Sometimes unexpected bills might show up and you do not have any other option than to look for help until the next payment. These are the cases where a payday loan might be useful because it represents a simple way of getting money fast from a safe source. For example, if a medical problem occurs and you need money immediately while your financial resources are limited at that moment, all you have to do is to search for the best payday loan. This type of loan allows you to borrow a moderate amount of money until the next pay check thus you will be able to pay for any emergency.
What Is a Payday Loan?
A payday loan in Singapore is a type of loan which has a fixed repayment term for borrowing small and moderate amounts until the next pay check. These loans are a popular option because they are way much easier to obtain and the fact that they have a short repayment period makes them easy to repay. The interest rates for these loans may vary, but the maximum is 4% per month. If you can not repay the amount you borrowed in time, there are some penalties that you will have to pay, but they can not exceed $60 per month. Therefore, you really should consider all of these aspects when thinking about these kind of loans.As mentioned before, usually these loans are used only in emergency situations, when it is a matter of necessity. For example, if you borrow $1000 with a thirty day repayment period, the extra payment will be somewhere around $150. So, is it really worth it? Is it a good deal? Indeed, it is an easy way to get the money you need from a reliable source, but even if it is about an emergency you should think twice before you get it if it is really worth it. But i n the majority of cases, it can be an excellent idea to get you back on your feet until the next salary.
The Advantages and Disadvantages of Payday Quick Loans
As any other loan, the payday quick loans have advantages and disadvantages. Here is a list of both of them that you should consider before applying for one:- Quick approval times: A long term credit might require more time and definitely more financial guarantees, but a payday loan in Singapore has a quick application process.
- Repayment times: These loans are perfect if you need quick cash because they are usually for a 30 day period, meant to be repaid on the next pay check.
- Emergency situations: Nobody can predict the future, therefore there might occur some situations when you need extra money like a medical bill. These loans are the best option for quick cash in such situations.
- These being the advantages, here is a list of the disadvantages:
- High Interest Rates: Even though they are a handy option when it comes to handling certain situations, they also have quite high interest rates.
- Limited Loan Amounts: This is a huge disadvantage when it comes to loans, the maximum you can borrow. Because these loans have a short term repayment, the moneylenders can not give you huge amounts of money. If you need a bigger amount of money or a longer repayment period, then these loans are not the answer for you.
- Negative Credit Impact: If you fail to repay your loan, your credit score might be affected. A lot of moneylenders can be flexible, but all of them have the right to report debtors to the SG credit bureau.
Who Is Eligible for a Loan in Singapore?
Here are the requirements to be eligible for a loan, regardless if it is about quick loans, personal loans and so on:- People who are permanent residents or citizens in Singapore
- People who are above the age of 21
- People who are employed (employment status full-time or part-time)
If you check all of these boxes above and you are eligible for a loan, then you should start to prepare your documents. For applying for a loan you need the next documents:
- An identity proof, whether it is a NRIC or a Passport
- A residency proof, you can put the household bills
- An income proof, you can add a CPF, a bank statement or a computerised payslip
- An employment contract which can prove that you are employed
Investopedia mentions ‘If you are denied a personal loan, you will receive an adverse action notice. This notice will explain why your application was rejected. Once you know why you were denied, you can take steps to prepare yourself to reapply successfully.’
