, you will be able to free yourself from your bills and even spare you from the constant visit of agents trying to collect your dues every week.
Things happen when you least expect it to happen and even though you think you are getting by with your current income. Even if you managed to save a few dollars, emergency expenses would guarantee it is not enough. If your salary isn’t due till the next few weeks, you need to have a plan for these kinds of financial emergencies before it causes you enough stress.
What Are Payday Loans?
Payday loans are a short-term loan which you need to pay within a short period of time. Some even call this type of loan as a cash advance. Just like personal loans, you can get this type of loan within an hour or 24 hours from moneylenders. Borrowers only need to bring in a few documents as part of their requirements and the approval process is not as strict as compared to other loans.
Short Term Loan
For those who are employed and need quick funds, payday loans are recommended to get because you can apply for it by showing your monthly income or salary. You will be able to pay your monthly dues on time even if you do not have enough money to pay for them. Simply pay off the loan when your payday comes and everything will go smoothly from there.
Difference of Payday Loans from Personal Loans
The major difference between a payday loan and a personal loan is the fact the borrower can pay the loan immediately a day after they got their paycheck. As a result, the loan term is very short and it will be until your next paycheck. It will be easy to remember and you do not have to worry about high-interest fees.
Who is Eligible?
If you wish to apply for a payday loan, you must be currently employed for a year. If you are a new worker and have worked for 6 months already with your company, you can show your certificate of employment. Aside from your employment details, you do need to pass your other requirements like your ID and income documentation.
Benefits of Payday Loans
If you do not want to apply for a personal loan, getting a payday loan is the next best thing to get. You could easily get obtain the loan just like a regular personal loan without having to worry about the strict screening process. You also do not need to place down a guarantee to be able to apply. If you need a flexible payment plan, moneylenders offer flexible plans that would match your need. Just make sure you tell them what you need and they will adjust the loan term for you.
For example, you can pay your loan with a fixed monthly payment when your next paycheck arrives. You can also sort out the payment in flexible dates as you could. Moneylenders also offer payday loans with good interest rates, so even those who are high earners can avail it.
Payday loans are also quite flexible as compared to other types of loans. Since it is not a long-term loan, you can easily pay off your loan easily once you get your paycheck. As a result, you do not have to worry about debts throughout the year or the next. Moneylenders also offer flexible terms to make it easier for you to pay the loan.
When you understand every aspect of the loans, it will help you reduce loan costs once you pay off your loans early. If you pay it for longer, the interest rate would balloon and the more you need to pay off the interest fees.
Revive Credit Scores
If you wish to revive your credit score and improve it, payday loans are ideal because they are short-term loans. Simply pay for them on time and it will show that you are a good borrower.
Risks of Payday Loans
Unfortunately, payday loans do come with some setbacks that you must be aware of before you try applying for one.
First of all, payday loans have very high-interest rates which are more expensive than standard loans. Although the loan has a short term, you still need to pay the interest rate prescribed. As a result, you will need to pay more than the original amount you should be paying when you get your paycheck.
Second, there is a risk that you will put yourself in a cycle considering how paychecks are scheduled and work. When you borrow a loan and pay off your loan, you may end up having to borrow again to pay off your next month’s pay. It may be difficult to get rid of this cycle altogether.
Finally, just like other loans, you need to pay your payday loans on time because they will still mark your payments if they are late in your credit record. When they do this, other lenders would also see it.
Just like other loans, you must think carefully if payday loans are the right type of loan for you and where you should apply for one. You must also determine how to use it properly and if you are able to pay it immediately once you get paid because it comes with a very high late payment and interest fees.
Be a responsible borrower and make sure that you are 100% sure before sending your loan application! Good luck!