Is it Really Useful to Get a Fast Cash Loan in Singapore?

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 could be useful.

What is a fast cash loan?

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

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. Instead, you can consider a licensed moneylender – all their personal loans are fast cash loans as they become available very quickly. Read on to understand whether you should get a fast cash loan in Singapore.

The pros of getting a fast cash loan

• 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 moneylender 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 moneylender’s office with the necessary documents. It is convenient and fast and can be repaid in scheduled payments.

• 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.

• 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 only 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.

• 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 moneylenders 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 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

• 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.

• Possibility of increased, unmanageable 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 cash loan for unnecessary splurge such as buying the latest gadgets or booking a luxurious holiday, you may accumulate more debts 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.

• High interest rates

Licensed moneylenders have a cap on the amount of interest they can charge. But at 4% interest per month, this cap still allows moneylenders to charge 48% interest per annum. By comparison, banks charge 3.5% to 10.8% interest per annum. Therefore, while determining which source to approach for a loan, do factor in the higher interest rates as well.

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, it is one of the most popular options for borrowers when faced with financial challenges and does offer attractive benefits. However, it can also easily drown you in debt if not used responsibly. Based on all of the above, you should ask yourself if a fast cash loan is really useful to meet your financial needs.

If you do decide to get a fast cash loan, choose R2D Credit for our attractive loan rates. Contact us to discuss your requirements.