Financial crises are part of our lives. Many Singaporeans face debilitating accidents, retrenchments, or evictions. The best solution is to have an emergency savings account, but that’s challenging if you’re living off a minimum salary.
In this situation, you can consider a personal loan. However, your bank’s approval process may be prolonged and intricate. Remember that your bank will assess your credit score too before granting this loan.
The right solution for financial emergencies that require quick cash is an urgent emergency loan.
Remember to choose your provider carefully and to analyse several loan packages. We’re here to help.
In this article, we’ll discuss the advantages and disadvantages of various financing solutions. We’ll talk you through the eligibility requirements and paperwork, and we’ll tell you how much money you can get.
Next, we’ll help you with alternative solutions if banks rebuff your application.
The result: you’ll opt for the most suitable loan package. Use it wisely to overcome all your financial difficulties. Keep reading!
An urgent loan is a type of personal loan that you can get quickly. That’s because the principal amount you’re borrowing isn’t massive. Thus, your repayment plan will also be shorter.
Many credit providers customise their financing solutions to your budget and the amount you need. In the process, they cut through bureaucracy so that you won’t have to submit lots of files.
Your credit score is less important when applying for an urgent loan versus a typical personal loan. The reason is that you’re borrowing less money on a shorter tenure, which decreases the risk that banks undertake.
Warning: There are many types of personal loans. Some, such as education or renovation loans, can only be used for their stated purpose.
Here are some examples:
Conversely, you can use your urgent emergency loan for anything you want. And there are other benefits too:
Before choosing the right solution for your needs, learn how to get quick cash through:
Some banks crafted unique emergency loan packages for people in need of fast funds. These personal loans look like urgent loans because they have streamlined approval processes, and you can get your money faster.
However, emergency personal loans from banks aren’t as quick as urgent emergency loans from moneylenders.
These personal loans are a good option, though, if you need more money. Some emergencies like a divorce or unplanned pregnancy allow you to wait a couple of days until you complete bank formalities. The result is a more massive amount at a lower interest rate.
But there’s an essential downside:
Your credit score has to be high.
Besides, some banks may impose conditions regarding your minimum wage, age limits, and nationality.
If your car breaks down on your way to work or you don’t have enough money at the shops, you can pop your credit card into the closest ATM. That’s a credit card advance loan.
Its crucial benefit is that you can get the money almost anywhere in minutes.
Compared to an urgent emergency loan, these cash advance loans are:
Unfortunately, these advantages can become your biggest enemies if:
That’s why financial specialists frown upon credit card loans unless there’s a genuine financial emergency.
You may need an urgent loan because you want to solve financial challenges such as:
So why is an urgent emergency loan better than other financial solutions?
Before sending in your application, make sure your chosen provider can loan you as much as you need. Your loan provider should have a strong financial standing like Katong Credit Pte. Ltd.. Also, ensure your moneylender crafts a customised reimbursement schedule, with affordable instalments. Otherwise, you won’t be able to refund your debt.
Although some lenders offer more massive amounts, here’s what influences how much cash you can get with an urgent emergency loan:
The rule of thumb is that an urgent emergency loan can’t be more than 4-6 times your monthly wages. That’s because you need to repay the debt with interest within one year comfortably.
However, if your yearly wages are over $120,000, banks like DBS can fork out up to ten times your monthly income.
Banks lend more money to Singaporeans with high credit scores because your rating indicates financial diligence. Thus, banks consider you’re not a risky customer.
Here’s how Credit Bureau Singapore associates your probability of default to your rating:
|Credit score||Risk grade||Probability of default (Minimum)||Probability of default (Maximum)|
Is your credit score low? Here’s what you can do.
Certain Singaporean banks impose age, income, and citizenship-related conditions:
Licensed moneylenders in Singapore won’t enforce these criteria, but they customise your principal amount according to your income:
The best way to choose the right urgent loan is to ensure it fits your budget. Thus, you need to make a list of your income and expenses. Compare prices of various solutions to your current problem, and choose the best value-for-money plan. That way, you won’t borrow over your financial power.
Pro tip: Don’t send too many loan applications because this practice decreases your credit score.
Below are other factors to consider:
Long and short tenures have particular sets of advantages:
No financial institution can go over the 4% monthly interest imposed by the Ministry of Law in Singapore. However, rates vary within this limit from low to high.
Here’s an industry secret:
High-interest rates have certain benefits, depending on your needs:
Advice: The keyword here is “your needs.” Start from your budget and necessary expenses that cover your financial distress. Then, compare several moneylenders with an online calculator to get the best deal.
Some emergency loans have processing fees. You see that particularly with banks in Singapore, as they demand sums of around $200 to speed up your loan inquiry.
Take all these fees into account before signing up for a loan.
Ensure your lender has high reviews because that shows you’re dealing with an expert and caring moneylender. You’ll need a partner with those features in case of reimbursement difficulties.
Most banks and moneylenders in Singapore need paperwork to prove your ID, residence, and income. Examples of these files include:
However, foreign citizens may need additional documents, depending on your moneylender:
Pro tip: Want cash faster? Choose a moneylender that lets you apply online with your SingPass.
Unfortunately, it’s not uncommon for Singapore banks to rebuff specific loan applications, especially if you have low credit score and income.
Should this happen to you, make sure to never borrow from loan sharks! Once you fall into their trap, it will be hard to get out.
These loan sharks use fraudulent and physically dangerous means to recover their loan.
Here’s what you can try instead:
After a bank rebuffed your loan inquiry, the best option is to seek professional assistance from a licensed moneylender.
If you need extra financial guidance, you can also receive free credit counselling from non-profit groups in Singapore.
Banks are not your only option.
You should apply for an urgent emergency loan from a licensed moneylender because:
Besides, licensed moneylenders:
Get a loan from someone who cares about more than numbers on a piece of paper. Find out more here, we promise no obligations.