Payday or Principal Reducing Loan, which should you Choose?

It is very likely that you will need a loan at one time in financial rough times.  You may also need money for an emergency need. Singapore is a place of opportunities so you may also need a loan for a quick business opportunity.

There are different loan products you can take on. Payday and Principal Reducing loans are the most popular loans on offer. They are quickly accessible and many lenders will ask for minimal documentation to process these loans. You may need to choose between a payday loan and a Principal Reducing loan when you need quick money.

Payday loan

This kind of loan is mostly for employed people with a regular salary. The lender issues the loan with the agreement that the loan will be repaid on the day the salary is paid.  You must show that you are employed and proof of income from the employer. The lender will take your salary amount to assess your repayment ability.

Payday loans are issued within 30 day cycles which are the payment cycles for many employed people. Interest rates are calculated by numbers of days though it is stated monthly or yearly with effective rate. Many lenders will issue a payday loan instantly on fulfilling the requirements.

If you are looking for a relatively large amount, a Principal Reducing loan is a better option.  You will also get longer repayment period and lower interest rates. If you are in need of a very quick loan, a payday loan is your best choice. You can have the loan the same day, the setback being need to pay back everything on your payday.  Choosing between the two loans will most likely depend on how much you want to save some interest.

Principal Reducing Loan

This kind of loan is accessible to anyone who are employed or with proof of income. Lenders will consider your credit history when reviewing your loan application. Most lenders will be reluctant to offer a loan if you have even a slight off your credit background but there are some who are willing to give you some bit of leeway.

Principal Reducing Loan allow you to repay your loan within a few months hence ease your cash flow every months for other consideration such as your monthly expenses.  Lenders are more stringent about the credit back ground of the person taking up a loan because they want to make sure the borrower will be in pink of health during the months of repayment. Any person with bad credit will not be able to sustain long enough as running into bankruptcy or taking into legal by any mean could jeopardize the repayment.

Netherless, you don’t need to worry so much enquires a loan.  You can always apply online and the listed moneylenders will contact you and discuss with them your situation. Is not obligated and service from them is always free of charge.

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