Is a Fast Cash Loan in Singapore Right for You?

When it comes to personal finances, it’s always handy to have an emergency fund. The purpose of this fund is to avoid any unexpected financial blows in the form of medical expenses or sudden unemployment.

But what if you don’t have an emergency fund? Or do your expenses turn out to be more than you have managed to save over the years? This is where a fast cash loan from a licensed money lender could be useful.

What is a fast cash loan?

A fast cash loan is a type of personal loan provided by licensed money lenders.

Usually, banks are the preferred option when a need for urgent cash arises. And so long as you already have an existing account with a bank and your credit history is good, getting a personal loan from the bank can be a quick affair, with the funds being available within 24-48 hours.

However, if you do not have an account, or if you have a bad credit history, this quick option disappears. In such situations, some borrowers may consider licensed money lenders for fast cash loans in Singapore, subject to the lender’s assessment and the applicable borrowing limits and regulations.

The term “fast cash loan” generally refers to a loan where the application and disbursement process can be completed relatively quickly. It is not a separate type of loan officially defined under Singapore’s moneylending regulations.

Read on to understand whether you should get a fast cash loan in Singapore.

The pros of getting a fast cash loan

#1 Fast and easy access to funds

If you’re ever in a situation where you need urgent access to funds, a fast cash loan from a licensed money lender offers what you need as quickly as 30 minutes after the verification of your identity and all required documents. You simply have to fill out an application form and visit the licensed money lender’s office with the necessary documents. It is convenient and fast and can be repaid in scheduled payments.

For borrowers searching for an urgent cash loan in Singapore, the speed of the process can be useful when an unexpected expense cannot wait. However, keep in mind that the actual processing and disbursement time can vary depending on the lender, your documents and the outcome of the required checks.

#2 Hassle-free application process

Compared to other loans, fast cash loans are hassle-free and easy to apply for due to the simple application process. Most of the time, all you need is your NRIC, income statements, and proof of residence. With minimal documentation, it saves you time and effort to get the financial help you need quickly.

#3 Flexibility in terms of collateral, tenure, and purpose of use

Fast cash loans are incredibly flexible, which means you can use the cash for anything from housing to car repairs or even a holiday, but of course, it’s wiser to limit your use to emergencies.

Fast cash loans are also termed unsecured loans, which means you don’t need to put up collateral for them. In other words, you don’t have to worry about anything being taken away from you. But it doesn’t mean that you shouldn’t pay what you owe, as there are penalties for defaulting.

Besides that, fast cash loans offer loan tenures of up to 36 months. This allows you to choose either a short- or long-term arrangement to pay off what you borrow.

#4 Your credit score doesn’t really matter

As mentioned above, getting a loan when you have a poor credit score can be a challenge, but it is still possible with fast cash loans. Generally, trusted money lenders tend to focus on your ability to make timely loan payments. They review your application and consider factors like your income and debt-to-income ratio, and take that into consideration along with your credit status. It is advisable to be consistent with your payments, as otherwise, you’d be risking further debt.

While a less-than-ideal CBS credit score does not automatically disqualify you from a quick cash loan in Singapore, this does not mean that licensed lenders ignore your financial history. They are still required to assess your financial information through the Moneylenders Credit Bureau (MLCB).

While the above benefits are great, there are also some drawbacks to getting a fast cash loan in Singapore that one must consider.

The cons of getting a fast cash loan in Singapore

#1 Late repayment fees

Even though fast cash loans are flexible with their requirements, there are penalties for not meeting your scheduled repayments. For this reason, you must avoid delayed payments as much as possible. It can even hurt your credit score and increase your debts significantly, which can compromise your reputation as a borrower.

#2 Possibility of increased amounts of debt

Before you take a loan in Singapore, you need to reflect on how you manage your finances and your ability to repay. Most borrowers apply for fast cash loans to meet unexpected financial costs, such as emergencies or to cover a financial shortfall in a business.

However, if you misuse the fast cash loan for an unnecessary splurge, such as buying the latest gadgets or booking a luxurious holiday, you may accumulate more debt in the future. After all, you’re paying more than the actual cost of the item you’re funding when you take a loan. Instead, it would be advisable to wait for a few months and factor your expenses into your budget.

#3 High interest rates

Licensed money lenders have a cap on the amount of interest they can charge. But at 4% interest per month, this cap still allows money lenders to charge 48% interest per annum. By comparison, banks charge around 2% to 3% interest per annum. Therefore, while determining which source to approach for a loan, do factor in the higher interest rates as well.

Consider the total cost before taking a fast cash loan

When looking at fast cash lenders, don’t compare offers based on speed alone. Consider the interest rate, applicable fees, repayment schedule and total amount you will have to repay. Licensed money lenders in Singapore are subject to rules on interest and fees, but borrowing still comes at a cost.

If you are looking for an urgent cash loan today, take a moment to work out whether the monthly repayments fit comfortably within your existing budget. A quick source of funds can address an immediate shortfall, but the repayments will become another financial commitment in the months ahead.

Finally, make sure you are dealing with a licensed money lender. Be cautious of unlicensed fast cash lenders promising guaranteed approval, asking for upfront fees before a loan is granted, or claiming that no checks or documents are required for the fast cash loan.

The bottom line is this: a loan with a faster application process is not necessarily suitable for every borrower, so look beyond how quickly the money can be made available when comparing different cash loans in Singapore.

Here’s a handy table to summarise the pros and cons of a fast cash loan:

So, is it really useful to get a fast cash loan in Singapore?

Yes, a fast cash loan in Singapore can come in incredibly handy when you’re faced with financial challenges. However, bear in mind that it can also easily drown you in debt if not used responsibly.

Whether you are considering a fast cash loan, an urgent cash loan or other fast loans in Singapore, take the time to consider the full cost of borrowing and whether the repayments fit your budget. Fast access to money can be useful during a genuine financial shortfall, but it should not replace an emergency fund or become a way to cover ongoing spending.

If you do decide to get a fast cash loan, R2D Credit is here to help. Apply now or contact us for a no-obligation chat about your options!.