The payday loan is a short-term, unsecured loan. This is often used by Singaporeans to help settle bills, rent. This is in addition to other expenses which cannot be put on hold until the following payday. For you to get the payday loan, you are required to have a steady job. This needs to offer a fixed income each month, and you need an account. This loan type has different positives and negatives that are discussed below.
Pros Of Using Payday Loans
The main difference between traditional loans and payday loan is the tenure. The payday loan is intended for short periods. This can be less than one month, and you need to repay them quickly. Provided you keep to the by paying ahead of the due date. The payday loans will help you cope with a challenging cash problem.
Cash Is Availed Fast
Usually, in under 24 hours, the payday loan cash will be availed to you. This is faster than the conventional bank loans which could take some days. That is for processing and pay out the cash.
The Loan Offered By Licensed Moneylenders
At all times, it is recommended that you deal with Singapore licensed moneylenders from https://www.moneylenderreview.com/. Different from loan sharks, accredited moneylenders stick to stringent lending rules. IPTO / MinLaw also accredits them in Singapore.
No Credit Checks
The conventional bank loans take longer to be approved. This is because they require exhaustive financial background checks. Nowadays, unsecured loans require that everyone undergoes thorough financial checks. Luckily, payday loan moneylenders do not subject you to such stress.
Cons Of Payday Loans
Very High-Interest Rates
The payday loans have similar interest rates like credit cards. However, for payday loans, the tenure is a lot shorter. It could be twice each week or once a week compared to the annual scale.
Possible To End Up In A Vicious Financial Cycle
Payday loans could damage your financial future, but only when you are not careful. Although you will have repaid your past payday loan. By the middle of the month, you could find yourself needing urgent cash to settle your bills. This could lead to taking out an additional payday loan. If you do continue doing this each month, you might end up in serious financial trouble. This is because debt will be piling into more debt.
When Not Careful, You Might Hurt Your Credit Score
Realize that any late payment and non-repayment will be reported. Even if payday loans do not require credit score checks. Thus when you miss making your payday loan repayment, it could ruin your score. This is similar to how other loans work.
Payday loans could still impact the loan amount you can borrow from lenders. That is only when you intend to make use of a larger loan. One example of such a loan is the home loan. It is advisable that you consider the payday loan as an option and the last choice when you urgently need cash. When you have to take out payday loans. Always ensure only to do this because you require the cash. Importantly, ensure to repay it at the agreed time.