Advantages and Disadvantages of a Personal Loan

A personal loan is an unsecured loan that may be borrowed from banks and other financial institutions such as licensed moneylender or loan companies to address different kinds of needs. It may be used for a purchase of goods and services, a down payment of a house or car, repairs or even used as a loan capital for putting up or enhancing a small business.

Unlike other best personal loans in singapore that are granted for a specific purpose such as car loan or ofw loan, a personal loan will depend on the borrower on how they intend to use the money. There is no limitation to how it will be used. As such let us identify the advantages and disadvantages of getting a personal loan.

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Advantages and disadvantages of a Payday Loan


A payday loan singapore is a type of salary loan that has a short term life, usually until the next payday, but yielding high interest rates due to its nature of being granted without security. Now is it good to get a payday loan and what will we have to look out for when try to get one.

Is it the best loan to get for our needs? Here are some of the advantages a quick cash loan has and the disadvantages that a borrower must be aware of to avoid any problems when getting one.


  • Quick Remedy – a payday loan can be granted quickly. This is the loan a borrower can get who needs cash within a very short time frame. It can be used to pay for a house or auto repair, paying debts that are becoming due, or even buying needs that will help you until the next payday.
  • Borrower Qualification – most payday loans do not require credit reports. These reports are usually the reasons why a borrower is declined. The reason they don’t require credit reports because lenders become a priority to be paid once payday comes.
  • Credit Score – a payday loan is a remedy that can be taken to pay debts that are falling due within a short time. Getting a payday loan to pay your debts instead of allowing the debt to become overdue allows the borrower to keep a good credit standing on the debt that is falling due.


  • Due Date – if you require time to pay your loan, this is not the loan that you should be going for. Payday loans are often due in less than 30 days, when the borrower’s payday arrives.
  • Employment – a payday loan’s priority is to get paid on the next pay date. That is why a lender requires they borrower to have employment.
  • Interests and Fees – one of the downside of a payday loan is its high yielding interest rates and big amount of fees.

Similar with other loans, Payday loans have its advantages and disadvantages. It is the borrower’s responsibility to check if the advantages fit their needs despite the disadvantages present.

Advantages and Disadvantages of a Credit Card

Who doesn’t see the importance of a credit card? BDO credit cards have been the pioneer payment methods that bring out convenience to both merchant and cardholder.

But with every powerful tool being used in the financial world, it takes responsibility to own one. Here is a few of the advantages and disadvantages of having and using a credit card.


  • Convenience – with almost every store now accepts credit cards as a form of payment, it proves easier to bring than having a bulk of cash especially when a cardholder is making a purchase that cost a large amount. Other than stores, credit card has opened the convenience of shopping in front of the computer rather than going around in stores.
  • Foreign Currency Transactions – credit card allows a cardholder to purchase products online. With a credit card, purchase of products that are stated in other currencies is possible and it will be the bank’s responsibility to pay the merchant in the currency it was bought.
  • Liquidity – credit card allows a cardholder to pay for goods that are urgently needed to be purchased despite having a shortage in cash. It can also address emergencies like hospital bills where a cardholder was not able to bring enough cash.


  • High Yielding Rates – credit cards are one of the types of debts that yield high interest rates. When a cardholder is not able to manage the debt properly, the interests earned are added to the fees which makes the debt difficult to payoff.
  • Spending Mindset – credit cards give the idea of spending instead of saving. A cardholder must learn that spending using a credit card takes responsibility. There are instances where a cardholder makes a purchase of goods that are classified as wants despite of not having enough cash.
  • Fee Complexities – using a credit card can be one of the most confusing tools that can be used for payment. Because of its nature, other than the interest rates, there are special rules on how these rates are applied. There are also rules that apply to certain actions which may cause additional fees. This becomes a challenge to an average workers who use the card without understanding the rules of its use.