Acquiring loans in Singapore is easy since they come with different plans for various package products. Licensed moneylenders, banks and other loan companies each offer a kind of loan for the different clients. To narrow it down here are differences between payday loans and credit card advances.
Credit Card Advances
The credit card advance depends on the accessible credit limit on your credit card. This is instead of basing it on your monthly salary. The credit card advance is normally treated same as a purchase made using the credit card. It has strict repayment terms.
This cash advance might or may not give you a good deal than payday loans. This is however dependent on your credit score and if you qualify for the credit. A few credit card institutions might ask for higher interest on the cash advances when compared to moneylender payday loans.
Usually, the cash advance loans are included in your credit card monthly bills and need to be settled accordingly. The card advances interests are compounded every day. Thus they need an application fee whenever you apply for a loan.
This is known as a short-term type of loan. It lets Singaporeans take up loan amount depending on their wages. A minimum income cap is set each month based on the lender rules. Also, borrowers with little higher verifiable salary are able to access more money.
The payday loans are also known as “payday advances” or “personal loans”. They are an example of the unsecured loans. This means borrowers do not need any collateral. They are issued depending on your salary. They are customized to a borrower’s capability to repay in a given period. At times loans may be repaid in several split payments. However, you are expected to repay the whole amount plus the agreed upon interest.
Accredited moneylenders give payday loans and their interest rates will vary from lender to lender. The biggest benefit of payday loans is the adjustable and negotiable repayment plans. Thus it will largely help you in managing your finances so you will better plan your finances.
Compare and Choose Wisely
Occasionally, payday loans can carry higher interests than cash advances on credit cards. It is because moneylenders have higher risks when the loan are repaid.
But, when you are a repeat customer and have a great record of punctual repayment. The legal moneylenders will normally give a better repayment rate or policy to you. In hindsight, you can talk with loan officers then they will customize a suitable repayment schedule for you.
Payday loans provide great flexibility as far the repayment policy and loan periods are concerned. For this reason, it is better to utilize the payday loans. This loan type has no hidden costs and they allow lower-income Singaporeans who cannot access credit cards, get a loan.
Therefore, choose wisely depending on your financial requirements thus make the best choice for you. No matter the loan product you would like to get. Ensure that you do research, check out the reviews and look at what competitors are offering.