What You Should Know About Payday Loans

One of the easiest way get immediate cash is for you to apply from a money lender who offers cash advances against your salary. Normally referred to as payday loan, this type of salary loan are short terms and need to be repaid within 15 to 30 days. Defaults will mean additional fees or charges and additional interest will be placed on the outstanding loan. The loan process requires the borrower to provide the lender a post dated check which normally coincides with former’s salary date. Aside from a post dated check, the borrower can pay the lender in lump sum or allow him access to your savings account where he can withdraw the amount borrowed when maturity date arrives.

 

Eligibility for Payday Loans

 

Anyone who has a job or any stable income qualifies to get a payday loan. payday loan instant cash is an easy access loan because lenders only require proof of income and an I.D. from the borrower. Payday loan can be likened to money lending kiosk. They are found everywhere usually within stone throw from sites of blue collar workers who are normally their clients. Payday loan incur very high interest rate, so it is best that you seriously think about whether there is really a need for you to get this type of loan.

 

Immediate Payment on Payday Loan is a Must

 

Getting a payday loan can be very detrimental to the borrower and his financial stature. If the borrower is unable to repay back the loan on the agreed date, the borrowers’ only recourse is to restructure his first loan which will entail another set of fees, charges and interest. If you are trapped in this kind of vicious cycles, you will end up paying as much as four times your original loan. It is therefore very important that you will have the money to pay the loan once the maturity date arrives. However, payday loan are legal and guarded by laws, so if the borrower thinks he has been unfairly treated by the lender he has the right to file a complaint against the erring lender in.

 

Effects Credit Card can Have on Your Financial Situation

Habitually using personal loan as a way out every time you run into a financial crisis can have a very bad impact on your financial situation. You may find yourself overwhelmed with debt if you continually use borrowing as a solution to money problems. Continually going to a licensed money lender may bring you to the poorhouse and may even lead to bankruptcy. Borrowing money often is the most common reason why many people end up getting very low credit rating; being tagged as a bad credit risk or worse you ending up filing for bankruptcy. Another cause for why people end up having the worst financial crisis is abusing the use of their credit cards.

 

Credit Cards is an Easy Solution to Money Problems

 

People must remember that credit cards are only helpful in purchasing low cost items. This is to allow the card holder to easily manage the debt and ideally to zero out the account balance each month. The problem with people when using credit cards is that they also use it to cover large amount of financial needs. For instance, using a credit card to make a down payment on a car is inadvisable because the interest that it would incur would be so prohibitive. It would be wise consider these few things before you even think of using plastic for large amount of purchases.

 

Things to Consider

 

Before using cards to pay for purchases that are very costly, consider the terms and condition legally required by the card provider. You will note that fees, charges, and interest rates are highly influence by the amount of purchase that you do on the card. So the higher your purchase amount is the higher the fees and other charges will be too. Also take note of the “no interest” clause because there is no such thing. If there is, the offer usually have a time frame and it is usually won’t exceed 30 days which doesn’t give you much time to look for cash. More importantly, using the card continuously will cause a downgrading of your credit rating.

The Most Suitable and Affordable Credit for You

If you’re in the market for a personal loan, don’t go half cocked and apply with the first offer that comes your way. Borrowing money with the help of a reliable money lender singapore review is a very serious matter because it can very well create either a positive or negative impact on your financial situation. If it is really necessary for you to get a loan make an analysis of the type of loan that would suit your needs. There are different types of loans that are available and each one has different options, costs and terms. It is important that you understand all of this loan traits in order to get the best loan deal in the credit market.

 

Knowing Which Type of Credit Will Suit You Best

 

There are many different types of loans in the market and you need to know and understand. This is to enable you to select the best type of loan that would satisfy your need and at the same time have minimal effect on your income when you start paying off the loan. The following are some of the options open to you.

 

  1. If you want to buy something for yourself but would want the payment to be flexible, your best bet is to use a credit card that offers 0%. However, you need to be warned that 0% options are usually limited to a very short time which is usually from the time of the purchase until the end of the current billing month.
  2. A personal loan is best if you want a loan that can be paid on a monthly basis. Loans of these types require a minimum loan amount and terms of payment (which is usually one year).
  3. Overdraft or Line of credit is a good choice if you would want a loan that is small and would want to pay it back in a matter of a few months.
  4. Debt consolidation loans are best used to consolidate several debts of yours into one.
  5. Credit Unions are the best financial sources when you cannot borrow money from traditional lenders or if you are tagged as a bad credit risk.

Common Reasons Why People Apply for Loans

Borrowing money is so common nowadays and there are actually five major reasons why individuals seek out some form of credit. According to Lloyds Lending Report, 27% of those who borrows use the money to consolidate their debts while 26% uses the loan to purchase vehicles. The last 20% according to the report uses the money to make repair or improvements on the homes. Other reasons why people apply for the lowest interest personal loan is first, to cover unexpected expenses such as medical bills while the last percentage of borrowers use the loan simply to augment household expenses. One of the pitfalls of borrowing money is not being able to study the borrower’s current financial situation. This is usually the cause he ends up not being in default. Before borrowing take into consideration the following.

 

Consider These Things before Borrowing

 

First, think long and hard whether you really need some spending money. See if there are other ways by which you can cover the expense. If the expense is just to buy something personal, refrain or postpone the same until such time that you have enough surpluses to purchase it. Second, if you get the urge to buy things, take a couple of days to think it over. Giving yourself a lot of time to think about unnecessary expense is a good way to find out whether you need to purchase the item or not.  Always consider saving money as a priority options to spend. Analyze and study your cash flow and see where you can cut down on expenses. Having a good budget will help you manage and balance the ratio of your income and expenses.

 

Consider Saving as the Best Option

 

No matter how much small your income is, if you can manage it effectively and efficiently, there is no reason why you won’t end up with some surpluses. Instead of borrowing money, save whatever you can from your expenses. It may take a while before you are able to spend on what you need but this is a lot better than being in a bad debt situation.

Lending Money to Families and Friends

Lending Money from borrowing friends and relatives is really never a good idea. The main result is usually animosity between you and the friend (or relative) simply because the borrower has defaulted on paying back the loan. Some borrowers (not all of course) tend to be complacent in paying back loans they got from relatives and friends and this is because they feel that there won’t be any legal repercussion if they fail to do so. The friend or relative who lent the money on the other hand will now feel hurt and angry and these emotions between the two parties will cause a total breakup of the relationship so it is never really wise to lend money to friends or relatives. The only way to avoid all of this is to just give him the money if you can afford it.

 

Offer to Co-sign a Loan

 

Instead of extending credit to friends and relative, the better option is to offer to co-sign a loan with your borrower friend. However, you should only offer this to families and friends who you know very well and who you know would live up to the responsibilities of paying back the personal loan on time. Otherwise, you might just end up paying for the loan yourself. In most cases, the only solution of subtly turning down a loan from a friend is to simply say “sorry but it’s my policy never to lend money to friends and relatives”.

 

What Help can you Offer?

 

There are other ways by which you can help out a friend or relative who is in a financial bind. First you can help out by discussing other options in tackling the financial problem and if there is no other recourse except to shell out some cash, it is best to give an amount that you can afford to lose. In the event that you would have to shell out a sizable amount make it a formal loan and make an agreement with an explicit repayment terms. Immediately emphasize that even as a friend, there will be legal complications in the event that he defaults on the loan.