Financial emergencies come knocking on your door when you least expect them. That is why trying to deal with them may be quite challenging, especially for those living on their paycheck every month. The problem becomes severe if you don’t have enough money in your contingency fund.

What should you do then?

If you have a friend or a family with whom you can fall back, you should try to approach them for help. However, there may be situations where there’s no one you can contact for help. To make matter worse, applying for a bank loan in such a situation is hardly feasible. Banks take a long time to process a loan application, and they can’t be any less bothered about your situation.

Taking a loan on your credit card is an option—but it is a costly option and moreover banks, again, takes too long to process loan applications.

If you need a short-term loan that you can pay off with your next salary, one option you should seriously consider is a payday loan. All legal money lenders Singapore offer this type of loan to suitable candidates. The biggest advantage of this loan over others is the speed of approval of the loan. You can get a payday loan within a day or two, and sometimes even on the same day.

Who’s eligible?

As the name suggests, a payday loan is given based on salary. Almost everyone that is employed is eligible for this loan. However, the maximum amount you can borrow depends on your salary.

You can get this loan even if your credit history is not good, as long as you can submit a proof of your employment. So this is another big advantage of a payday loan. People with bad credit can also avail it.

Pointers to keep in mind

When taking a payday loan, remember certain things.

• A payday loan is meant for a financial emergency and is not a long-term financial solution. Furthermore, if you are taking a payday loan almost every other month, you should take a serious look at your spending. This loan is for emergencies; you should not make it a habit.
• You should pay off the loan with your next salary. Like other loans, a payday loan comes with an interest rate—and a pretty hefty one at that. Therefore, you should take only what you can repay with your next salary. Don’t give into the temptation to extend the loan by paying a small amount or bare minimum. This way you will end up paying a lot more than the original amount.
• Do some research to ensure that you get the best deal. Different money lenders might offer you the same loan at various rates. Therefore, by looking around a little, you can get a better deal. Lastly, always take a payday loan or a personal loan from a legal money lender.