Payday Loan – a brief explanation what type of loan is this one.
Payday loan sometimes it’s necessary, sometimes it’s a must
In our society giving payday loan is a business.
People need additional money not only for big purchase, like car and house.
Some expenses need covering immediately and people can not borrow money from their friends and family.
The only one option is a bank, but they have loans which are intended for bigger expenses and the conditions are not suitable enough. That’s why someone invented payday loans. The small business organization gives people money for a short period and the profit is the interest rate. This is a regular practice in a lot of countries where to get a loan is not something to be ashamed of. In modern life, there are lots of situations which can not be expected including emergencies and emotional purchases, too. Usually, people who are taking advantage of payday loans are completely sure that they will get their salary at the end of the month and will give back the money in a term.
Here is the catch: the interest rate is a bit higher than it is in banks. Of course, it is reasonable higher because terms are shorter and the procedure for taking a payday loan is easier. For example, most money lenders included in the Singapore catalogue LoanSingapore.sg Money Lenders List will give you a payday loan after only a quick check. Have in mind that moneylender will not forget about his money and they will seek for them if you don`t get them back.
Another great difference is that the amount of money that a moneylender will give you, is different than the amount bank will give you.
The purpose of a payday loan is to help people to meet the end of the month.
Usually, the amount is not more than a half of their salary. Bank loans, for example, are usually bigger, like one year salary bigger. People use them for buying expensive and important stuff, like cars or houses. Payday loans are used to cover some unexpected taxes or an unexpected pair of shoes on sale. We believe that a lot of women know what we are talking about. If this pair of shoes is on sale only several days and you don’t have enough money in your wallet to buy it, but you know that your salary is coming, a payday loan is an answer.
Not only is the procedure for application easier but transferring money, too. Imagine that you need a payday loan and apply for one. Not long after you are approved from the business account of the moneylender will transfer you the amount. You will be ready to go. When you receive your salary in the same bank account, they will withdraw the money back. If your bank account remains empty after the end of the term you will have to pay the rate and a tax for the delay. It is not the best deal really but when you need fast money it is not a bad decision.
Having a payday loan means you are completely sure that you will receive some money
At the end of the term and you can afford to pay them back. If you are not sure, don’t apply for that kind of loan!
In Singapore, there are different regulation for moneylenders and banks. For example, the amount which one money lender can give you is limited. Even if he wants to give you more, he can not. The interest rate is bigger (bigger than interest rate) but it is not way too big. Have in mind that if you find a moneylender with really low-interest rate probably it is a fraud. Another great risk, you should consider is that there are a lot of moneylenders who are not credible and not licensed. Be careful and check everything twice. You may not know but according to the law in Singapore, moneylenders have to explain you every single clause from the contract before giving you a loan. So you are allowed to ask every question you have in mind. If you have troubles understanding some of the clauses don`t be ashamed to ask politely and they will explain as many times as you need.