It’s inevitable for people to be tight on the budget due to many factors. Especially, these days when many are making the most just to make ends meet. This is why taking up cash loans from a trusted money lender in Singapore is beneficial. It allows borrowers to cover up their expenses, also to pay their extra bills, purchase their much-needed items and even get out of debt.
As repaying this kind of deal may be overwhelming, apparently, there are many options you can consider to avoid its potential cost inconvenience. We’ll talk about the perks of using 12-month loans.
What Is a 12-Month Loan?
As the name suggests, like any other payday advances given by moneylenders, 12 month loan lenders Singapore is a type of emergency deal. The idea of the 12-month cash loan comes from Britain and the United States where a borrower can get a loan and pay them back over a period of 1 year.
As mentioned, they are also referred to as payday loans because the idea behind them is that people can take what they need till they get paid and then pay the loan back as soon as they receive an income.
It’s worth noting the industry in the US is a multi-billion dollar and has grown to astronomical proportions in the last few years. These deals are usually given without the requirement of any securities which can also be disbursed within as less as one day.
The purpose of 12 month loan lenders Singapore is to aid customers to deal with imminent financial liabilities like bill payments, school fee payments, emergency expenses etc.
Features of the 12-month loan:
- 12 months or payday loans are usually short-term loans that are usually due when the borrower receives his or her next paycheque or salary.
- It’s considered a quick cash. The loan amount is disbursed very quickly by the moneylender; oftentimes even in a day’s time from the date of the loan application.
- Payday loans may be approved by a moneylender even if your credit history is not up to the mark.
- These legal money are typically available to those who are above the age of 21 years old and have a regular salary in Singapore
- While these types of loans should be paid back once you receive your next salary, the quantum of this loan is generally quite low compared to most of the loan types.
- You can avail of this loan and get approvals online which means there is no need to run around to get your loan application approved.
Loan amount may normally vary depending on where moneylender a borrower would have their applications. However, the Monetary Authority of Singapore (MAS) currently limits how much you can borrow to 12 times your monthly income. This is to ensure that Singaporeans don’t over-borrow and suffer from financial difficulties, which could have negative effects on the overall economy.
According to the Ministry of Law, for secured loans, you can obtain a loan of any amount. For unsecured loans, please refer to the table below for the total maximum amount that you may borrow at any time across all moneylenders in Singapore:
| Borrower’s annual income | Singapore Citizens and Permanent Residents | Foreigner/s residing in Singapore |
| Less than $10,000 | $3,000 | $500 |
| At least $10,000
and less than $20,000 |
$3,000 | $3,000 |
| At least $20,000 | 6 times monthly income | 6 times monthly income |
On the other hand, with effect from 1 October 2015, the maximum interest rate a licensed moneylender in Singapore can charge is 4% per month. This cap applies regardless of the borrower’s income and whether the loan is an unsecured or secured one. If a borrower fails to repay the loan on time, the maximum rate of late interest a money lender can charge is 4% per month for each month the loan is repaid late.
The computation of interest rates charged on the loan must be based on the amount of principal remaining after deducting from the original principal the total payments made by or on behalf of the borrower which are appropriated to the principal.
Pros of short-term loans:
1. Rapid distribution of funds with minimal collateral or background checks. The biggest advantage of a short term loan is that, upon approval of the money lender in Singapore, it’s likely borrowers will receive funds shortly after.
2. Short-term loans are offered even to those with bad credit. Normally, banks will review your credit report before supplying you with a loan, and if your credit report is not up to their standard, your loan request will not be granted, as they will deem you too high a risk. Short-term lenders, meanwhile, are much lenient on your credit report and will assess your loan by analyzing other avenues such as asset values.
3. The repayments are flexible. Most money lending institutions offer borrowers more convenient loan tenures depending on one’s capability in paying, financial situation and other contributing factors.
4. It can improve your credit score or credit rating. The great thing about short term loans is that they give your credit score a boost. This can be helpful in getting longer-term loans and bigger lines of credit in the future.
5. As it is a short-term loan, it’s given to be a short-term debt. It is evident longer terms could be tough and may put borrowers into trouble if not taken seriously nor handled well. Knowing you’re not committing to a debt that takes forever to repay gives borrowers peace of mind and convenience. Remember that the longer you owe something, the higher the chance of you running into financial issues that make it difficult to make timely payments.
Cons of short-term loans:
1. These deals which are unsecured may apparently carry greater risks for lenders in terms of the likelihood that borrowers will default, thus interest rates can be a bit higher than expected. Rest assured legal lenders should meet the guidelines made by the Ministry of Law regarding the maximum percentage of rates.
2. Most short-term lenders charge late payment penalties and/or arrangement fees. It’s necessary that you check the terms and conditions prior to applying so you are comfortable with these extra charges. Also, look about for early repayment fees if you want the flexibility of repaying your loan early.
3. The flexibility, convenience, and easy availability of these loan packages can make you a seasonal borrower. You may find yourself hooked towards borrowing whenever you need some money which is risky. Note that it’s best to take something that you afford and will be able to repay or else you will fall into debt.
Where to Apply for 12-Month Loans?
To get loans without hassle with just a 30-minute approval, check Bugis Credit Pte Ltd. It is one of the most trusted licensed moneylenders in Singapore which offers a variety of deals, such as personal loans, with flexible repayment plans and no hidden fees!
With Bugis Credit Pte Ltd ‘s personal loan Singapore, people can enjoy borrowing unsecured loans in Singapore with a fixed monthly interest rate, competitive interest rates with no collateral. Foreigners can also apply for its deals with ease. The good thing is that the repayment amount is fixed as well, making it more convenient for a borrower’s budget.
How to Apply?
For local and permanent residents in Singapore, they must have and/or present a:
- Minimum salary of SGD $2,000
- An identification card
- Proof of residence such as a utility bill, a letter addressed to the borrower or a tenancy agreement
- Proof of employment and proof of income such as a certificate of employment or recent three months payslip
- SingPass
For foreigners, they must have and/or present:
- Passport
- Working permit or S Pass or E Pass
- Proof of residence in Singapore such as utility bill or tenancy agreement
- SingPass
To apply for a personal loan and any type of loan in Singapore, you can call the licensed moneylender or enquire online or visit their office. To enquire and to finalize a loan plan that fits your needs over agreeing on terms and payments. Rest assured will be given the cash shortly after. Remember that you must be at least 21 years old to apply.
It may seem a bit tricky to look for the best deals, but apparently, with proper knowledge, you’d be able to get the most ideal loan to cater to your financial needs. Hopefully, with the wide range of options to consider, you can take that next big purchase you have been waiting upon availing a 12-month loan in Singapore!
