Advantages and Disadvantages of Payday Loans

Advantages and Disadvantages of Payday Loans

When you decide that you need an immediate funding for bills and short term expenses, payday loans are one of the most sought for loans to make ends meet. Payday loans are initially intended to address emergency situations where the income falls short of expenses. To understand more about payday loans, here are a few advantages and disadvantages you can review.

Advantages:

  1. Easy to obtain loans. Payday loans are easy to obtain. With minimal requirements you can get a payday loan. All you need is a secure employment and a consistent source of income. You can fill up and complete an application form and processing should be easy.
  2. Quick release of proceeds. Being an easy loan to apply for, it also provides a the borrower the funds within 24 hours from time of application. No other loan can provide approval and processing this quick.
  3. Provides loan without credit score references. This is one loan where your credit score does not matter. As long as you have the capacity to pay and employment, then you have a good chance you get approved.

Disadvantages:

  1. Payday loans can be expensive when rolled over. Payday loans are meant to be paid immediately. If you roll over your credit occasionally, it will offer you a way to a spiraling debt. This is one reason why payday loans should be settled immediately.
  2. Fees for payday loans are unclear. Although the government provides regulations on how a personal loan singapore licensed money lender should operate, payday loans offer unclear interest rates among each other. There is no standard rate to be followed, only a cap. In this case, lenders can charge so much that it can abuse the cap provided by the government.
  3. Fees are high. If you decide to roll over your credit, most probably you will be paying for high fees. In this case, it can cause another effect of falling short next month.

Payday loans have proven to be tricky loans to settle but they can also be effective ways to raise funding for emergencies. Manage your payday loans well and there shouldn’t be a problem of getting into debt.

5 Valuable Facts When Getting A Personal Loan

5 Valuable Facts When Getting A Personal Loan

When you find yourself in a situation where you need extra money to be used for an emergency or large purchase, most often a personal loan comes into mind. Getting a personal loan can be both good and bad. To avoid any bad outcome on getting a personal loan. Having knowledge is the best way to go about it. Here are some facts about personal loans that can help you weigh in on your decision to get one.

  1. Keeping your amount to be financed at a minimum brings a better deal. If you have extra cash that you can spend, use it and just get a personal loan to add for the amount that comes short. Having a lower amount of loan creates a lower interest rate and less cost on borrowing the money.
  2. Only take the loan when you really, really need it. Don’t get a loan on a not so important matters like buying clothes from any online shopping store when you have the extra cash you can spend. If your extra cash is just sitting in a bank or even under your pillow, use it instead of getting a personal loan. This will save you a ton of money paying for interests.
  3. Research on lenders and banks who can give great deals on personal loans. One way to take advantage of the age of internet is having the information very accessible wherever you go. Researching on your lenders and banks can help you find the best deals available.
  4. Work on the 3 C’s that your lenders will look into. The 3 C’s that money lenders in Singapore and other bank look into are “character”, “capacity”, and “credit”. Lenders and banks will want to know the character of the person they are dealing with. They will definitely investigate on your capacity to pay and how you deal with credit. If you want to make sure you get the loan approved, work on your 3 C’s.
  5. Reading your contract and other documents before signing can save you more than you can expect. These contracts and documents often have fees that can be done away with. Reading before signing allows you to be able to negotiate and let go of any fees that are not really needed in the loan application.

5 Things to Consider Before Getting a Business Loan

5 Things to Consider Before Getting a Business Loan

As businessmen, it is inevitable to consider getting a business loan to fund a project that is in line with our business goals. Some entrepreneurs even consider it as a strategy even if the business has enough money to support the spending. Business loans can help fund the growth or expansion of operations. With a good strategy in place, business loans can fund a spending and yet the cost is distributed within a specific period.

Business loans are great tools for businessmen. If you are planning or considering getting a business loan, it is good to know how it works and how it can affect your business.

  1. Business loans require business plans.

Not all but most of the business loans require a business plan in place. Banks are known to review business plans reflecting projected earnings and cash flow. The reason most lenders and banks require a business plan to be in place is to ensure that the borrower is aware of how to pay off the loan through a good cash flow coming from the business.

  1. Lenders and Banks look into your personal financial details as well.

If you are a single proprietor or partnership, the lender or bank will also look into the owner’s personal financial details. Finances of business and owners are considered one and any loans against the business is a personal liability of the owner. This is one reason why an owner needs to make sure that his credit is in good standing when getting a business loan.

  1. Requiring a collateral

It is almost impossible for a lender or a bank to grant a business loan to start up businesses. In some rare instances, business loans are granted to startups with a condition that majority of the capital is the business owners money. In addition, banks and lenders require a collateral to support the amount being loaned.

  1. Credit Rating for both business and owner.

When applying for a business loan, credit rating is greatly considered. Credit scores for both business and owner are being reviewed by banks and lenders. It is important for the bank or lender to know the integrity of the business and the owner when it comes to credit.

5 Facts About Payday Loans

5 Facts About Payday Loans

Payday loans are one of the most common loans that are being offered in the market today.  Unfortunately, people who borrow payday loans mismanage the debt and often fall into the trap of spiraling debt that keeps them from getting back up. Instead of looking form more income, what happens is that they go into more debt to pay existing debt. This rolling debt becomes one big liability that borrowers fail to manage.

Understanding about payday loan can help you avoid getting into the trap and allow you to maximize the use of a salary loan.

  1. A borrower of a payday loan often ends up rolling off existing debt for a new one. Most payday borrowers, according to statistics, roll over their credit to the next period and often makes a payday loan up to 8 times in year. This creates more fees to be paid and higher cost on borrowing the money.
  2. Around 60% of payday loan borrowers end up paying more in fees than the total amount loaned. This is because the borrower keeps on rolling over the debt where interest applied monthly includes the previous months fees and principal amount. Remember that payday loans are intended to be paid on a short term, rolling it over and treating it as a long term loan can grow the fees to unreasonable amounts.
  3. Many payday loan borrowers end up paying the entire debt after 3 to 4 months by rolling it over despite having it due within 14 days. Because of poor management, borrowers tend to liquidate the entire debt way beyond the original due date and only roll over their loan every time it becomes due.
  4. Payday loans are one of the youngest loans that emerged hence improving along its journey. Because of its young nature, payday loans are so flexible since limited regulations apply to it. Most payday lenders can contest on areas where there is no specific regulation.
  5. Payday loans are so easy and accessible that their number increases drastically every year. But despite of how easy getting a payday loan is, it is very important that a borrower approaches a licensed lender or even a bank. This will ensure that the borrower is protected and that the lender is operating under proper regulations.

4 Questions You Need to Ask When Getting a Payday Loan

4 Questions You Need to Ask When Getting a Payday Loan

You have your salary used up for paying out all the bills and expenses that are budgeted to be paid for the month. Unfortunately, there is a health emergency that has occurred that you have encountered. Getting a payday loan can often help you bridge the gap between income and expenses. These are ways you can use to help you get by.

Payday loans are easy to get loans that have simple processing. Often, these loans can be approved and released within the day. Getting a payday loan may sometimes be the best solution, especially for expenditures that involved time constraint. But before you do get a personal loan, here are a few questions you can ask to make sure you are making the right decisions.

  1. Is payday loan the only thing I can resort to?

We often find ways on how to manage our income shortage and I discourage getting a payday loan unless it’s the last option you have. Try borrowing from friends or family first or trying to find an alternative loan. Borrowing from family and friends can often get you off the hook of having to pay for interest.

  1. How much do I pay back?

Understanding how much the total cost of your loan is will help you get motivated to pay it back. Soon as you find the amount you need to pay compared to the amount you received, it is something that will encourage you to work it off and pay your loans.

  1. How much do I need?

You will need to understand how much you need. If you can compute for the exact figure, get the exact figure and make a loan amount for that figure. Understanding how much you need will help you minimize any additional cost. If you borrow too much, you will end up paying for the interest on the excess amount.

  1. How much can I borrow?

Knowing how much you can borrow will give you an idea of the value your current credit has. Having a very low loan amount only tells you that you need to reevaluate your credit worthiness.