Numerous payday lenders offering payday loans in Singapore in recent years. An application can be finished in minutes, and borrowers often receive the money within one business day. However, applicants need to fully comprehend the online loans available, even though they appear to be easily accessible.
Whether it’s for a simple expense or an emergency situation, there are times when you might need the help of payday loans. When applying for a payday loan, you might have questions about its process, or which payday lender might be right for your needs.
With so many options out there, this article will help to explain what you can expect when getting yourself a payday loan.
What are online payday loans and how do they work?
A payday loan is an unsecured loan made to repay the cost of unforeseen emergency expenses (such as medical bills, utility arrears, or personal loans), and which must be paid back usually within a month–typically your next payday, hence the name.
Unlike regular installment loans, paying off this type of loan will usually only require a lump-sum payment upon the arrival of your next paycheck. The payment period can be extended but may require extra fees depending on the loan agreement.
Applications can be made via the website of a payday lender and online approval of applications is possible but is subject to the same guidelines as regular applications. You will only need to visit a lender, present the requirements, and expect your money with their provided period.
Furthermore, financial institutions and borrowers should discuss the contract face-to-face and the contract should be given to the borrower outright when the loan is granted.
Who qualifies for a payday loan?
Typical eligibility and requirements:
- The age of the applicant must be 18 years old or older
- Citizenship or permanent residency in Singapore is also required
- Must be employed, or possess a recurring source of income. For Singaporean citizens and residents, the minimum income requirement is S$1,500, while foreign residents must earn at least S$2,000.
Prepare the following documents:
- Proof of income and employment
- Proof of residence
- SingPass to log in to CPF, IRAS, and HDB websites
- For foreigners: Passport, work permit, proof of residence, proof of employment, proof of income
The state statutes and criteria for qualifying for payday loans and installment loans may require some customers to submit additional documentation.
Know more about types of loan in Singapore, read Types Of Singapore Loans That You Should Know.
How is a payday loan different from a personal loan?
A personal loan is lent for long-term expenses like purchasing expensive equipment or financing major home renovation projects – repayment terms and the due date for a personal loan can range between two and five years, depending on your income. Taking out personal loans can offer more flexibility of use, as you can devote the funds however you like.
Payday loans are considered a short-term cash advance that you take out in order to be able to pay your bills on time or cover any emergency payments. The repayment due date will also vary based on your next payday.
Payday loans will also typically offer less money than personal loans. The former will (and should) go no higher than your next salary payment, while moneylenders’ personal loans can go as high as 6 times your monthly income per loan. Note that The Monetary Authority of Singapore (MAS) limits how much you can borrow up to 12 times your monthly salary across all unsecured credit facilities.
Where to get a payday loan in Singapore?
It can be hard to take out a loan, especially if you have a low credit score. But Moneylenders offers fast approval and cash disbursal process, in addition to not requiring a high credit score. This makes it the perfect financial solution for when you need money as soon as possible.
You can also opt to visit us at Instant Loan. Our main purpose is to help facilitate easier loan applications and save the public some time and money. We provide a matching service for both borrower and lender, reducing the hassle of applying for a loan online and speeding up the whole process.
How to choose the best payday loan for you
Given that you have been employed for a long period of time, you need instant funding, and you find it hard to manage your money, you decide to apply for online payday loans.
But just how do you go about choosing a payday loan provider?
This basic guide is designed to help make your search less stressful by suggesting some of the critical factors to consider before taking out a payday loan.
Each offer has unique terms and conditions that must be met in order to qualify for the loan amount being offered. The loan amount determines the total cost of the loan and all the monthly payments.
So which loan amount should you choose: a higher amount with lower monthly payments or a lower amount with higher monthly payments? The answer to this question is different for your specific need, so it is important to weigh your options accordingly.
When choosing which loan to apply for, it is essential that you know what interest rate you are being offered and how these rates compare with other lenders. This will help you make an informed decision about borrowing money from that specific payday lender and will ensure that you do not fall trapped in high-interest loans and overpay for their services.
The length of the loan, along with any possible penalties or fees that might be charged along the way, will play a significant role in determining how well or poorly you can repay the loan every next payday.
For this reason, it is important that you understand how important your due date and the repayment period are.
The total cost of applying for a loan is a significant part of the decision-making process as it includes all fees and charges (processing fees, admin fees, annual percentage rate, etc.) that are associated with getting approved for the loan.
Payday loan FAQs
What is the best payday loan?
Rather than make you jump through unnecessary hoops, payday loan options are cleverly accessible online to help you solve your financial issues as quickly as possible. You can place your loan application directly on an online platform like Instant Loan that can match you to the most compatible payday lender according to your preferences.
How can I get a payday loan instantly?
You can apply for various types of payday loans online through innumerable websites and online portals. These financial services are provided by different companies and industry experts. Most of the time, their online application makes it possible for the borrower to get approved for a payday loan in minutes.
Is a payday loan secured or unsecured?
A payday loan is an unsecured loan that is typically utilized for short-term financial needs. This type of unsecured loan generally doesn’t require a security deposit and is therefore attractive to borrowers with low credit scores. However, lenders still prioritize your repayment capacity.
Does paying back payday loans build credit?
A payday loan is designed to be easier to apply for, and as such does not require good credit upon application. Credit is commonly a major factor if you apply from a bank or a licensed money lender, but this is not the case for this type of loan.
As credit has no effect on your application for payday loans, making your repayments, however on time, will unlikely affect your credit.
What happens if I can’t repay a payday loan?
Most payday lenders don’t make their money from interest charges. Instead, they charge fees that include an upfront fee and various collection fees later down the road (if you fail to pay). As such, it’s important to be aware that a payday loan is not a one-size-fits-all solution for your needs and should only be pursued after weighing the pros and cons carefully.
Before embarking on any kind of loan, it is advised that customers with credit difficulties should seek credit counseling and expertise from unbiased financial professionals.
Can I extend my loan due date?
In a sense, you CAN extend the repayment schedule of payday loans, but this will require that you pay a fee each time you miss the original due date. This is generally not advisable, as the cost can snowball into a larger amount of money.
Are there alternatives for instant funding?
Personal loans enjoy the same reputation for being able to provide instant funds, and they also typically have a lower APR, which means they will cost less in the long run.
You can get a personal loan from a bank or credit union. A bank will have stricter requirements, but if you meet the required salary, you can get the funds that you need.
Credit unions may offer the lowest rates for applicants with bad credit, but you’ll need to be a member first.
Whether you are a first-time borrower, or perhaps looking for a higher amount loan, picking the best payday loan for you can be very daunting. There are so many payday loan companies out there offering great interest rates, or boasting a lower fee than their competitors; it can make your head spin. Consider the following:
- Online payday loans can be an alternative to traditional short-term loans that are often used by borrowers in need of cash but are unable to meet the requirements of traditional loans.
- You can compare the interest rates and fees along with other relevant information before deciding on whether you need a payday loan or not.
- Payday loans may cost you more than just the interest as you will have to pay fees and surcharges when you’re taking them out, but they are also beneficial as they do not require a long and tedious approval process.
If you don’t have the time to research and shop around for the best terms, you can rely on Instant Loan to take care of it for you. Instant Loan can review your financial situation and provide you with a list of loans from the top licensed moneylenders in Singapore best suited to address your financial needs.