What is a Cash Loan?
A cash loan in Singapore is similar to payday loan, which is cash advancement on your paycheck. A cash loan is usually for those who need cash urgently and have intention to repay the debt as soon as possible. The interest rate on a cash loan depends on the amount borrowed and is different for every bank or moneylending institution.
What are the requirements for applying for a cash loan?
It is also rather easy to obtain a cash loan compared to other loans in Singapore:
1. Being between the age of 21 and 65 years old.
2. Have a minimum income of S$20,000 for Singapore citizens and S$60,000 for foreigners.
3. For foreigners, you must be a holder of a P1, P2 or Q type Employment Pass with a one year validity.
What’s the maximum amount that I can borrow for a cash loan?
Although it varies for every bank, most banks allow you to borrow up to a maximum of four times your monthly income provided your annual income exceeds S$30,000. If you earn less than S$30,000 a year, you can opt for two months cash advancement of your monthly income instead of four with a minimum annual income of S$20,000.
What are the interest rates for a cash loan?
Interest rates also vary, but the more common interest rates are from 7% to 13% per annum depending on the duration of the loan and repayment methods. Some banks even allow you to draw up a repayment plan up to 5 years.
Typically, fees are charged on a one-time basis and are as low as 2% the total amount borrowed. However, for banks such as the Standard Chartered Bank in Singapore, there is a $150 fee deduction from the loan approved for the first year and a S$50 annual fee waived for the second year if all monthly repayment is received in full for the past 12 months. There are also early redemption fees, which are 2.50% to 3% of the outstanding principal or whichever is higher.
What about late payments?
Late payments are also applicable even for cash loans, make sure you repay your monthly installments in full and on time. Late payment fees can go up to S$60 for each payment not made in full and if the balance is carried forward. Some banks charge a percentage instead of a fixed fee to up to 24% of the total amount borrowed per annum.