Imagine all the things that can go wrong at any moment: an accident that requires hospitalization, an unforeseen funeral, or an unplanned trip. If you are like most people, chances are that you might not have enough to cover for these expenses in your savings account.
If you need cash immediately, there is a better solution than applying for a personal loan at a bank. We all know banks have lengthy approval processes and demand lots of paperwork, including your credit score. This might be a huge deterrent factor for those with poor credit scores.
This is why you should choose an urgent emergency loan. Just be careful: not all these loans are created equal.
However, fret not as we are here to help.
We will help you find out the differences between urgent emergency loans and other financing solutions. We will also analyze their pros and cons, maximum amount, and eligibility requirements. In worst-case scenarios, we will also help you draft a plan-B if the bank rejects your loan application.
That way, you will choose the best loan for your needs, and get out of your financial muck with more options than before.
What Is An Urgent Loan?
Just like their name suggests urgent loans are quick money you can borrow from a licensed financial institution. They can be used to cater to any unexpected emergencies that have occurred. However, because they are so fast, you will be able to borrow a smaller amount and repay it on a shorter tenure. More importantly, due to their fast application and processing time, you will be able to receive your funds within the hour!
That said, urgent loans spare you the hassle of bureaucracy, submitting endless paperwork, and facing rejections because of your low credit score.
Pro tip: Urgent emergency loans can be used for whatever you want, without any explanations.
Here is why:
You receive the money, either in cash or via bank transfer.
So, if your pipes need replacing, you can also buy new kitchen cabinets with the leftover money. By comparison, renovation loan funds are wired to your contractor, and you are unable to use them for other purposes.
The urgent emergency loans advantages do not stop here:
For example, you will get a more considerable principal amount and lower interest than a credit card advance. You also have a more extended repayment schedule than with a payday loan.
Let us help to analyze your options:
What Are The Types Of Urgent Loans?
1. Personal Loans
Some personal loans that banks put forth have similar terms and approval processes to emergency loans. This solution is suitable if you:
- Want a more massive principal amount
- Can wait a couple of days
- Your credit score is high
You already know how personal loans work: a financial institution will lend you money, which you will repay, along with interests over a preset schedule.
That said, the downside of a personal loan for urgent expenses is filling all the necessary paperwork. Some banks will demand to see high, regular paychecks of at least $2,500/ month and high credit scores.
With licensed moneylenders, their application process is usually very quick. From the completion of the loan application form to funds disbursement, the entire process can be completed within a few hours!
2. Payday Loans
Payday loans offer quick cash without collateral.
But here is the catch: the repayment deadline is on your following payday.
If you want to borrow more money and want more repayment flexibility, choose an urgent emergency loan with a licensed moneylender. They will be able to customize flexible repayment schemes with affordable installments to ensure comfortable monthly repayments.
3. Credit Card Advance Loans
Credit card advance loans are cash you withdraw from the closest ATM. That means they are the fastest type of loan.
For example, if your credit card gets declined in the middle of your shopping spree, you can easily borrow some extra money within your available balance, with no paperwork required.
But here is the gist:
Most financial experts do not recommend cash advance loans.
Credit cards have high-interest rates, and they are very tempting to use because they are always in your pocket. This is why so many Singaporeans struggle with snowballing credit card debt, according to CBS.
Why Do You Need An Urgent Loan?
Singaporeans take up urgent loans for various needs. Some of them need living expenses after retrenchment, while others simply want a vacation.
Here is a list of the usual reasons behind an urgent loan:
- Accumulating bills
- Essential car or home repairs
- Solving a pest problem
- Cash advance for securing rent someplace else
- Health problems for your pets
- Hospitalization and surgery bills
- Debt consolidation
- Sudden death in the family
- An exotic holiday or an unplanned trip
- Education bills
- Starting an emergency account
The second question is, why should you take an urgent loan to solve these issues?
- Fast approval: So-called emergency personal loans from a bank will still take a few days to be approved. Conversely, your urgent loan can be processed within an hour.
- Convenient interest rates: Other types of loans have higher interest rates. If you miss several payments, the debt becomes harder to repay. Even if you repay your loan on time, the total amount is much more considerable than that of an urgent loan.
- Less paperwork: Urgent loans have laxer eligibility requirements and, consequently, less paperwork. This also means easier eligibility, especially for those suffering from poor credit
How Much Can I Get For An Urgent Emergency Loan?
The maximum amount you can borrow with an urgent emergency loan is essential. You need enough money to solve your entire problem, not just a portion of it.
But here is the thing:
Even if you can access massive funds, make sure you can repay that amount first.
That said, here are the factors that influence how much you can get:
As a rule of thumb, licensed moneylenders in Singapore are able to offer loans up to 6x your monthly income. That said, banks like DBS can offer ten times your monthly salary. The catch? Your annual salary must be at least $120,000.
Sadly, people with high incomes can get more instant cash faster than people working low-paying jobs.
Remember that some banks impose a minimum limit for your yearly income of at least $20,000. If you want to obtain more money, include all income sources in your application, not just your salary.
If your credit score is high, banks trust you with higher principal amounts and lower interest rates. The reason is that better credit scores indicate a lower default risk.
Here is what risk grade your credit rating indicates, according to CBS:
|Credit Score||Risk Grade||Probability Of Default (Min)||Probability Of Default (Max)|
Luckily, you can learn useful money management techniques to improve your rating. Although it takes months for your credit score to change, some moneylenders take your goodwill into account. For example, starting a credit counselling program shows a lower risk of default.
Who Can Apply For An Urgent Loan In Singapore?
Eligibility requirements vary for each provider. However, for licensed moneylenders such as GS Credit, here are the requirements:
- Be a Singapore Citizen, Permanent Resident, or a foreigner with a valid work permit
- Be at least 21 years old
- Be employed / self-employed
As for how much you are able to receive from an urgent loan, the maximum loan amount depends on your income. As such, you can receive:
For Singapore Citizens and Permanent Residents (PRs):
- Up to $3,000, if your annual income is less than $20,000
- Up to 6x your monthly income, if your annual income is above $20,000
For Foreigners residing in Singapore:
- Up to $500, if your annual income is less than $10,000
- Up to $3,000, if your annual income is at least $10,000 but less than $20,000
- Up to 6x your monthly income, if your annual income is above $20,000
How Do You Choose The Right Urgent Loan?
Choose the right urgent loan by evaluating your needs and your financial power. Firstly, analyze your budget to establish the maximum monthly installment that you can pay comfortably. Then, assess your current problem to ensure you are not spending more cash than you need to.
Pro tip: Write down all your objectives, expenses, and income for an accurate analysis of your situation.
That said, here is how to choose the best loan provider:
1. Maximum Amount
After you have sketched your plan, choose a moneylender who can offer you the right amount. Make sure you can repay it in convenient monthly installments that do not affect your essential expenses.
Pro tip: Limit your loan applications to keep your credit score high.
2. Repayment Schedule
Choose the right tenure according to your needs:
- Long terms: low-interest rates and increased repayment flexibility. They can also increase your credit score if you are making timely repayments.
- Short tenures: the total loan expenses at the end of your term are lower. You are debt-free faster.
That said, most urgent loans usually come with a shorter tenure. They are used to cater to a particular emergency, making it more of a short-term loan.
3. Interest Rate
Rest assured that at GS Credit, we will tailor an urgent loan specifically for your needs. Interest rates will also be reasonably charged according to your financial capability.
4. Extra Fees
Some banks in Singapore impose processing fees of about $200 to hasten your application process. However, licensed moneylenders do not charge a fee to simply speed up your application process.
That said, the only fees that licensed moneylenders are permitted to charge are late payment fees, along with the late interest. This is why it pays to work with a comfortable repayment schedule to ensure that you do not default on these fees and incur unnecessary late payment charges.
5. Picking The Right Licensed Moneylender
Do a quick background check on the licensed moneylender of your choice. Make sure that they have excellent Google reviews.
High client satisfaction indicates a knowledgeable and friendly provider who will work in your best interest. These features are essential in case you ever want to renegotiate your loan conditions.
What Are The Documents Required For An Urgent Emergency Loan Application?
Here is what financial institutions in Singapore typically ask before approving an urgent loan request:
For Singaporeans / PRs:
- Proof of identity (NRIC, passport)
- Proof of income (CPF / bank statements)
- Work Permit / S Pass / E Pass
- Proof of residence (Utility bills, phone bills, tenancy agreement, etc.)
- Payslips / bank statements
Pro tip: Apply online with your SingPass to shorten the application process.
What If My Loan Application Is Rejected From Banks?
Unfortunately, some Singaporeans who apply for urgent loans face rejections. This is when some of them make the wrong decision of turning to a loan shark.
Warning: Loan sharks, aka Ah Longs, are illegal. These dangerous individuals employ extortion tactics and harass their victims. Some of them use abusive language and harm their victims physically.
Instead of turning to a loan shark, try some of the solutions below:
- Take a loan from one of your relatives or friends.
- Ask a loved one to co-guarantee a loan.
- Apply for a secure loan.
- Pawn a valuable or branded item at a pawnshop.
- Sell something you own and do not need anymore.
- Rent a room in your home.
- Secure a part-time or freelance job to increase your income.
- Find a loan on a peer-to-peer lending platform.
- Budget your expenses and cut back on all unnecessary payments.
- Try a donation website.
- Try credit counselling.
The best solution, though, is seeking out a trustworthy moneylender.
Why Should You Apply For An Urgent Loan From Licensed Money Lenders In Singapore?
An urgent loan from a moneylender is the next best solution if you have been constantly rejected by banks. Or, simply because you need the funds to cater to your emergency quickly.
- The interest rates are reasonable.
- You do not need to sacrifice your things by selling or pledging them since urgent loans are unsecured.
- You will not be rejected simply due to your poor credit score.
If you are looking for an urgent loan because of a sudden emergency, GS Credit will be more than happy to help. With years of expertise and excellent Google reviews, an urgent loan from GS Credit can prove to be a quick and great source of financial help.
Apply for an urgent loan today and get approved within minutes!