A payday loan is one of the easiest ways that we can resort to when we find ourselves going short on the current cash that we have.
Payday loans are short term loans that an employed individual can take, usually payable at the next payday. These types of loans are effective ways of helping us in filling the shortage difference between income and expenses.
But before we make any decision in getting a payday loan, like any other loan, careful planning needs to be made. Here are a few questions you need to answer before taking one:
When you are considering on taking a payday loan, it is important to consider if you there are alternatives that you can take. A payday loan has high interest rates due to its unsecured and short term nature. Sometimes taking on a payday loan will cause you more burden in the future because of the added interest (and other fees) on the principal amount.
Before making a payday loan, you will need to make sure you check all your options first. With high interest rates, making payday loans on a regular monthly basis to pay your bills can eventually grow your debt higher and higher every month which can eventually deplete your entire income.
With moneylending in Singapore, lenders who often provide this kind of loan are referred to as predatory lenders. A borrower gets deeper and deeper in debt as he continues to taking on loans on a regular basis.
How much you borrow on a payday loan is very essential. If possible, do not make a bigger loan every month as your debt will keep increasing. This will continue to cause you more burden and more expenses to worry about.
Payday loans are great tools if you are not using it to supplement your income regularly. Otherwise, this will just be eating up a bit more of your income every time.