Financial emergencies can arise at any time. It can be a medical emergency or it can be an emergency related to your business. Fortunately, there are various options available in Singapore to help you weather that temporary cash crunch.These options include conventional lenders, such as banks and registered moneylenders, and unconventional lenders like pawnshops. Read on to understand these options in detail and find out the one that works best for you.
Some Common Situations Where You May Need Instant Cash
- Emergency medical situations
- Unplanned overseas travelling
- Wedding expenses
- Business transactions
Instant Cash Loan Options in Singapore
- You can apply for a personal loan that offers you the flexibility to use the funds for any purpose.
- Option to choose from a term loan and a personal line of credit. While term loans require a fixed repayment every month for the tenure you choose, a line of credit is a revolving loan where you can borrow as and when the need arises and pay interest only on the amount you have used.
- Most Singaporean banks allow you to borrow up to four times your monthly income.
- These are unsecured loans, so you don’t have to pledge any collateral.
- Most banks promise to approve your loan the same day. However, disbursal of funds generally takes at least a few days.
- Interest rates on personal loans start from about 8% p.a. and can go up to 15% p.a. The actual interest on your loan will be determined on the basis of your credit score, income, job type, etc.
- Documents required to apply for a personal loan generally include your identity proof documents, address proof, and income proof.
- Moneylenders require very few documents to approve your application. These documents generally include a valid identity proof and SingPass.
- You get the flexibility to choose the term of your loan.
- Loan is usually disbursed immediately, if you submit all the documents.
- You don’t need to provide any collateral for the loan.
- The maximum interest moneylenders are allowed to charge you is 4% per month.
- There is a loan approval fee of up to 10% of the principal amount.
- You will have to pledge your valuable item(s) in exchange for a loan.
- Ease of applying with minimum documentation. All you need is an identity proof and the item that you want to pledge.
- Interest rates start from 1% per month and keep on increasing every month.
- Flexible repayment, so you can repay any amount every month.
- If you fail to repay the loan, you will lose your pledged asset.
How to Know Which Option Works Best for You
Understand the nature of emergency: If you need cash the same day, consider a loan from a registered moneylender or a pawnshop. However, if you can wait for a few days, you can go for a personal loan from a bank.
Consider the amount you need: If you need a small amount, you can consider taking a loan from a pawnshop. With minimum documentation and no processing fee, it could save you a lot of time and money.
Loan tenure: Borrowing from a pawnshop for a long term could be very expensive. In that case, you can consider a personal loan from a bank. In Singapore, banks provide personal loans for tenures ranging from 12 months to 60 months.
Your repayment capacity: Knowing how much you can repay each month can also help you choose the right option.
No matter what option you choose, make sure you have a plan to repay the loan. Also, shop around to find the best terms for your loan.