Whenever personal loans singapore are involved, there will always be a positive and negative side. The average payday loan has become popular in low and middle income areas. Despite the risk, many people choose payday loans due to numerous reasons. If you want to apply for a payday loan, you must be aware of its pros and cons.
Easy Application Process
Payday loans are known for their quick and easy application methods. Typically, you can get the money in just minutes. Loan amount is a factor that’ll be considered by the lender but there seems to be no problems with variably low amounts. If the amount is higher, the lender may take extra precautions such as additional documents or careful review of the application.
High Approval Chance
You’ll be approved for guaranteed payday regardless of your situation. This is the reason why it’s called ‘guaranteed personal loan.’ Guaranteed payday loans became popular due to the high approval rate. Basically, 8 out of 10 applicants will have their loan applications approved.
Those ones who were denied probably don’t have jobs or any other income sources. Another probable reason is the limited funds of the lender. Many payday lenders run small-time operations, so their fund is not that high. To increase your success rate, you can go for direct payday lenders with established reputation and sizable funds.
Flexible Interest Rates
While some people claim that payday loans have large interest rate, that’s not always the case. Rather, payday loan rates are flexible and will adjust according to demand, economy, and the lender’s decision. If you have a target interest rate, you might have a hard time finding a lender. A useful strategy is to come up with a proper range. Any lender you find within this range should be a viable option.
No Credit Checks Involved
Guaranteed payday loan lenders don’t have credit check processes. This is one of the reasons why payday loan applications can be finished in minutes. Since many people feel uncomfortable with banks going through their credit histories, payday loans are acceptable. Even though payday lenders don’t have credit checks, they will still consider your current employment status, spending habits, and character.
No Collaterals to Worry About
Unsecured loans are also popular because of the no-collateral system. If ever you can’t repay on time, you need to pay penalties and other fees. Since payday lenders can’t seize any asset you own, they’ll just send collection agencies after you. While you can spend your days running from your debts, the agencies will always get what is due. Still, the fact that payday lenders don’t issue collaterals should give you peace of mind.
Outrageous Penalties and Service Fees
Personal loan lenders can offer a huge financial advantage by releasing your money instantly. Yet, you must do your part and honor the deal. If you can’t repay the loan, you’ll incur high penalties – higher than what commercial secured loans can even give you! It’s typical to see a borrower complaining about the obscenely high penalty rates of payday lenders. This is the norm, so you just need to deal with it.
Short Repayment Terms
Payday lenders can’t run after your assets if ever you can’t repay the loan. That’s why their loans often have short repayment periods. Typically, guaranteed loans must be repaid within a week or two. Others, on the other hand, will get your due on your next salary date.
Predatory Lending Caution
Predatory lending has been a big problem for hundreds of years. Apparently, predatory lending can be traced to payday loan lenders. While not all lenders are evil, you must still proceed with utmost care. You must research properly about the trusted lenders within your area. Also, don’t forget to trust your intuition – it can guide you towards the right payday lender.
Negative Reputation in Lending Communities
Mainstream lenders often view payday loans negatively. This bad rap comes from the credibility issues of many payday lenders around the world. Even though the bad rap can be backed up by many valid sources, you should be objective. Don’t consume rumors – just focus on solid data backed by convincing research.
No Privileges or Product Tie-ins
Big lenders, especially those offering commercial secured loans, often have a myriad of different privileges. Some of these privileges are incentives, gadget offers, and other accessories. Guaranteed loan lenders don’t have privileges because they rarely have big sponsors. You can still take your chances though, especially now that payday loans are getting more attention from the international lending scene.
Getting guaranteed payday loans is like holding a double-edged sword. You might get wounded, especially if you’re not careful. However, once you manage your guaranteed loan properly, it’ll be the quick solution to anys financial dilemma.