Ever thought about what would you do if one day life throws you a curveball and you may need a loan urgently? If you think the only way to get a personal loan in Singapore is to go through the process of applications and verifications that may take up to a few days to get materialized then you are wrong. These are exactly the situations where payday loan services may help you. In Singapore, in the past few years, payday loan services have been gaining popularity for the ease and hassle-free personal loans they guarantee.
So, if you too are looking at a licensed money lender or need a personal loan, you may want to know your other options too such as payday loan services.
But what exactly is a payday loan service?
A payday loan is a hassle-free form of loan which is of a lower cost value and can be granted on short notice. In simpler words, this service can be similar to taking an advance from your salary. It is to help the borrower with a certain sum until he draws his next salary and is in a position to repay.
As the name suggests, it is expected that the borrower returns the amount on his next payday. And if you default from doing so, you run the risk of incurring an interest. The single most reason why the payday loan service has become popular is that it gets the borrower money on the same day.
Simple and fast
The advantage of the payday loan service over the traditional licensed money lenders route is that it is a totally easy and fast way to get some money at the time of a small need.
The other reason for its popularity is also that it is less intimidating for the borrower as it does not involve vetting the borrowers’ credit history as it happens in the case of licensed money lenders. It is also convenient in case of small emergencies as it does not require any elaborate process. However, it does not also mean that this loan type does not have any prerequisites. To get a payday loan, you need to be 21 years of age and above in Singapore and have a source of income.
Interest rates
While opting for a payday loan it is important to look at interest rates as some licensed money lenders charge a high amount. But because of the popularity, many others offer competitive interest rates so it makes sense to know which licensed money lender may work better for your needs.
Small amounts
Since this loan is to be repaid on your payday, it is obvious that the amount you borrow should be less than your salary. While some suggest that a payday loan service must not be availed of unless in a dire emergency many financial advisors say that it can be a boon if you keep track of your repayment and do not falter on it to incur unnecessary high costs.
The documents required to avail of a payday loan are also simply your salary slip and a valid ID in Singapore. A passport or a drivers’ license can be used as a valid ID.
Credit score
If you are looking at increasing your credit score, a payday loan service can help you achieve that. Every time you repay your loan on time, it is reflected positively on your credit history. However, if you falter it brings down the credit score as quickly. So, anybody who is looking at a payday loan service must be diligent in repaying the amount at the designated time.
Terms and conditions
No matter how small the amount is when you are making a financial transaction one must always carefully consider the terms and conditions of the loan as proposed by the licensed money lender.
You should know the application fee involved to carefully weigh the pros of going for a payday loan service and not make a hasty decision given the tempting offer of getting a fast, quick loan. In fact, it is not surprising if you see the loan amount reflecting in your account within a few minutes of its approval.