It’s nearly impossible to avoid financially hard times at some point in your life, which is why none of us are immune to the possibility of debt. No matter how financially frugal you might be, the unexpected can cause your bank account to reflect an entirely different picture.
When this happens, people consider loans as a means to consolidate debt and pay it off in a respectable and predictable manner. Loans are an excellent way to get a fuller scope of the debt at hand so you can plan for the future with some peace of mind.
One of those loans to consider is a payday loan. What kind of loan is that exactly?
What Are Payday Loans in Singapore?
A payday loan is known as a short-term loan or salary loan. It’s also known as an easy loan that enables you to get money quickly while you wait to receive your next paycheck, which can sometimes, be too far away. Many salary workers will opt for this kind of loan to make ends meet or pay off bills at home that just can’t wait anymore.
They sound good in theory, but can come with some stipulations that you should know ahead of time.
For starters, payday loans are beneficial to those that need immediate money after some kind of problem or emergency. They are also beneficial to people that know for certain their paycheck is coming next week (as opposed to those that are unsure about future payments). With a payday loan, you can count on the following:
- Quick, immediate approval for fast cash
- Minimal requirements for approval
- Easy loan process
But like every good thing in the world, there are also downsides to payday loans.
Payday Loan Risks
With a loan that is this easily accessible to you, it consequently comes with high interest rates that will climb 24x if you don’t pay on time. Therefore, a payday loan should only be used for something that is a very short-term requirement. Otherwise, the cost of the loan will slowly eat your bank account alive.
If you end up with a payday loan that starts to take on a life of its own, it can negatively affect your credit score, which will impact your financial standing with all other loans/major purchases that you wanted to consider in your lifetime.
Therefore, a payday loan is only advisable for smaller, shorter purchases knowing that you will be able to pay them off when the paycheck arrives in 1-2 weeks. Lastly, never accept a payday loan from an unlicensed money lender. See our other blogs on identifying illegal money lenders for more information.
Best Money Lender in Singapore
Regardless of where life has left you, we know that payday loans might be your only short-term option. We have worked on the best possible interest rate, providing you with access to our legal money lending team. We want to help you get back on your feet. That starts with a loan you can count on. Get in touch with us today!