What Are Monthly Installment Loans In Singapore?
Sometimes you might need larger sums of money to finance your personal or business activities.
If you take a loan from a lender, one way to reduce your financial burden is by opting for a monthly installment loan.
Under this arrangement, a lender disburses a lump sum of money to you, which you then repay in monthly installments over an agreed period.
So what makes a monthly installment loan different from a payday loan? Why should you choose monthly installment loans?
What Are Monthly Installment Loans?
Monthly installment loans are also called monthly loans by different lenders in Singapore.
The main feature of such a loan is that it caters to larger loan amounts. The repayment term is also longer compared to short-term or payday loans.
Hence, it is possible to take a few years to pay the loan based on your ability to make repayments.
Every monthly repayment (installment) constitutes a portion of the principal amount taken, as well as interest as of that month. Hence, the monthly installment plan ensures the loan will be repaid within the agreed period.
The loan allows you to finance an emergency like a hospital bill, an unexpected personal expense, or even a vacation, without putting too much strain on your finances.
Is A Monthly Installment Loan The Same As A Payday Loan?
A monthly installment loan is usually repaid in monthly payments for a long period to offer more repayment options.
In comparison, a payday loan is a quick cash advance that is repayable for a shorter period.
Unlike payday loans, the payments for a monthly installment loan comprise fixed amounts that go towards both the principal and interest.
You can pay more than the monthly repayment to reduce the principal balance and clear the loan earlier.
Lenders Of Monthly Installment Loans
Monthly installment loans are offered by direct lenders such as banks that issue loans to a borrower directly without an intermediary service.
In Singapore, banks are required to abide by many regulations when granting loans, which results in a higher rate of loan rejection for borrowers.
The eligibility criteria of banks are also stringent, unlike those of licensed money lenders.
For instance, unless your annual income is more than $20,000, you can hardly get an unsecured loan. The loan appraisal and processing procedures at banks are often lengthy due to various requirements.
Hence, if you need cash urgently, a licensed money lender such as BST Credit will offer a faster solution than a bank.
Why Should I Choose A Monthly Installment Loan With BST Credit?
BST Credit is a legal and licensed money lender in Singapore. BST stands for “Begin with Service and Trust”.
If you are looking for a quick loan, BST Credit offers monthly installment loans. Here’s what you can expect:
Quick Application And Processing
At BST Credit, you can make your application online or in person. Approval can be given within an hour. You will receive the funds as soon as you accept the terms and agreement of the loan.
No Reliance On Credit Rating
When you apply for a monthly installment loan with BST Credit, the licensed money lender does not look at your credit score but your current cashflow and ability to pay. This allows you to gradually improve your credit rating.
Fixed Interest Rate
The maximum monthly interest rate of 4% is fixed, regardless of whether the loan is secured or unsecured.
The loan offers manageable installments. You can choose a smaller payment for a longer period or vice versa.
Am I Still Eligible For A Monthly Installment Loan If I Have Bad Credit?
Yes, at BST Credit you can still get approval for a monthly instalment loan regardless of your credit rating.
The amount disbursed at first may not be as high, but will be sufficient to meet your needs. If all goes well, you will be eligible to borrow more in the future.
How Much Can I Borrow For A Monthly Installment Loan?
The amount you can borrow depends on your monthly salary. Local and permanent residents can only borrow a monthly loan up to six times their salaries, from a minimum salary of $1,500 and $2,000 for foreigners.
Licensed Money Lenders In Singapore
Licensed money lenders in Singapore are limited in the amount they can lend, the fees they can charge, and the acceptable interest rate.
You can access the complete list of licensed money lenders on the Ministry of Law’s website. The maximum interest rate that they can charge is 4% per month as of 1 Oct 2015.
According to the Ministry of Law, secured loans are available in any amount. However, for unsecured loans, the total maximum amount that you may borrow at any time from all money lenders in Singapore is as shown below:
|Borrower’s annual income||Singapore Citizens and Permanent Residents||Foreigners 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||6x times monthly income||6x times monthly income|
A monthly installment loan is a long-term loan with a fixed monthly payment that can be repaid for three to five years.
It has a fixed interest rate, no hidden fees, and no rollover payment due dates. This type of loan is ideal when you need a little more time to pay off a larger debt but would still want to pay it off as soon as you get adequate funds.
Before signing up for a monthly installment loan in Singapore, do ensure that you have chosen a licensed money lender such as BST Credit that has been approved by the Ministry of Law.