Methods To Loan Money: PayDayLoans

Posted by Kris | Sunday, July 07, 2013 | | 3 comments »



As a Chinese kid, growing up I was taught to never ever 1) borrow or owe money from other people. I am sure this resonates with many chinese readers out there. It is so well baked into the chinese mentality that borrowing/owing money is like swearing, cursing with bad words, something not to be done by a child.

The second advise that Chinese parents will typical nag about forever, is to 2) NEVER NEVER EVER borrow money to other people.

Well I agree with point number (2), it is always hard to chase back your money from the lenders. Especially super duper hard if the borrower is your own blood and relatives.

For point (1), I need to disagree with my parents. If possible, try to borrow as much of money for your investments especially for property investments where capital needed is high. This is where you get the leverage to increase the speed to reach financial freedom. Of course don't borrow money for shopping or to impress a hot and sexy girl by buying a car that you cannot afford with your monthly salary.

As I was googling, I found the following money borrowing method that is very popular in the US. It is called payday loans. Basically short infuses of loan to cover your money troubles before the next paychecks. However, the loan amount is quite low and I suspect that interest may not be so low though after reading through the various articles there on paydayloans. :D

Something similar to the credit card advances that we have in Malaysia.

Here is a bunch of articles about it. See here paydayloansfresh. Some article below on this vs conventional bank loans.

Paydayloansrefresh.com earns money by referring potential borrowers to third party lenders as stated in the disclaimer. Quite a good business model with no inherent risks.

Payday loans and cash advances.

A payday loan or cash advance is used for temporary help during difficult financial times between pay periods. While they can be used to help buy a car, such as the down payment, they are not typically used for large items. A payday loan will come due on your very next paycheck. They have a set interest rate that may vary on how much you borrow and your credit standing with them.

A cash advance or payday loan is a great way to help you get through a rough patch when you are low on funds and are trying to make it to your next paycheck. Payday loans to not require equity or security to get, whereas bank loans typically do depending on the type of loan. These loans are meant for short time help, not long-time investments such as a house or car.

If, let's say, your car breaks down and needs some repairs. Instead of going to the bank to get a long-term personal loan, you could go and get a payday loan or cash advancement. This way you will only have to make one payment, on your next paycheck, and will avoid racking up another monthly bill to add to all of your other bills.

Payday loans can also be used to help provide food during a rough time, or get that special gift for someone that's finally on sale and any number of other things. While the interest rate for paying back these loans may be higher than a bank loan (depending on your credit and type of bank loan), it is a one-time fee that is paid on your next paycheck. With a bank loan, you will be paying on the interest for at least the first year, depending on the loan, before any of your money actually goes towards the principle. With a payday loan or cash advance, you will have just one bill with the loan amount and interest all in it and you pay it only once. Well, unless or until you get another loan of course.


3 comments

  1. Mr Lonely // 4:22 AM  

    soon i gonna live the life you're living, was trying my best to be happy while still studying~ >.<

  2. maveric // 8:36 PM  


    Wow...looks quite a good biz proposition.I wonder what type of licencing do we need to do this business.The broad guidelines...

    a)Target big,$strong factories with many workers(many in Pg)
    b)We finance the 'payday loan'for their workers (application,approval etc thro' wire for speed & cost savings)
    c)We remit approved loan to their acct dept who disburse $ to the borrowers.Vice versa,their acct/payroll dept debit borrowers & remit $ back to us the following month.
    c)Loan amount fixed @ rm300(30%of an average worker salary of RM1k...??)& the interest is 5%/mth which is rm15.00
    Each RM300 quantum 'runs' 12 times/year & the total interest earned is RM15X12=RM180..!!..a rci of 60%..??!!

    We work out some fee for their acct dept effort ..& boy,the client should be happy as payday loan feature definitely make the workers happy also.

    It also makes sense as we spread the financial risk..:parcels of RM300 loan to many & with speedy monthly turnover/exactly like 'ah long man'...:D

  3. Kris // 8:43 PM  

    I don't think the company's account dept will have a part on this scheme..lol.

    It seems to be very destructive and encouraging debtness among the employees. They might turn to stealing, etc just to pay your debts!!

    RM300 for a RM1k salary worker is like 30% of their income! Quite high leverage.lol