Imagine this: You opened the fridge to prepare lunch one afternoon to find it not functioning. You need to save all the food before they turn bad, and the only thing you can do is to get a replacement fridge, pronto.
Unfortunately, you’ve used up your savings for the month on other important expenses, and payday is another two weeks away. Now, what are you going to do? Perhaps you can consider taking up an emergency payday loan for your new fridge. This article will tell you everything you need to know about applying for emergency payday loans with a direct lender.
An emergency payday loan is a short-term loan that is to be paid within the month, or on the borrower’s next payday. The payday loan is usually a small amount of cash, capped at the borrower’s one month’s salary, to pay off financial emergencies such as medical bills and to tide them till their next salary.
You can apply for an emergency payday loan through a direct lender via financial institutions such as banks and licensed moneylenders in Singapore.
To help you decide if taking an emergency payday loan from banks or licensed money lenders is more suitable for you, you will need to consider these factors:
As banks are authorised to lend more than licensed money lenders, borrowers will need to go through a stricter vetting and approval process. They will check your loan eligibility, such as minimum income requirements and your credit history – these processes might take up to 2 weeks and may not be the best option if you need quick cash.
Licensed moneylenders on the other hand are less strict, hence a higher chance of approval. If you’ve provided all the documents required, you’ll also enjoy a faster approval process – expect to get your cash on the same day, usually in less than 30 minutes.
To apply for emergency payday loans from direct lenders like banks require borrowers to be at least 21 years old. Singaporeans and Permanent Residents (PRs) will need to earn at least $20,000 a year to apply for an emergency payday loan, while the minimum annual income requirements for foreigners ranges from $40,000 to $60,000. Banks would generally be more willing to loan to those who have a stable income and good credit history.
The minimum age required to apply for a loan from a licensed moneylender is 18 years old. They are also open to all loan applications regardless of your circumstances. If you’re unemployed or have a bad credit history, you can still apply for emergency payday loans with a direct lender. However, you might not be able to get the best interest rates or loan terms.
The table below details the maximum sum you can borrow from licensed moneylenders in Singapore.
|Annual Income of Borrowers||Singaporeans / PRs||Foreigners|
|Less than $10,000||$3,000||$500|
|More than $10,000, less than $20,000||$3000|
|Above $20,000||6 times your monthly salary||6 times your monthly salary|
Banks in Singapore offer interest rates of 3.5-11% per annum, while licensed moneylenders are legally allowed to charge up to 4% per month (up to 48% per annum). Interest rates are usually higher with money lenders as the lenders are taking a higher risk due to their less stringent approval processes.
So although a bank loan is more affordable, applying for a loan with a licensed money lender is easier and faster if you need urgent cash for emergencies, especially if you just need a small amount you can repay quite quickly the next month.
Additionally, moneylenders check your borrowing history and limits (with other lenders) with the Moneylenders Credit Bureau when processing your loans. If you have made timely and consistent repayments on your previous loans, moneylenders might offer you a lower and more attractive interest rate and a chance for higher loan amounts.
Regardless of whether you are applying from banks or licensed moneylenders, you must first do a thorough research. First, ensure that the money lender you are considering is licensed. You can check their business name against a list of licensed moneylenders in the Ministry of Law’s Registry. If the moneylender isn’t registered on this list, it is not licensed.
Do also try calling up the office landline (given in the registry) of the lender to double check, as sometimes, illegal lenders might use business names of legal money lenders while providing a different phone number.
When you receive your quotes, make sure you compare the different loan terms, such as interest rates and other processing fees before applying. Some moneylenders like GoldStar Credit offer flexible repayment. If you think you can’t pay off your payday loan within the month, you can discuss with our friendly loan experts, and they might offer you a repayment plan that suits your needs.
Like any other businesses, good customer reviews mean they’ve successfully provided the best service for their clients. To find a reputable licensed money lender, read their Google reviews. Find out how the company treats their customers and learn about the process through the experiences of others.
Simply take a few minutes to fill up an online application form. Then, wait for a loan officer to call you regarding your loan and request you to head down to their office. By law, you will need to physically head down to the money lender’s office for face-to-face verification. Remember to bring all relevant documents with you.
These include identification documents (e.g. NRIC, passport and work permits) and proof of income (e.g. payslips from the last three months, bank statement, commission statements, etc). Foreigners will need to bring additional proof of home address (e.g. rental agreement, utility bills or mobile phone bills).
After verification and if your loan is approved, the loan officer will ask you for the date of your next payday, so that they can schedule the loan repayment date on that day. You will then need to sign your loan contract. Ensure that you understand all the terms (e.g. interest rates, late fees and repayment date, etc) before you sign. Clarify when in doubt, and only sign when you’re clear with everything and agree to the terms.
You will then be able to get cash immediately or have it credited into your bank account.
A licensed moneylender under the Ministry of Law, GoldStar credit offers a hassle-free application process with fast approval. If all your documents are in order, you can receive your emergency loan within the day. Our friendly and knowledgeable loan officers are available should you have any questions.