How Many People Use Payday Lenders And Why

how many people use payday lenders who gets approved fast cash loans

An interesting question. Isn't it? Before we talk about who uses payday loans and why we first need to understand what payday loans are. Well. These are short - term loans that are expected to be repaid within the next payday. The loans were designed to help individuals deal with emergencies. These loans have become quite popular not only in Singapore but even across the world. The recent surge in popularity of these loans is attributed to the ease of access and approval. This shouldn't be a surprise because consumers will go for the loan types that they can quickly be approved for. Payday loans can save you a big deal. But at the same time, they can predate on your financial situation. It would be best if you were careful whenever you want an instant cash loan online. This is something we are going to examine in detail throughout this discussion. The question of interest is – how many people use payday loans and why? As you go through the blog, try to find out why it may not be appropriate to rely on payday loans. Well, let us begin. 

The Number Of People Using Payday Loans 

A recent study on the Singaporean borrowing sector indicates that 5.5% of the adults in the country have at least used payday loans within the last five years. With a population of about 5.8 million, around 319,000 Singaporeans have used payday loans. As we earlier stated, these loans are often used when individuals are in urgent need for cash. That is why sometimes they are referred to as cash advances. While the loans were originally meant to help individuals deal with emergencies, individuals have deviated from that and no longer primarily use them for emergencies. Most people use them to cover rent, grocery, and other expenses. 

Since these loans often have high rates of interest, it isn't very easy for individuals to repay them in time. This is exactly where financial woes begin. Since it becomes difficult to repay the loans in time, individuals often find themselves in something called the vicious circle of debt, which is extremely difficult to break free from. In other words, the short - term loan from a money lender in Singapore may end up being long term. This is something you need to guard against. Since the loans have high - interest rates, making them long term. This mean s you are going to pay an extremely high cost for using them. 

The APR for payday loans is at least 390% but can go even up to 1000%. How does this affect borrowers? Well, as we earlier stated, the higher rates make it challenging to repay the loan. However, there is always a provision to rollover the loan. If you take the option of rolling over the loan, you may have to pay even higher costs than you'd expect. For instance, in case you owe $100, and you choose to roll over, you will be required to pay an additional $30. Imagine having just five rollovers in a year! It means you will have to pay the extra cost of at least $150 plus the initial borrowed amount, making it $250. Is this too much for a loan in Singapore? 

Many people take payday loans thinking they will repay once they receive their pay. But once they make the first payment, they fall into a deficit that compels them to reapply again. This is how they find themselves the vicious circle of payday loans. It is challenging to borrow money online. By way of review, how many people use payday loans? We may not tell the exact number with certainty, but statistics show around 5.5% of Singaporeans have used them in recent past. But the question was two - sided. So why? 

Why Singaporeans Use Payday Loans 

We touched a little bit on this in the preceding section. While the loan is primarily meant for emergencies, most people use them to cover such expenses such as rent and grocery and other fees. But there are other solid reasons why people use payday loans today. The following are so me of the top reasons why. 

Persistent Financial Suffering 

Have you ever asked yourself about the connection that exists between being broke and sadness? You definitely wouldn't want to suffer in the times of unemployment since it can be financially and emotionally distressing. You might even get one scrounging the funds together. In this case, payday loans may be attractive for several reasons. For instance, you will get access to the funds relatively faster. Second, you will be in a position to keep up wit h the lifestyle you had before unemployment. Third, there is a psychological benefit, in that you might feel the redundancy isn't a big deal. 

To Consolidate Loans 

Some individuals take up payday loans to consolidate debt. Undeniably, it can be quite challenging to deal with a lot of payments each month. Individuals take one large payday loan and use the funds to repay other loans. In the end, they only make one payment each month. 

To Avoid Embarrassment 

Payday loans are quite expensive, and people know that. But why would they still prefer them rather than considering such options as borrowing from friends and family members? The fact that taking payday loans means the funds are owed to an institution and not to an individual they know helps to avoid embarrassment and appearing vulnerable before friends and family members. 

For Holiday Loans 

People express their love through gifting during festive seasons. Most Singaporeans are often desperate in such periods, dealing with the urge to busy kids everything they want. Payday loans are usually taken as solutions to finance holidays. While it might appear sensible to borrow and repay when the year begins, many parents over do that. 

As Loans For Bad Credit

Most individuals taking payday loans have bad credit and therefore, cannot be approved for loans by traditional lenders such as banks. Payday lenders do not pay much attention to credit history and credit score. Proof of income may be enough for many lenders. 

Need Aid? Get Paid! 

While payday loans are quite expensive, a lot of Singaporeans use them. There are various reasons why individuals use these loans. Some of them may be justifiable. However, they will only damage your financial status. Before applying for payday loans, consider other better alternatives at you r disposal. For instance, you can borrow from friends and family members, or ask for an emergency loan from your bank. Take payday loans only when it is necessary to do that.

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