Sometimes people find themselves in a financial dilemma, with a dire need of some fast cash. 1 solution that people turn to when they are faced with this dilemma is a payday loan. A payday loan is a short-term loan, usually two weeks in length, with an extremely higher payday loan interest rates Singapore. This type of loan appeals to people with bad credit who are in a drastic need of some money.
While payday loans may seem to be a viable solution to individuals who are in need of some quick cash, people will need to understand the interest rates theses types of loans charge; an interest rate which is considerably greater than an interest rate that’s paid on a personal loan.
It’s easier to qualify for a payday loan than it is for a private loan, which means that payday lenders are assuming more risk in the loans that they issue. This risk is passed on to the borrowers at the high rates that they charge. The only requirements that some lenders of payday loans ask for are that a borrower has a job, a bank account and that they are of legal age.
The interest rates that payday lenders charge for their payday loans could lead to an APR in the triple digits. The speed is generally presented as paying so much money for every one- hundred bucks that a person borrows, an amount that’s normally in the twenty to thirty dollar range per hundred. As an example, on a million dollar payday loan which charged twenty bucks on the hundred, a debtor would be paying back a total of twelve-hundred dollars, a thousand dollars principle and two-hundred dollars in interest. The corresponding APR on this case would be 521.43%.
Payday loans are quite expensive; however, there are a number of advantages to a payday loan compared to a private loan. A personal loan requires a credit check, and it could take a while to be approved for the loan. A payday loan does not require a credit check, and usually, a borrower gets approval within a day and has their cash within 48 hours. This is an advantage to someone facing a fiscal crisis. Another advantage to a payday advance is that there’s that payday lenders are more lenient in their lending practices, a person with poor credit that is turned down for a personal loan could have an easier time being approved for a payday loan. It’s not tough to fulfill payday lenders requirements; just a job and a bank account and you’re set. There’s also the advantage of direct deposit; some payday lenders will deposit the loan right into your bank account.
Even though a payday loan has its advantages, borrowers do not need to forget that the advantages have a price. Someone considering a payday loan should be for less expensive options before taking out a payday loan Singapore. If you can avoid a payday loan, avoid it.