Unanticipated events do occur from time to time, and when they do, they frequently necessitate the quick availability of finances.
If your savings is not enough you may find this to be a difficult situation. Thankfully, there are loan offers that can be used for these unexpected events.
What is an Emergency Loan?
In Singapore, the term “emergency loan” is a type of loan offered financial institutions or licensed moneylenders to persons who are in a situation where they have immediate financial needs.
The primary purpose is to provide assistance to individuals in either overcoming unanticipated financial challenges or coming up with the necessary finances to cover unexpected obligations.
When presented with unanticipated situations, such as an unexpected medical emergency, required house repairs, or sudden debts, emergency loan can be of great help. People are able to have instant access to funds as a result of this, which enables them to promptly take care of their immediate financial obligations.
Because of this, the most majority of short-term loans in Singapore are deemed to be unsecured, which means that the borrower is not required to provide any form of collateral. These loans can be obtained through a variety of means, such as cash advances on credit cards, which are made accessible by financial institutions, and payday loans, which are made available by moneylenders who have been authorised to do so.
What Are the Types of Emergency Loans in Singapore?
Personal loan
Emergency loans in Singapore are usually unsecured personal loans. Loan amounts, eligibility requirements, and interest rates depend on age, residency, income, employment history, and, for banks, credit rating.
In Singapore, licensed moneylenders favour steady earnings over credit scores. While many lenders don’t need a minimum wage, your earnings affect the loan ceiling. That makes licensed moneylenders a viable choice for people with bad credit or freelancers.
Read also: 24 Hours Money Lender Singapore: What You Need to Know
Credit card advance
Credit cardholders can get cash advances from their balance. Cash advances usually have higher interest rates than card purchases. Additionally, they charge processing and transaction fees.
Interest accrues immediately after a cash advance withdrawal, increasing the repayment amount.
Payday loan
Payday loans, available only through licensed moneylenders in Singapore, with high interest rates and low loan amounts. These loans have high borrowing costs compared to other options.
Payday loans have a fast processing time and no credit check. They are named after its payback schedule on the borrower’s next payday.
When to Use Emergency Loan in Singapore?
The following are some of the possible uses for emergency loans in Singapore:
Emergency Medical Expenses
Unanticipated medical expenses, such as hospital bills, operations, or treatment, can be covered by emergency loans, which are a form of financial assistance.
Even if you have insurance, you can still use them to your advantage in situations when immediate payment is required before being reimbursed by the insurance company.
These loans provide urgent assistance by fronting the medical bills, which enables immediate access to necessary medical care without the wait for insurance to cover the costs.
Utilities
Struggling to cover essential utility bills such as electricity and water can risk service discontinuation. In such circumstances, an emergency loan can supply the required funds to ensure prompt bill payments.
By utilising the loan for utility expenses, disruptions to crucial services can be averted, maintaining a stable living environment.
Household or Vehicle Repairs
Although home equity line of credit (HELOC) or home equity loans may offer better interest rates and terms, but house repairs sometimes require quick payment, which may not fit with a HELOC. Car repairs often occur at inopportune times. Thus, an emergency loan might cover unexpected car or home repairs that can’t wait.
Housing payments – Rent and Mortgage
In the event that your mortgage payment is looming, and you’re short on funds, an emergency loan offers temporary relief. It acts as a stopgap, granting you the necessary support until you can manage the payment independently.
This temporary solution helps you fulfill your financial commitments and averts potential repercussions, providing a cushion during challenging financial periods.
Funeral Costs
An emergency loan may be needed if a loved one dies without funeral or end-of-life arrangements. In such difficult times, emergency loans can cover funeral costs.
These funeral loans provide immediate financial assistance for funerals, cremations, and memorial services. They allow you to say goodbye to your loved one without financial stress.
Determining When to Consider an Emergency Loan
Emergency loans are designed to provide fast cash for urgent financial needs.
These loans are an alternative to standard lending and are aimed for urgent financial needs. The money are disbursed quickly after permission, giving immediate financial aid.
Loans for unforeseen expenses vary by situation. Ultimately, you decide whether to take out a loan. You should carefully assess the amount needed and ensure that any borrowed funds are within your means. Reserving these loans for emergencies reduces the risk of financial trouble.
Where to Get Emergency Loans in Singapore?
A swift emergency loan can be acquired through various sources, including payday loan providers, credit card companies, licensed moneylenders, credit unions, or traditional banks.
Licensed Moneylenders
Licensed moneylenders provide diverse emergency loan options and typically initiate a pre-qualification process involving specific inquiries to determine loan eligibility.
Nonetheless, it’s advisable to conduct thorough research before engaging with any moneylender. Confirming their legal authorisation to lend money is crucial. You can check over the list of licensed lenders here. It’s essential to engage only with legally sanctioned and reputable moneylenders to prevent potential issues in the future.
Traditional Banks
Personal emergency loans are available to traditional bank account holders.
However, banks usually have stricter loan application requirements, especially for new customers.
A good credit score is essential for bank loan acceptance. Traditional banks may take longer to receive monies than licenced internet moneylenders due to their complicated processes.
Credit Cooperatives
Credit cooperative loans are another possibility. These organisations are known for their flexibility and community focus, typically lending to those with weaker credit scores.
Loan alternatives and terms vary by credit cooperative policy. However, they often offer emergency loans in various quantities. Contact the credit cooperative to learn about loan options and restrictions.
Note that many credit cooperatives have membership requirements. They may lend only to members or long-term credit cooperative members.
Why Get An Emergency Loan from Licensed Moneylender?
Enhanced Approval Potential
Before approving a loan, banks check credit. Credit concerns include late payments, non-payments, and financial issues often dissuade banks from lending.
Emergency loans from licensed moneylenders are simpler and repayable within weeks. They are shorter-term, therefore lenders are more flexible when examining applications.
In Singapore, licensed moneylenders assess your financial situation and ability to repay, not only credit scores. This technique increases the likelihood of getting an emergency loan even with bad credit.
Simple and Convenient Application Process
Securing emergency loans from licensed Singapore moneylenders has many benefits. Their convenience over traditional banks is a major benefit. On-line moneylenders minimise the need for branch visits and lengthy haggling. Online loan applications are simpler, allowing you to apply from home.
Greater Flexibility
You can customise emergency loans from licenced moneylenders to meet your financial demands.
This flexibility lets you get the cash you need without a greater loan debt.
Licensed moneylenders also offer flexible repayment arrangements because each person’s financial position is unique. You can pay off smaller loans faster by shortening the payback time. Extended repayment periods of 3 to 6 months are available for larger loans. Licensed moneylenders also allow early repayment without penalties if you have extra finances.
While licensed moneylenders consider factors like your income and repayment capacity, emergency loans from these entities allow you to customise the amount and repayment terms to better meet your financial needs than traditional bank loans.
Quick Processing
Time is crucial during an emergency financial scenario. Applying on banks or waiting for an extended approval time may not be possible.
If you complete the requirements and provide the required paperwork, licensed moneylenders can disburse your cash in an hour. After submitting your documents online and scheduling an appointment, processing can be sped up.
Savings Potential
Financial emergencies can lead to rejected checks, overdraft fees, and default costs, which can quickly mount up.
Emergency loans from licensed moneylenders can reduce costs by funding urgent demands. However, timely loan repayment is important.
Improve Credit Rating
Credit card overdrawing can be avoided with emergency loans.
Responsible money management, especially avoiding overspending, can improve your credit history, even though licensed moneylenders in Singapore don’t exchange loan information with Credit Bureau Singapore. Managing your money and using emergency loans wisely might help you build or keep credit.
Having a good credit history increases your chances of getting other loan products.
Read also: How do you improve your Credit Score?
The Bottom Line
Occasionally, life presents unforeseen circumstances that demand immediate financial solutions. It’s crucial to remain calm as numerous cost-effective emergency moneylenders are accessible.
When faced with a situation requiring urgent funds, feel free to use our loan matching platform, find the best personal loan offers in minutes.
