Payday loans have a somewhat bad reputation and with good reason.
There are many loan companies that have predatory practices, with excessive interest rates, hidden charges, and debt traps.
However, not all payday loan providers are predatory, and payday loans certainly have their own advantages as well, which is the topic of this article.
To balance things out, we will also discuss the disadvantage of payday loans. But before that, let’s start with the advantages first:
The advantages of payday loans
- Borrow money fast
One of the advantages of taking out a payday loan is that you can get them extremely fast, with no long waiting periods before you can actually get the money. This makes it great when you need money quickly, such as when you need to do an unexpected purchase, have an emergency, or need to pay rent for the month.
Payday loans provide a quick way to receive the loan funds. The majority of payday lenders makes an effort to send you the money immediately after the approval of your loan application. In comparison with loan applications, such as for a credit card, it can take you weeks or even months before you can receive a credit card. This makes them unsuitable for emergency or urgent expenses. Various other methods of financing like taking a collateral loan or vehicle loan also need more requirements that will take a long time to obtain, in addition to the loan taking weeks or months before being approved and released.
Having said that, take note that the speed of your approval is dependent on whether you submitted all the required documents or not. Many loan companies will inform you in a timely manner if your application is rejected so that you can go and start looking for another loan provider.
- Easy application process
Compared to other types of loans, payday loans have an easy application process, intended to be very easy and simple. For this reason, people who want to take a loan is able to do so online. Licensed money lenders like GM Creditz provides online application and approval, so you will be able to take out a loan even without physically going to their office. This online application option also provides another advantage, which will be discussed next…
- Payday loans offer some level of privacy
Payday loans provide some secrecy if you have to take out a loan. Obviously, you will be required to provide your actual name, employment details, and other essential information to a lender. However, with online applications, you will be able to take out a loan without physically appearing at a lending office or borrowing money from a friend. Additionally, some payday loan companies do not conduct character checks that require calling your family members and workmates, which your loan activities will not be divulged to other people. If you want to keep your financial situation a secret, a payday loan is good for you.
- You can apply for it even when you have a bad credit score
A payday loan is always an option for people who have a bad credit rating. A personal loan might have low credit score requirements, however, it still requires you to have a good credit score. Don’t even bother asking about bank loans if you have a bad credit score. A personal loan, on the other hand, is available to anyone, even those who have a low credit rating.
- High-interest rates
This is one of the reasons for payday loans having a debt trap reputation. If you fail to make a payment, you will be fined with high interest, and you will be required to take another loan from the same loan company to pay your previous loan, effectively “trapping” you in a debt trap. However, this can be mitigated by carefully reading the fine prints on the terms and conditions of your loan, and making sure to pay your dues on time.
Even though rates of interest for payday loans are high, that doesn’t mean that you wouldn’t be able to pay it on time. As long as you manage it properly, you should be fine taking out a payday loan. You might be required to sacrifice some purchases you want to do later to avoid financial issues, however as a temporary remedy to your financial problems, a payday loan is a possible choice.
- Not ideal for people with no income
It could be appealing to attempt to have a loan to get out of your financial issues. However, if don’t have a regular income, taking out a payday loan is not recommended. Always remember that you have to pay on time when you have a payday loan, and you can only assure that if you have a regular source of income.
- It is easy to loan more than you can pay
A payday loan is not recommended for people who have low self-control. Even though salary loans are easy to get, bear in mind that you need to pay back the money, and you certainly did not earn it. If you just keep getting loans after loans and spending it on unimportant things, with no planning for ways for repayment, it is possible to have severe financial issues later.
Finding a balance between luxury and loans is a must. It is okay to have fun by having treats to yourself once in a while, but do not go overboard. Do not get loans that are more than your paying capacity. It is better to live a balanced life, with some treats every once in a while, than live an extravagant life until your loaned money runs out and have trouble paying it for months to come.
Are you looking for the best payday loan Singapore? Gm Creditz provides payday loans with fast and easy applications, fair terms and conditions and affordable interest rates. Click here to visit their contact page.