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Short-Term Financial Crisis: How Will Payday Loans Will Help You Through?

Money lending institutions make small personal loans accessible to individuals who have a limited access to banks. Singaporean money lending institutions are licensed by the Registrar of lenders and are bound by rules and regulations that guarantee they follow all money lending and financial institutions laws.

Financial emergencies can happen unexpectedly and especially when you are least prepared. That is why trying to handle them can be quite challenging, particularly for those Singaporeans living paycheck to paycheck. The dilemma becomes severe when you don’t have sufficient money in the emergency fund.

Payday loans are intended as cash advances on your next paycheck. For you to qualify you have to be over 18 years old. You also need to hold a steady job and a bank account. Payday loans from moneylenders do not depend on your credit history, credit report or the absence of it. But instead, a fee ranging from $10-$30 is charged for every $100 you borrow. This makes the payday loan more costly than normal loans.

The positive side is that they offer you quick cash for those emergency times. Payday loans are mostly approved within 24 hours after you have submitted your loan application.

What You Need To Do

When you have family or a friend to whom you can count on, you will need to talk with them for help. Although there are situations when there is no one for you to contact for assistance. And to make things worse, getting a loan from a bank loan in this situation is barely feasible.

This is considering most banks take longer to process your loan application. And at the same time, they are not exactly bothered by your situation. On the other side, taking a loan using your credit card may be an option. But it is costly compared to banks, and again, it takes a long time to get the loan application processed.

Therefore, when you are in need of a short-term loan which you can repay using your next salary, then a good option for you to seriously think of is the payday loan. Every one of the legal moneylenders in Singapore offers this loan type to the suitable candidates.

One of the main benefits of this loan type compared to other loans is the speed with which the application is approved. You are able to get your payday loan in 1-2 days, and at times even within the same day.

Who Qualifies?

As its name suggests, the payday loan is issued based on your salary. Nearly every person that is employed can access this loan type from licensed moneylenders but the highest amount of money you can take out in loan depends on your monthly income. You are able to access a payday loan even when your credit record is not that good. Provided you are able to show a proof of employment. Thus this is an additional advantage of the money lender payday loan. Individuals who have a bad credit are able to access it. The payday loans are very easy to obtain because they are based on the status of employment and also your pay level.

Things To Bear In Mind

There are some important things that you need to take into account when you are applying for a payday loan. These include:

  • Payday loans are meant for financial emergencies and are not best for long-term financial solutions. In addition, when you are getting a payday loan for each month, you need to seriously evaluate your spending. You shouldn’t make it into a habit; this loan type is for emergencies.
  • You need to pay off your loan using the next salary. Similar to other loans, the payday loan also comes with interests. And a quite high rate at that. Hence, you need to only take the amount that you can pay off using your next salary. Don’t be tempted to extend your loan period by paying in smaller amounts or even the bare minimum. In so doing, you are more likely to end up paying more money than your original amount.
  • Be sure you do some research, this way you will get the best deals possible. Each moneylender may offer you a different rate for the same loan amount. Hence, by shopping around a little, can help you get a much favourable deal. Borrowers are cautioned to first confirm the rates being offered by the certified moneylender before settling for a payday loan. This will help when you are comparing the terms and rates to help you pick the terms offered, that best meet your financial situation. Approach a few moneylenders and, compare their interest rates they offer to help you pick the one with the most favourable terms to fit your budget.
  • Ensure you understand your needs, terms, and conditions of the loan contract before signing it. Bear in mind that you are duty-bound by law to honour the terms of the contract once you sign.
  • Payday loans are processed much faster time owing to the effortless verification procedure of income and status of employment. Lastly, at all times take loans from legal moneylenders.
  • Payday loans are the easiest to obtain as with a valid work permit, confirmed employment status and a bank account, a foreigner can have their loan approved fast. This loan is usually repaid once you get your monthly wages.

Conclusion

Payday loans are intended as cash advances on your next paycheck. Financial emergencies can happen unexpectedly and especially when you are least prepared. But first, when you have family or a friend to whom you can count on, you may need to talk with them for help. When that fails, you can consider taking a payday loan, which is issued based on your salary.

Nearly every employed person can access this loan type from licensed moneylenders. But the highest amount of money you can take out in loan depends on your monthly income. Of importance is to confirm the interest rates being offered and also be sure to pay off the loan using your next salary.

About the author

    Kally