If you are considering an instant cash from a moneylender you should read the “Notes for Borrowers” (PDF) from the Ministry of Law Singapore.
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Instant cash loans
Learn how these loans work, including some of their pros and cons.
While some loans can take up to a week to arrive, there are some lenders that offer short term loans with online approval and can deposit the funds within one business day. Applicants are still required to meet the eligibility requirements and these loans may charge higher fees than other options, so it’s important to compare options before applying. Use this guide to understand more about instant cash loans, including some of the alternatives to this type of borrowing.
How much cash can I borrow?
The size of the loan will depend on the lender as well as the applicant’s income and credit history. Some lenders limit the amount that someone can borrow on the initial loan, so it is always important to check the criteria of each lender before applying. It’s important that people apply for only as much as they need and can afford to repay within the agreed loan term.
How to compare instant cash loans
Comparing loan options could help you save and find the right option for you. If you’re weighing up your options, consider the following fees and factors before applying:
- Loan amount. The amount that the applicant is approved for will depend on the requested amount, their income, credit history and ability to repay. People should only apply for a loan that they can repay within the agreed loan term.
- Loan term. It’s important to choose a loan term that gives enough time to repay the loan term in full. It’s important to note that while a longer loan term will lower the periodical payments, it will increase the overall amount the customer pays in monthly fees.
- Repayments. Customers are required to pay a set amount at regular intervals that line up with their pay (for example, weekly or fortnightly). Before applying, calculate how much you’d need to pay each time and that it aligns with your budget. Some lenders allow customers to repay the loan early, so you should check if this is an option with the loan that you’re interested in.
- Rates and fees. You’ll be required to pay an establishment fee and monthly fee, both of which are a set percentage of the principal loan amount. The exact fees will vary between lenders but typically the monthly fee is capped at 4% for a loan, regardless of the borrower’s income and which type of loan has been approved. Arrears fees also apply if a customer misses a repayment.
- Turnaround. While some lenders can issue the funds within 30 minutes or an hour, others may deposit the cash within one business day.
- Lender. Before applying, it’s important that people check that the lender is reputable. Check if the lender lists a credit licence on its website, that it is easy to contact and that it displays the rates, fees and conditions of the loan transparently.
- Eligibility requirements. Lenders require people to meet a set of eligibility criteria when applying for a loan. Applicants are often required to be at least 21 years old, permanent Singaporean residents or citizens and receive an eligible income.
The pros and cons of instant cash loans
- Turnaround time. If approved, you can receive funds within 30 minutes or one business day.
- Online application. People can apply for these loans online, complete the application within a few minutes and receive a response within 60 seconds.
- Fixed fee schedule. Payday loans charge expensive fees, but the fees are fixed and regulated by the government.
- High fees. As these loans are a higher risk for the lender, it means that the fees are higher than some other loans.
- Disreputable lenders. While there are many legitimate lenders in the market, there are some disreputable ones too. It’s important to compare your options and ensure the lender has a credit licence before applying.
- Not a long-term solution. Cash loans aren’t designed to be a long-term financial solution. If you’re experiencing financial hardship, contact a free financial advisor before applying for a loan.
Alternatives to instant cash loans
- Personal loans. Some banks provide same-day personal loans to existing customers.
- Overdraft. Some banks allow customers to apply for an overdraft facility, which is linked to the existing transaction account.
- Credit card cash advance. Credit cards can be used for cash withdrawals, but this is considered a cash advance. Cash advances immediately attract interest (which could be more than 23% p.a) and a cash advance fee.