When you find yourself in need of cash loans fast, there are relatively few options. Generally your bank won’t lend to you a bridging loan if it isn’t for the purchase of a concrete item they can hold as collateral (i.e., car, boat, business equipment, house, etc.). Friends and family might loan you money if you’re able, but often people feel embarrassed. One opportunity anyone with a job can take advantage of is payday loans. But what is a personal loan Singapore and how can it help you?
A payday loan gets its name because you use your paycheck as collateral. So a payday loan is always paid back on payday. After deciding on the amount and terms with your borrower, you write the business a check, postdate it and then leave it with the business. If you don’t return or call them on your payday to instruct them to cash it, the company will do it themselves. Many personal loan Singapore operations will actually give you a call to remind you that your money is coming due soon.
When answering “What is a payday loan Singapore and how can it help you?” it is necessary to look at some of the risks as well. For one thing, the interest rate is generally very high. This is because personal loans tend to be for very little money and for, generally, two week periods (one pay cycle). Low interest rates wouldn’t turnover enough money to pay for storefronts, employees, equipment, etc. It is doubtful that anyone is getting wealthy running one of those stores. As mentioned before, you need to be sure the money you owe will be in your account when the borrower cashes your check. If it’s not, you’re out the money plus a free for bouncing a check. Lastly, you don’t want to get into a cycle of constantly needing a loan every pay period. The rates will mean you never get the benefit of a full paycheck and you will constantly be playing catch up.
So what is a payday loan and how can it help you? It is a very convenient way to traverse unforeseen financial pitfalls in the short term, as long as you have a job. For many, it is easier and more reliable to get money from a licensed moneylender than trying to borrow money from friends or family. As long as you know the money you owe will be there come payday, it is a very helpful service in a time of need.