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Personal Or Payday: Which Loan Is Right For You?

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The holiday season, a family emergency or the last minute vacation. You and many others have been there in the past; so, what do you do when you do not have this cash in hand? Do you go to a licensed money lender in Singapore that are legally fully authorised by the Ministry of Law for a personal loan, or turn to a pay day lender when you need cash now? Is one superior to the other, and are you going to find a higher lending limit with one or the other? You are asking these and so many other questions as a borrower; so, how do you go about finding out which of the two is right for you, if either, and how do you know which lender you should go through when the time comes for you to apply for your loan? We are going to go through this, and any other information you might want to know as it relates to these loans. And, from there, you can decide how to deal with your emergency, how to go about funding your vacation, or which of the lenders is going to be the right one for you to apply with, when you are ready to apply for either type of loan.

What is a Pay Day Loan

It is a short term loan; as the name implies, you are taking out a small chunk or amount of cash, for a short period of time. You are going to repay the lender by pay day; you are only borrowing for a very short amount of time. With this loan type, you are going to be paying a very high interest rate, so high that it is not even worth applying for a small amount of cash in some cases. You will also find that with this loan type you are not required to go through a credit check; so, for those who do not have stellar credit, this is one of the more popular loan types, as it does afford you the cash you need right now, and you are not going to have to run a credit check when you are applying for the loan. as it is a short term loan, you are also going to be approved within hours in most cases, for the amount you do apply for. And, it is usually one of the loan categories which is going to offer the lower sums of cash to the borrower. As it is a riskier category, the lender is not as willing to lend more, so you are limited in how much you will be able to take out with a particular lender, when you decide to go with this loan category for the cash you need now.

What is a Personal Loan

This is a loan which is extended in cases for consolidation, or in cases where you need cash right now. A loan in this group is easier for you to be approved for than a bank loan. With this type of loan, a lender is usually going to require a borrower to make five times as much as they are applying for. So, unlike a pay day loan, you are going to have your income checked, and there are caps in place based upon how much you earn as a borrower.

Repayment terms are typically up to 5 years, so you also do have a longer period of time to pay back the amount you are borrowing with a personal loan, than you are going to have with pay day. It is also different in the sheer fact that you can go with a licensed money lender; so, you know the money you are borrowing is protected, and you as a borrower, are also protected in the event of a default. You have less risk with this type of loan, you can borrow more, you can use the funds for what you want, and you are dealing with licensed lenders, so you do not have to worry about scams or other issues, which are sometimes associated with the pay day loan in many areas in Singapore.

A personal loan is a great way to consolidate your credit cards; if you owe several cards, you can make one payment and reduce interest rates with a personal loan. It is also a good way to fund a pricey purchase, and have a reasonable amount of time to pay it off. There are several terms and variables you can and should consider, when the time comes to choose a lender for your personal or your pay day loan. As a borrower, it is important for you to know how each functions, what you can do with the cash, how much you can apply for and borrow, and all other terms which revolve around the funds you are going to borrow with a lender. You have options, so as a borrower, it is up to you to take your time to compare, and learn about lenders, so you do make the right choice when you are ready to apply.

You have to know your other options. Student loans are a great low interest option, but of course you have to be a student. A bank loan is also a viable route to go, but if you are contemplating a personal or pay day loan, it is likely because you are not going to be approved as a borrower through a bank, so you have chosen to go with these alternatives as a borrower.

It is important you fully understand the terms, how you can use the funds, repayment, and lending limits. With the personal loan you are dealing with less risk and higher returns. If you are deciding which is the best route for you, it is important to consider everything; and, in some cases, approval is a big issue so many people are limited. No matter what route you go, before you do choose a lender, take the time to compare a few, their terms, and understand how lending and repayment works, so you make the right decisions when borrowing loan categories.

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