Cash On Hand: All You Need To Know About Loans In Singapore

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Cash On Hand: All You Need To Know About Loans In Singapore

Close up of a woman’s hand holding Singapore currency notes of various denominations to denote cash on hand
Close up of a woman’s hand holding Singapore currency notes of various denominations to denote cash on hand

Part 1: A Helping Hand in Times of Need

a loan officer extending fast cash loan to a pair of SME owners who are struggling with their small business

2020 was a difficult year. With Singapore’s economy shrinking 13.2% in the 2nd quarter of 2020, people across various walks of life faced cash flow concerns; from employees taking pay cuts and retrenched staff seeking new jobs, to business owners suffering major losses in income.

While Singapore’s government granted extensive subsidies and levies on rents to ease costs of living, many still struggled with paying for various expenses. At a time like this, legal moneylenders provided an essential service, supplementing borrowers’ cash flow as they sought new jobs, paid off existing debts, or seized opportunities for their business.

Now, although the COVID situation has eased considerably in Singapore, many continue to feel the after-effects. For people like them, as well as anyone looking for funding to meet essential or emergency needs, two key options are available, namely bank loans and loans from licensed moneylenders.

Bank loans offer the advantage of lower interest rates and larger sums, but come at the expense of elaborate background checks and slow turn-around time, ranging from three days to over a week (longer for those who don’t have an existing account with them).

In contrast, legal moneylenders offer incredibly fast cash loans for Singaporeans, often within the same day of applying. With swift approvals and fuss-free procedures, licensed moneylenders are a great option for those in urgent need of cash. Read on to learn all about the various forms of loans one can get, and how a short-term loan can be a much-needed helping hand to achieve your goals.

Part 2: The Essential Types of Loans

a person preparing to sign a fast cash loan contract to meet her essential needs

Licensed moneylenders’ services are often required for personal loans, along with debt consolidation loans, and payday and monthly loans. Read on to find out more.

2.1 Personal Loan

Personal loans serve a huge variety of needs, ranging from helping towards the downpayment for your first car, buying new furniture for your home, or starting up a business. They are usually used to cover big-ticket purchases, meet unforeseen circumstances, and must be fully serviced in the short term.

All loans are typically divided into two categories: secured and unsecured. Secured loans require you to pledge an asset as collateral, such as your car or house. Secured loans allow you to borrow much larger sums, but with the risk that if the borrower defaults on payment terms, the lender has the authority to seize the collateral to recuperate losses.

Unsecured loans do not require pledging any of your assets, but come with higher interest rates and stricter requirements since the lender has no collateral to seize if the borrower defaults on payments, and has to engage in legal action to collect the owed amount.

In Singapore, the maximum interest rate that legal moneylenders are allowed to charge is 4% per month. The amount that one can borrow is also fixed but is subject to the borrower’s annual income and duration of latest employment. See the table below for more information.

How much can you borrow?

Borrower’s annual income Singapore Citizens and Permanent Residents

Foreigners residing in Singapore

Less than $100,000

$3,000 $500

At least $10,000 and less than $20,000


At least $20,000

 6 times monthly income

6 times monthly income

How does one go about getting a personal loan through a licensed moneylender? First, determine your own ability to meet the contractual terms and obligations of the loan, as you are obliged to fulfil the agreement on stipulated terms and conditions. Consider your existing income, financial status, and obligations, and insist on having the terms, late payment fees, and interest payment methods fully explained to you.

Getting an approved personal loan is as simple as visiting the office while bringing the necessary documents. After providing personal details and supporting documents such as utility bills, pay slips, and income tax statements (which need to be done in person at the lender’s office), your loan should be approved in almost no time.

Naturally, borrowers seek the cheapest personal loans in Singapore. But beyond low interest rates, there are other things to consider when picking a licensed moneylender. Look for those who offer credible advice, fast and efficient approval of your loan, as well as possess a strong reputation and credibility. Other things to note are the option for flexible payment plans, as well as whether the moneylender’s services best fit your specific needs.

2.2 Payday and Monthly Loans

For people whose incomes are barely enough to cover monthly bills and payments, an unplanned expense may disrupt carefully planned payment structures, leading to a constant cycle of insufficient funds to settle their bills.

In such scenarios, payday loan services bring much-needed relief. They come in two forms; payday loans and monthly loans. Payday loans only last until your next payday, while monthly loans are provided for longer durations and need to be paid back in monthly instalments.

A payday loan brings your ‘payday’ forward by a few days or weeks, allowing you to pay off emergency expenses. The duration of the loan starts from the day you receive the principal in cash and ends on your next payday.

A monthly loan, on the other hand, can be paid back over a longer period and calculated using the reducing balance method.


How do payday loans and monthly loans work?
Payday loan with 4% interest per month
Amount collected on 1st January Amount repaid on next payday (assuming you get paid every 1st of the month)
$1,000 $1,000 + $40.77 (interest)

Note: based on daily interest of $1.315

4-month monthly loan with 4% interest per month
Amount collected 1st month repayment 2nd month repayment 3rd month repayment 4th month repayment
$1,000 $275.49 $275.49 $275.49 $275.49

2.3 Debt Consolidation Loan

A debt consolidation loan is a repayment scheme that helps Singaporeans consolidate various unsecured loans into a single loan at lower interest rates. It is an essential choice if a borrower faces multiple high-interest loans, greatly lowering the pressure for making monthly payments, where the prevailing high interest rates mean the borrower pays far more than the original amount owed.

The most common scenario is when borrowers face high interest rates from racking up multiple credit card debts and struggling to pay off their monthly payments. Without a debt consolidation loan, borrowers face payments of varying interests, amounts, and due dates, making it difficult to track and service each loan.

Debt consolidation loans allow the borrower to make a single, lower interest loan to the creditor, and the latter takes care of the minutiae of payments of each respective loan. It is invaluable for getting out of the cycle of things like credit card debt, as well as managing multiple high-interest loans. 

Current Payment

Debt Consolidation Plan

Total outstanding balance


$42,000 (including fees and 5% allowance)

Interest rate

 26% p.a.
25% p.a.
25.95% p.a.
11.32% p.a.

3.8% p.a. (IER From 7% p.a)

Total monthly repayment



Total interest payable over 1 year



Total interest payable over 8 years




Compared to licensed moneylenders, banks have more stringent criteria for such loans, such as requiring an income of $20,000-$100,000, as well as having unsecured debt worth at least 12 months’ salary. Borrowers must also be Singaporean or PR. In light of this, a licensed moneylender is a more accessible option.

It is important to remember that a debt consolidation loan does not free you from your existing debt. 

Ask your licensed moneylender for a breakdown of fees, interest rates, and the terms and conditions before committing. Many websites also offer a calculator to help you calculate how much your loan can save you as well.

2.4 Business Loans

In times of adversity, there is always opportunity. Singapore’s SMEs contribute 48% of the country’s GDP, but COVID-19  hit them particularly hard. Many SMEs were forced to close or found it impossible to expand during this period.

For such businesses, as well as for young entrepreneurs who may lack capital and find it hard to receive credit from banks due to their youth, business loans help with starting a new business venture. In addition, they also act as loans for Singapore SME owners who seek to expand their business capabilities, be it investing in more digital infrastructure or furnishing a new retail outlet.

Traditionally, banks have stringent criteria to approve business loans, requiring exhaustive checks for financial and bank statements, GST declarations, credit score and company records, and statements that go back multiple years. On top of that, they often take up to 2 weeks or longer to process the loan, given the large amount of paperwork involved.

Licensed moneylenders provide a convenient and easier alternative to seeking funds for business. Business loans are approved within 1 to 7 days instead of banks’ 2 weeks, and borrowers can get from $10,000 to $300,000 in a single loan. In addition, moneylenders require fewer document checks, greatly increasing the chances of your business loan getting approved.

How do you go about getting an SME loan for your Singapore-based company? Just like applying for a business loan at a bank, you will require certain documents as follows:


Requirements for Processing a Business Loan

Your company’s Bizfile

The most recent six months of your company’s bank statements

A copy of the identify card (printed front and back) of all directors and shareholders

The most recent 2 years of financial  report

All directors and shareholder’s Notice of Assessment

All directors and shareholders’ CBS report (this can be bought from

Latest month’s staff CPF contribution statement (if any)

Tenancy agreement


Once you have prepared these documents, visit your licensed moneylender’s office to fill up a loan application form. You will discuss the amount to be loaned, as well as the repayment method, and the moneylender will conduct the document checks. Once that is done, wait until the moneylender approves your loan, before arranging a time to come down in person and collect the full loan amount.

Seize the initiative today and visit R2D Credit to arrange for a business loan, and you’ll be one step closer to attaining your business dreams.

Part 3: Other Types of Loans

Piggy bank with a graduation cap on it with the background of a college steps to indicate an education loan

Besides the various types of loans mentioned above, there are a few other types of loans for people across different walks of life, and these are provided by licensed moneylenders. Here’s more about some of these loans.

3.1 Grab and Gojek Loan

The ride-sharing and transport industry has grown rapidly in popularity in recent years, even more so with the incredible demand for both packages and food deliveries during the pandemic, as people were forced to stay indoors and work from home. With many jobs being lost, more people are turning to earning a living as Grab and Gojek drivers, delivering passengers and packages. However, it can be an expensive affair with high starting costs, from car rental and COE prices to unforeseen repair and hospital costs.

A Grab loan is designed to help Singaporean drivers out. With low interest rates and flexible repayment options, they are great for helping drivers have peace of mind as they take to the road. It helps newcomers secure capital for renting or purchasing a car, jump-starting their additional income.

Grab or Gojek driver looking back and smiling at the passenger

As an unsecured loan, a Grab loan from licensed moneylenders can prove invaluable, as it helps to pay for both repair and hospital bills upfront in the event of an unfortunate accident while waiting for insurance claims to get processed. This prevents the significant costs incurred from negatively affecting one’s cash flow and livelihood, or impacting one’s primary job and salary.

To be eligible for a Grab and Gojek loan, the borrower must be either Singaporean or a PR, possess a vocational driving license, and have other supporting documents such as their NRIC, proof of latest billing, car rental agreement (if applicable), and income payslips. Loan approval can be as fast as the same day of application, allowing for a hassle-free journey towards greater financial freedom.

3.2 Wedding Loan

As the global health situation improves and larger groups are allowed to gather, many couples are planning and sparing no expenses for their weddings. Be it renting their outfits and wedding space, or planning for their honeymoon, weddings rack up huge expenses.

Couple at their wedding smiling at each other in the background while in the foreground there is a wedding cake

With the average wedding costing $30,000 or more, the lack of finances for many young couples just starting their careers often means delaying their wedding plans for years.  In turn, this delays other plans, such as moving into their BTO flat and having children. In light of this, wedding loans from licensed moneylenders are a great option to circumvent the prolonged delay.

With quick approval and with fast cash loans, many legal moneylenders in Singapore can help couples attain the wedding of their dreams. In addition, wedding loans are often available at much more competitive rates compared to credit card interest rates, making it a superior choice instead of paying high interest rates over a prolonged period.

Like other loans from licensed moneylenders, you will need to provide various personal details, your financial records and payslips, particularly if the amount you plan to borrow is substantial. In addition, it’s important to discuss with your spouse-to-be and arrive at a combined agreement on how to split the monthly payments, as you would not want financial matters to impact your wedding day and your new life as newlyweds.

3.3 Renovation Loan

On top of wedding expenses, young couples also have to set aside sizeable funds for renovating their new flat. With an average cost of $52,000 for a five-room HDB flat, renovation doesn’t come cheap, especially if you go for aesthetics and higher-quality options. Here’s where renovation loans come in. These loans allow couples to not just move into their dream home ahead of schedule, but to furnish it according to their desires as well.

Renovation loans from licensed moneylenders aren’t just for young Singaporean couples; they are also great for families upgrading into a new home, such as parents who want to upgrade to a condominium apartment for better facilities.

Back view of a couple sitting on the floor in a new house and pointing to the wall to indicate renovation

The scope of renovation loans covers electrical and wiring, carpentry work, renovating bathrooms and kitchens, painting and tiling of floors and walls, and external improvements for owners of private homes.

The criteria for getting a renovation loan with a legal moneylender is that the applicant has to be a Singaporean/PR, the owner of the renovated property, and their existing financial records must be within the threshold of the loan. With a reputable moneylender, you can expect fast cash loans, letting you dedicate your energy to planning your renovations.

3.4 Medical Loan

Health is the greatest gift one can have, and many Singaporeans are well aware of it.

While most Singaporeans have proper medical coverage through MediSave, MediShield, and other types of medical insurance, there are often areas where it is not as comprehensive as necessary, or when emergency medical bills arise that need out-of-pocket payments before they can be claimed from insurance. In other circumstances, some expensive surgery costs are not fully covered, leading to runaway costs that can deplete savings rapidly and lead to rising debt.

Smiling old lady in the hospital holding the hand of a younger lady

Many conditions are also excluded from full coverage, resulting in greater medical bills. A medical loan covers Singaporeans’ immediate medical payments, acting as a stopgap to help them pay their bills. It is especially valuable as some medical conditions can incapacitate one from earning their monthly salary, leading to fewer funds being available to pay for their condition.

Medical loans are offered by licensed moneylenders at low interest rates and with a fast turn-around time, often within the same day as the application itself. This is invaluable for emergencies, such as for unforeseen circumstances like heart attacks, sudden collapses, and seizures. For longer-term costs, such as multiple surgeries and treating chronic illnesses, medical loans can also provide Singaporeans with the financial support to tide through a longer period, helping them rest easy knowing that they and their loved ones can still seek the treatment they need.

3.5 Bridging Loan

A bridging loan is a short-term loan, often up to six months, aimed at bridging the monetary gap for homeowners in the midst of selling their existing property and buying a new one. Bridging loans cover approximately 15 to 20% of your new home’s price, helping you raise capital and clear downpayment for your new property while waiting to receive the full proceeds from selling your existing property.

 Young couple smiling as they sign a bridging loan document as agent looks on, with a smile

Bridging loans from legal moneylenders offer much quicker approval as compared to banks. This is useful for homeowners who need to make a quick, large-sum deposit or payment for their new property to secure its purchase; or for those who may not get bank approval due to other existing loans.

3.6 Study Loan

While education in Singapore is heavily subsidised, tertiary education can still rack up significant fees, especially for young Singaporeans from lower-income households who have to pay for their education themselves. Getting extra funds to pay for one’s education can be difficult, especially if one does not meet the various grant scheme requirements in Singapore.

Back view of a classroom full of students with a lecturer in the background

A study loan from licensed moneylenders is invaluable for students looking to further their education. In addition, as unsecured loans, no collateral is required, greatly easing the concerns of working during their free time to pay off the loan amidst schooling. A guarantor will be required on behalf of the student to secure the loan, however, with the eligibility criterion being that the guarantor must not be declared bankrupt


Loans are a great way to achieve both your short-term and long-term goals, providing large sums of cash in advance to fulfil your dreams, with affordable and low-cost interest rates. But above all, you need to understand the nature of the contract you are entering into with licensed moneylenders, as you are still legally obliged to fulfil the full terms of the contract and repay the loan on time and in full.

Do consider your financial situation, which type of loan best services your immediate needs, as well as the optimal duration of the loan, the amount you require, and the interest rate you are willing to accept, before approaching one of Singapore’s legal moneylenders for a fash cash loan.

Visit R2D Credit today to learn more about achieving your goals.


The information provided on our website is for educational and informational purposes only and is not intended to be a substitute for legal or financial advice. While we try to ensure that information on this website is accurate, we do not warrant that the information will be free from error. We shall not be liable for any loss or damage that may arise from the use of this website.

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