All You Need to Know About Payday Loans

Payday loans are short-term loans which can be used to get through a rough patch. However, there are only a few situations where these loans truly end up being helpful, rather than becoming a burden around your neck that you end up carrying for many years. Before using a payday loan, it is important to understand the risks and benefits associated with it.

There are many options available for taking a payday loan in Singapore and knowing more about the nuances of it can help in making the correct decision. Here’s a look:

What are payday loans?
Payday loans are small loans which can be used when you are in need of quick cash for an emergency or a personal project. Often, payday loans are short-term loans for a limited amount of money. To get the loan, you might even have to write a check for the amount you are borrowing along with a fee. The check will be left with the lender so that they can cash it once you are ready to repay.

Sometimes, loans can also be extended if you are unable to repay them on their due date. You don’t usually need a good credit score for a payday loan in Singapore. Thus, it is very popular with people who are facing a temporary financial crunch.

Cost of payday loans
Payday loans can be extremely expensive if you let them drag on, as they are meant to be repaid quickly. When left unpaid, the compound annual interest rate can hit interest rates in the realm of 3 digits. For example, you might have to pay as much as a $20 fee just to borrow $100 for two weeks.

Payday loan pitfalls
The main drawback with payday loans is their cost. Because of the extremely high fees, they might not help you solve the real problem. In fact, with poor financial planning, payday loans can actually end up making things worse for you.

The payday loans can get you through a rough patch once or twice but it is not always the best option. Bouncing checks that you write to the payday loan establishment can get you into trouble. Always take into account what you are able to afford paying off and whether the situation is urgent before going forward with the application.

If you are struggling with the repayment of several different loans, you might also want to consider a debt consolidation loan in Singapore to help with repayment. Debt consolidation loans do not reduce the amount of the loan to be repaid, it consolidates all the loans into. However, this consolidation might be able to drastically help you reduce the interest rate associated with all of them. It can be considered to be similar to refinancing a loan in some ways.

Search online for more information and suggestions on how to choose the best debt consolidation loan in Singapore. You can get in touch with moneylenders and ask for quotes to choose the best loan provider at the most affordable price.

Five Tips for Getting a Cash Loan from a Moneylender in Singapore

Even as little as a few years back, it was quite difficult to get a loan in Singapore. Fortunately, in recent years, it has become easier to get a loan due to the increase in the number of money lenders here. There can be many reasons for Singaporeans to take a fast cash loan such as paying medical bills, accidental bills, or funding a house investment, for example.

However, there are certain things you need to pay attention to while acquiring a loan from the money lender. The first thing to consider when applying for a loan is to search for a licensed moneylender in Singapore. There are unauthorized moneylenders in the market which are not recommended for getting loans from, as their rate of interest is high and failing to repay the loan may lead to severe consequences.

Here’s a look at some useful tips on getting a cash loan from a licensed money lender Singapore:

1. Necessary documentation
You will need several documents for identification purposes while applying for a loan. It will be helpful to bring proof of your job such as an ID card from work. The lender will provide you a loan when they feel you are reliable and are able to repay the loan.

2. Spotting an illegal money lender
When applying for the loan, you should find out if the lender is licensed. If they are not licensed, choose another lender and always make sure to get all documentation and identity proofs back.

3. Make sure to sign the contract and get a copy
If you don’t have a copy of the documents, your loan could be considered fraudulent. Also, avoid signing a contract that looks incomplete. It should state all the terms of loan such as the payback period and interest rates.

4. Inquire about collateral
Before agreeing to a loan, confirm the collateral requirements. In case you fail to repay the loan, the money lender in Singapore can claim whatever you have put up as collateral.

5. Mutual respect
Choose lender that treats you with respect. Never go with a money lender who intimidates you or treats you in an unkind manner.
Explore the web for more information and tips on how to find the best money lender in Singapore.