Unfortunately, for many Singaporeans, economic uncertainty has transformed into a reality of our times. While it’s true that we live in one of the most financially developed countries in Asia, and that many of us earn, on average, per month, somewhere around $S5,000, the harsh truth is that unexpected financially surprising expenses are still a challenge for a significant percentage of the population. We are all only one external event away from facing an economic situation that we are probably unequipped to deal with.

Sure, you have savings in your bank, and you are most definitely wary about your expenses and prudent about accumulating new debt. But let’s be honest for one second. Do you have enough money saved up to last you for multiple months without an income? Can you truly say that you are financially prepared for any type of expense, regardless of the involved costs? If the answer is yes, congratulations, you have my respect. But for the vast majority of us, financial freedom regardless of circumstances, is more of a luxury than a reality, and for unexpected circumstances outside of our direct control, utilising personal loans is the only way to gain the right funds for our ambitions and situation. 

We’ve all been there, right? Me included. Everything is going fine in your life, and suddenly you are hit with an unwanted expense that you can’t postpone without significantly challenging the stability of your daily living. From medical expenses that require procedures from a private clinic to perhaps a house repair or a mechanical problem with your car, every day we are at risk of being faced with expenses that we can’t control. That said, what we can do is apply for a personal loan that will hopefully keep them under control. 

Why A Personal Loan? 

Well, what’s the alternative? Singapore is a prosperous country, that’s true. However, a significant percentage of our compatriots don’t have the necessary savings to last for six or more months without a regular income. Likewise, in some way or another, we are all at risk of economic challenges if we are faced with an expense that requires a financial effort above what we can afford right now. 

Who cares, really, if you have $50,000 in the bank, as long as your expenses require a $70,000 effort? It will be the same if you had just $10,000 in your account, and you are faced with a $15,000 bill. It’s irrelevant after a point, and it’s why you can’t always rely on savings. In some situations, you could simply have bad luck and require external help regardless of your financial stability up till that point. But it’s not all bad news. Yes, of course, nobody wants to actually utilise the services of lenders and get into debt for expenses that were unplanned. But ultimately, we can only play with the cards we have at hand. 

Medium-length personal loans in Singapore are a way to gain the right funds for unexpected and unwanted expenses, fulfil your ambitions, positively impact the well-being of your family, or invest in business opportunities that will hopefully result in a positive ROI. Personal loans, at least in Singapore, are popular financial aid packages that will be utilised, or at least considered by each of us at some point in our lives. They don’t need to be used only for unexpected payments. In fact, they are a way to gain fast cash, with no questions asked, that you can later use however you want. 

A Payday or a Personal Loan? 

That’s entirely up to you and the situation you are going through right now. Payday loans are short-term financial aid packages that are characterised by higher interest rates than a conventional personal loan, and are used to cover emergency expenses, such as rent or grocery shopping, for a couple of weeks. The sums involved are lower than is the case for personal, unsecured loans, and the repayment period of the credit is capped, usually, at only one month. They are called payday loans for a reason. Once you get your monthly check, you are expected to pay off your debt, including the accumulated interest. 

You might be thinking, “This doesn’t sound like such a bad deal.” And you are right. Since the maximum interest rate associated with private credits in our country is limited by the Moneylenders Act of 2008, payday loans are capped at an interest of 4% per month. Long-term, this will be a terrible deal. But, for a quick cash infusion that you will return at your next payday? They can actually make sense. 

Personal loans in Singapore, on the other hand, are characterised by longer repayment periods, bigger sums involved, and the interest rates associated with the credit are also lower. A personal loan can be utilised for pretty much any type of expense you can think of, and it’s also a solution if you want to pay off your debt and merge it into a single financial aid credit. DCLs, after all, are a subset of personal financial loans. That said, what is appropriate for your situation will depend on a multitude of factors and will require a great deal of consideration from your part. 

What Would I Choose?

In your case, it will really depend on the specifics of your situation. Do you only need a short-term cash infusion until you get back on your feet? Have you, for example, started a new job, and you require a bit of help this month until you get your first paycheck? Well, in that case, if I were in your place, I would go for a payday loan. That said, if more money is needed, and you don’t mind paying an interest rate for multiple months, a payday loan is probably a better deal. 

In fact, I was in the same place a couple of years ago. I recently graduated from college, and I found myself in a situation in which my degree didn’t provide the career opportunities I had envisioned. The money was drying up, and so I needed to make a change. Since I was working part-time at the time, I had some issues obtaining a loan, but eventually I managed to secure a personal loan from a private lender, which allowed me to invest in some courses that later propelled my current career. It was a good choice in the end, and one of the main reasons why I am here today is that I was not afraid to take on debt at that time.