Financial difficulties are a reality of our times. We all occasionally encounter expenses that take out a good part of our savings or face unexpected situations that exceed our monetary possibilities. Like a large part of our country’s population, do you need short-term financial help?
Did you have to make an urgent payment that couldn’t be postponed, and as a result, you no longer have the funds necessary for your monthly necessities? In that case, a handy solution that can help you out of the current economic situation is applying for a payday loan in Singapore.
When should you consider a short-term cash advance? For one thing, people who need a payday credit package have less wiggle room than those interested in other types of loans. Do you require immediate financial aid? Have you been hit with an unexpected medical bill, or does one of your relatives need a cash influx with maximum urgency?
If so, a payday credit could be a financial solution worth considering. These types of financial packages have a higher interest rate than other types of SG loans. However, it doesn’t really matter, as short-term cash credits are designed to be repaid with the next paycheck.
What Are the Characteristics of a Payday Loan?
For starters, when you apply for a payday loan in Singapore, you do so for a short-term financial package designed to be repaid as soon as possible, preferably on the next payday. Payday credits are not loan packages you would use for significant investments or purchases that can be repaid partially over many months.
No, instead, they represent an emergency cash influx that you can use until the end of the month to purchase goods and services that cannot be postponed. Payday credits have a significantly higher interest rate than traditional personal loans, and the maximum amount you can borrow will, in most cases, not exceed your monthly wage.
This makes sense, as typically, these credits are meant to be paid in full in a maximum of a month. Plus, since they are short-term loans, in order to maximize their profits, most lenders will cap their interest rate and administration fee at the maximum level allowed by the legislation of Singapore.
This means that most payday credits come with an add-on of 14%. For a long-term loan, this would, of course, represent an unsustainable value. However, since they are meant for short-term emergencies, the financial conditions of these packages are acceptable for most Singaporean citizens.
What Are the Requirements?
Loans obtained from private lenders have become commonplace for the citizens of our country. Why? Well, let’s look at the statistics. Only 40% of Singaporeans can afford to purchase more than the bare necessities each month. This is surprising as our country is one of the wealthiest in Asia, with a human development index that places us 9th in the world.
However, SG is expensive, and for many people, unexpected expenses lead to significant financial difficulties. Are you one of the countless people considering a payday loan? In that case, you’re probably interested in finding out the minimum conditions you must meet to be eligible for one.
Firstly, potential borrowers interested in private credit packages in our country must be at least 21 years old and provide proof of a source of income. Being an SG national is an advantage, but it’s not necessarily a requirement. Are you a foreign national working in SG with a valid work visa?
In that case, you are also eligible for payday credit. However, the minimum income conditions will be slightly different for you. There isn’t a minimum amount you can borrow with payday financial packages, but there is a maximum, which will be determined based on your annual income.
What Paperwork Is Required?
To start with, the lender you approach will need your NRIC if you are a citizen of Singapore or your work permit if you are a foreigner with a valid visa. Then, you’ll need to provide proof of income. For most people, recent pay slips and CPF contribution statements are enough. However, if you are self-employed, then most likely, the lender you apply to will require a recent income tax notice of assessment.
Have you been at your current job for less than six months? In such a case, you might be asked to provide a copy of your work contract or a letter from your employer confirming your status as a full-time employee.
Plus, in SG, before they can assess your application and offer either a positive or negative response, lenders must obtain a report from our country’s credit bureau. In fact, if you wish to receive a credit report from CBS, you are eligible for one within 30 days of the approval or rejection of your loan application.
A Short-Term Loan for Long-Standing Ambitions
Using the services of private lenders will be necessary if you’re facing an unexpected expense and need an economic influx to tide you over until your next paycheck. The services offered by private lenders are varied and are more accessible for conventional Singaporean families than those provided by traditional banks.
Moreover, the credit conditions are usually easier to meet. From payday credits to personal loans and DCLs, the financial services offered by private lenders in our country are numerous, and they can be the key to the economic development of your household.
Do you need, for example, $2,000 to repay within 30 days? In that case, according to SG law, the maximum interest that can be charged for a payday credit cannot exceed 4% per month. Plus, the administration fee cannot be more than 10% of the loan’s value.
So, at the end of the month, in addition to the amount you initially borrowed, you will probably have to pay another $280. Is this a bad deal? It depends on your situation. However, if you require a fast cash influx with no questions asked, the payday financial packages offered by private lenders are worth considering.