What Does an Easy Loan in Singapore Really Mean?

Sometimes we find ourselves in situations where we are in dire need of cash because of an unforeseen emergency and our bank balances are not helping either. In times like this, many of us may be frantically searching for ways to get an easy loan in Singapore. The most popular Singapore loan option would be the loans that are given by local banks. However, these loans usually have a minimum loan amount that starts in the thousands. When you’re in an emergency situation, you would want quick cash that doesn’t require long application processes and are typically in need of a smaller loan amount. The best option for circumstances like these would be getting a loan from a licensed moneylender. The easiest and fastest money loan that authorised moneylenders can offer would be a Payday Loan. However, like any other loan, the Payday Loan comes with its own pros and cons. If you are considering this easy loan option, read on to find out everything you need to know before making your decision.

Payday Loan: What You Need To Know

Payday Loans are a subset of your typical Personal Loan and they are a quick, short-term solution for urgent situations. Like the name suggests, the Payday Loan essentially pulls forward your income for the month and also requires you to pay off your debts when you receive your paycheck for that same month. This means your loan amount would typically be smaller than your monthly income to ensure that you will be able to repay the full amount on time. While getting a Payday Loan is simple and quick, it is not an option for an interest free loan in Singapore. In reality, Payday Loans have some of the highest interest rates. They do not have any hidden costs but their interest rates can go as high as 24% per fortnight. Their high interest rates would require a disciplined repayment plan and good management of finances. The application process is very straightforward and swift with the licensed moneylender only needing proof of income as credit scores are not heavily examined. All you need to do is fill up a form and ensure you have a bank account and you’re good to go.

Personal Loan: A Possible Alternative

If a Payday Loan seems a little daunting, a Personal Loan may just be the perfect alternative. Although not as immediate as Payday Loans, Personal Loans also offer a quick processing time of a day or two. While Personal Loans do not have a minimum loan amount, they also offer money loans of up to six times your monthly salary if you are in need of even more cash. As Personal Loans are usually unsecured, they do not require a high credit score. The interest rates are less extravagant compared to Payday Loans, with the maximum charge capped at 4% per month under Singapore law. As the loan amounts are usually larger than a Payday Loan, some licensed moneylenders have repayment schemes that allow up to 12 months to pay off your debt. Depending on your financial situation, a Personal Loan can be another choice for getting an easy loan in Singapore.

Payday Loan vs Personal Loan: Pros and Cons

Now that you know what both loans have to offer, you have to weigh out the pros and cons depending on your personal financial limitations. When it comes to Payday Loans, you are guaranteed instant cash if your situation truly requires it. In comparison, a Personal Loan may take a couple of days to process. Both these loans do not examine your credit history such as total debt amount and regularity of past loan payments but they do require your monthly income statements. While Payday Loans require you to pay off your debts within a month or as soon as your next income payout, if you need more time and a larger sum of money, Personal Loans allow a 12-month repayment plan. Payday Loan interest rates are comparatively higher than Personal Loans, which can accumulate into exorbitant amounts overtime if not paid off soon. With these comparisons made, choose the money loan that accommodates your means wisely.