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.

What are Payday Loans and What do You Need to Know about Them?

Payday loans play a balancing role in the short-term lending sector in Singapore, providing temporary liquidity to those who need it. For the uninitiated, payday loans are usually a short-term loans with a higher rate of interest as compared to other loans and the dues should be paid on your next payday. Depending on the regulations of countries, you can get the payday loans online or even from storefront payday lenders.

Though payday loans are one of the most popular loans now, it also comes with a few risks. One should always weigh the pros and cons well before taking a payday loan in Singapore. Here’s a look at some of the fundamental features of payday loans to help decide if it’s suitable for you:

1. Loan size
Payday loans are only for small amounts and you cannot use it for paying huge debts. Mostly, the payday loans are used to make payments of the credit card bills and other outstanding liabilities that are of a small amount. A common loan amount for this is around $500 but can, of course, can be higher or lower depending on your need.

2. Single repayment
Unlike other loans, you don’t have the privilege of repaying in installments and the amount has to be made in one go on the next payday or with income received as a premium of social security or a pension. The due date for payment is usually 2 to 4 weeks from the issue date of loan and it is usually decided on the day of the loan itself.

3. Mode of repayment
To repay the loan, you will need to give a post-dated cheque for full balance which includes the fees as well. One can also authorize the lender to electronically debit the funds from your account on the due date.

4. Risks involved
Payday loans come with certain risks such as unable to pay the loan on the next payday, being charged with a higher rate of interest, the risk of getting in deeper debt, reduced credit scores, higher fees and an additional loan to the current loans. Thus, one should make the decision only after considering all the above-mentioned risk factors.

Explore the web for more tips on finding a reliable lender who can offer a fast cash loan with minimum risk. It is recommended that you read all the terms and conditions mentioned in the loan documents to ensure that you never get trapped in any fraudulent activities or scams. Keep browsing the web and read about loan-taking tips that can help you to stay protected from fraudulent moneylenders.