What is a Payday Loan, and Why Do You Need One?

Financial emergencies come unannounced, and you might feel helpless if you do not have enough cash. It is common for people to take a loan from money lenders like Bugis Credit to meet financial emergencies.

What Is Payday Loan?

A payday loan is a short-term, unsecured loan typically repaid on the borrower’s next payday. Payday loans are often used by people who need money quickly and do not have other options. These loans are sometimes called “cash advances” or “check advances.”

Why Do You Need One?

Payday loans can be helpful in situations such as:

– Unexpected medical expenses

– Car repairs

– Emergency home repairs

– Unexpected expenses related to a family emergency

How Do They Work?

Payday loans typically work by having the borrower write a check to the lender for the money they want to borrow, plus any fees and interest charges. The lender then holds onto the check until the borrower’s next payday, at which point they cash the check, and the loan is repaid.

Some lenders like Bugis Credit also offer “rollover” features, which allow the borrower to extend the loan for another pay period by paying only the fees and interest charges. This can be helpful if the borrower cannot repay the full amount of the loan on their next payday.

What Are the Fees and Interest Rates?

Fees and interest rates for payday loans vary depending on the lender and the state where you live. In general, fees are typically 10% of the loan’s principal when a loan is granted, and interest rates are usually around 4% per month.

What Are the Eligibility Requirements for a Payday Loan?

To get a payday loan in Singapore, borrowers typically need to be employed and have a bank account. They will also likely need to provide proof of income and identity. Lenders may also have other eligibility requirements, such as minimum credit scores or income levels.

Check with your specific lender for details on their eligibility requirements.

How Do You Apply for a Payday Loan?

Applying for a payday loan is typically quick and easy. You can apply online or in person at most lenders. When applying, you will need to provide basic information such as your contact information, employment information, and bank account details. Some lenders may also require additional information, such as proof.

What Are the Documents Required for Payday Loan?

Here are the documents you need to submit along with the Payday loan application.

  • Identity card / NRIC
  • Proof of residence (utility bill, a letter addressed to you, and tenancy agreement)
  • Proof of employment (certificate of employment or three months’ recent payslip)
  • SingPass

If you are a foreigner in Singapore in need of a Payday loan, you will need the following documents.

  • Passport
  • Work Permit / S-Pass / Employment Pass
  • Proof of residence (utility bill or tenancy agreement)
  • Proof of employment (certificate of employment or three months’ recent payslip)
  • Proof of income (bank or account statement)
  • SingPass

Payday loans can be helpful in situations where you need cash quickly and do not have other options available to you. However, these loans come with high fees and interest rates, so it is important to shop around and compare rates before taking out a loan. Also, understand all the terms and conditions of the loan before you sign anything, as payday loans can be very expensive.

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