Before we dive in-depth into payday loans, let’s discuss the basic definition of payday loans first. A payday loan can be defined as a kind of temporary or short term borrowing in which a lender will provide credit to a borrower that is based on their income. Payday loans generally have a high interest, and its principal is based on a part of the borrower’s upcoming paycheque. Payday loans impose high-interest charges for immediate funding and they will provide borrowers with instant cash. These financial loans are also known as quick cash loans or advance check loans. In the next section, we will discuss how you can borrow money cheaply through payday loans:
How to obtain a cheap payday loan
Payday loan companies are usually small credit providers utilizing physical offices and branches that make it possible for them to conduct on-site credit approvals and agreement. A number of payday loan providers might also be obtainable by means of applying online through their website. There are a lot of options for getting short term loan Singapore, you just have to be patient when searching for the right payday loan company.
To accomplish an application for a payday loan, a borrower needs to present a payslip given to them by the employer or company that they are working at currently. The payslip needs to have important information, such as the name of the borrower and their current income on the job. Payday loan providers generally base the initial size of the loan on a portion of the income of the borrower. This is to make sure that the borrower can afford to settle the loan when their payday comes. There are also payday loan providers who take the wages of the borrower to serve as collateral. This is done by requiring borrowers to surrender their paycheck or ATM that is used for payment.
Other variables that affect the terms and conditions of a loan include their credit history and score, which is extracted from a credit background check when the borrower applied for a loan.
The advantages of payday loans
1. Short term payday loans are easy to be qualified for
The main benefit of payday loans is their ease of qualification. Actually, a lot of cash advance loan companies guarantee to provide cash within just a single day. They also guarantee a quick lending conclusion, so that you will know if your application is approved or not in a speedy manner. This allows borrowers to obtain instant cash, which is perfect for those needing money right away. There are even some lenders that are open 24/7, and some offer applications and approvals carried out through the internet. This means that if you need to have money on a Sunday, or any other time in which there are no banks open, you can always turn into payday loan providers and they will be able to help.
As opposed to regular loans, which could take too long to make an application for, these payday loan requests normally take as low as 5 minutes and a maximum of 1 day, adding up to their already speedy process.
2. They have less prerequisites compared to other loans
Standard loan companies generally demand proof of income from your employer, Social Security number, ID pictures, a credit assessment and will first confirm your capability to pay back that loan. Contrary to regular personal loans, the majority of payday loan providers have much less prerequisites to submit.
Usually, all the requirements for applying to a short term payday loan is to be of legal age, possession of valid IDs issued by the government, have a job or other regular revenue stream, and a bank account on your name.
Although having reduced prerequisites allows for cash to be obtained faster, take into account that the extra demands from banking institutions and other loan companies are being used to protect the borrower.
Payday loan providers do not look at your credit history
As opposed to regular loans in which you need to have an excellent credit history to be accepted, payday loans seldom demand a credit rating check. However, this also goes both ways. Even if you pay your payday loans on time, they will rarely help you in raising your credit score. If you want to build your credit rating, you will have to take out loans that will analyze your credit score.
Can foreigners avail of personal loan while in Singapore?
Yes, there are banks who offer personal loans for foreigners on Singapore, provided that they possess a valid visa for work. One such bank is Citibank with its HSBC personal loan. Their loan needs foreigners to be a holder of P1, P2 or Q type employment pass as a requirement.
Payday loans do not require any collateral
As opposed to vehicle financing, mortgage and even some regular loans, payday loans are generally not guaranteed through personal property as collateral. This ensures that even if you did not pay off the loan, the lending company cannot take your property as a result.