Want to take a payday loan but are not sure how you’ll pay it off smoothly?

At certain times, a payday loan, offered by almost every money lenders in Singapore, is a good option. You will have no trouble in making your payday loan go smoothly if you keep in mind the following four tips.

Ensure that the alternative is less costly as compared to a payday loan

Here’s an example to illustrate the point. Let’s suppose you didn’t receive your full pay because of some error on your employer’s end. Your employer will credit the remaining amount in a few days, but the problem is that you already have 3 bills that are due today. In the event of a bounced draft, you’ll have to pay a fee. You’ll also have to pay a returned draft fee to the company you owe.

Let’s assume your bank charges a fee of $10 for a bounced draft and the company to which you owe also charges $10 as returned draft fee. So, in that case, the total amount you’ll end up paying in fee on all 3 bills will be $60. Now in case, the payday loan costs $70 it is best that you don’t take it.

However, in reality, banks charge much more than $10 as a penalty on each bounced draft, and the same goes for companies. In fact, total amount incurred to you in the form of fines and fees could be a few hundred dollars. If the fee of a payday loan is less, the prudent thing to do will be to take the loan.

Pay off your payday loan with the next paycheck

It is important that you don’t extend your payday loan. Doing so will make the loan costlier than it is. Payday loans typically have a steep interest rate, and if you delay paying it off, you will have to pay quite a good deal of amount extra. Therefore, ensure that you don’t borrow more than what you can pay with your next paycheck. And once you’ve borrowed enough, resist the temptation to extend the loan. All that is required to repay the loan as promised is a little bit of cutting back on your expenses and financial discipline.

Don’t borrow more than you need

A payday loan is for meeting a short-term financial crunch or emergency. It is not a solution to a long-term financial problem. Therefore, use payday loan judiciously. For instance, if you are facing a sudden but not huge expense which you can’t delay during the last week of the month, you might consider taking a payday loan to meet that expense. However, if you want to go on a week-long vacation but don’t have the required funds, it is best to delay your holiday unless you’ve saved enough. The other thing is to ensure you don’t borrow more than what you need.

Do your research

Different licensed money lender in Singapore charge a different interest rate. Therefore it is best you do a little bit of research to ensure you get a good deal.