The high cost of living in Singapore extends to housing, medical expenses, and everyday necessities, making it challenging for those confronted with financial emergencies or cash flow issues.
In situations where you have impending bills and your monthly salary has not yet been disbursed, considering a payday loan could provide relief from substantial late fees and penalties on your outstanding bills.
What is a Payday Loan?
Payday loans are short, unsecured loan characterised by relatively high interest rates. They work much like an advance on your salary and are typically employed to cover immediate expenses, such as bills, rent, or unforeseen emergencies that cannot be deferred.
The maximum loan amount obtainable is generally limited to one month’s salary and is often swiftly approved, with funds disbursed almost immediately. Repayment, along with accrued interest, is typically due upon receipt of your subsequent paycheck.
Given the modest loan sums and convenient repayment terms, it can be tempting to consider multiple payday loans. However, exercising caution is essential when contemplating this approach, as managing multiple payday loans with varying repayment schedules can become overwhelming.
So, what actions can you take? Here are some recommendations for effectively settling multiple payday loans and to quickly pay off your debts.
Tips to Pay Off Multiple Payday Loans
1. Create a spending plan and arrange the amounts that you owe on your payday loans.
When it comes to dealing with many payday loans, having a solid strategy for one’s finances plays an essential part in the development of responsible loan repayment practices.
To get your payday loan repayment amounts organised, you will need to create a complete breakdown of your total outstanding debt along with the particular due dates for each individual loan. This structured strategy gives you the ability to proactively prepare for each repayment deadline, which ensures that you will clear the debt on time.
If you already have multiple debts to pay off, it is in your best interest to avoid taking out any more until you get your financial situation under control. Taking out new loans will simply add to the pressure you are already under. Failure to return a loan by the due date can result in the accumulation of late fees and penalties. Lenders have the ability to levy up to 4% of monthly late interest for each month the loan is unpaid, and these fees can add up quickly.
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2. Boost the amount of money you make.
Finding additional sources of income, such as taking up freelance or part-time work, which could put you in a better financial position to pay off these loans is another option to clear your debt more rapidly. One way to do this is to explore for additional employment opportunities.
3. Take out a loan to consolidate your existing debts.
A debt consolidation loan is an exception to the normal rule that it is not a good idea to take out additional loans in order to pay off existing loans. This type of loan lets you combine many debts into a single obligation, which means that you only have to focus on the repayment of a single loan rather than the repayment of several distinct loans.
Because of this, you will only have one set of loan repayment dates, which will make it much simpler for you to keep track of and remember.
Why Should You Consider Taking Out a Loan from Licensed Money Lenders to Consolidate Your Debts?
You can get a debt consolidation loan from a licensed money lender, which is one of the possible sources of funding for this type of loan, and this option typically comes with various benefits, including the following:
1. Improvements in management
When you get a loan to consolidate your debt, the lender will take responsibility for paying off all of the debt that you now have. Despite the fact that this does not wipe all the initial debt you owe, it will move all of your debt to a single lender, which will make it much simpler to manage and keep track of.
2. Space out your payments as much as you can.
To make your monthly payments more reasonable, several debt consolidation programs give you the option of selecting the length of time over which you will pay off your loans.
When compared to having to scramble to repay multiple payday loans within the same month, this enables you to settle what you owe at a more relaxed pace, freeing you from the burden of needing to do it in a timely manner.
3. Decrease the rates of interest.
When compared to many payday loans, which typically have much higher interest rates, a debt consolidation loan will almost certainly provide you with access to reduced interest rates.
Read More: 10 Smart Ways to Use a Personal Loan
Who Qualifies for a Debt Consolidation Loan?
Not everyone burdened with debt automatically meets the criteria for a debt consolidation loan. To be eligible, you must:
- Be a Singapore Citizen, Permanent Resident, or possess a valid Employment Pass or Work Permit as a foreigner.
- Be at least 18 years of age.
- Maintain employment, whether it’s full-time, part-time, freelance, or self-employment.
Satisfy the minimum income prerequisites established by the lending institution, which can vary among lenders.
If you find yourself grappling with multiple payday loans, you may need to find the best personal loan offers.
You may use MoneyIQ loan matching platform to find an ideal loan offer from best moneylender in Singapore that help you in paying off multiple payday loans. Start using our loan matching platform and results in minutes.
