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Cash Advance vs. Payday Loan in Singapore: What’s the Difference?

When faced with unexpected financial emergencies, individuals in Singapore often seek quick cash solutions. Two common options are cash advances and payday loans. While these terms might seem interchangeable, there are distinct differences between the two. Cash Advance vs. Payday Loan in Singapore: What’s the Difference? Understanding these differences is crucial to make an informed decision.

Cash Advances

Cash advances typically refer to a type of loan in Singapore offered by credit card companies. When you have a credit card, you may have the option to withdraw cash from an ATM using your card. This is essentially a cash advance.

  • Key Features:
    • Offered by credit card companies
    • Typically involve higher interest rates than regular purchases
    • Often have shorter repayment terms
    • May incur additional fees, such as cash advance fees and foreign transaction fees

Payday Loans

Payday loans are short-term loans offered by licensed moneylenders in Singapore. They are designed to provide immediate financial relief, often with a repayment due on your next payday.

  • Key Features:
    • Offered by licensed moneylenders
    • Typically have higher interest rates compared to traditional bank loans
    • Shorter repayment terms
    • May involve additional fees, such as processing fees and late payment penalties

Key Differences

  • Lender: Cash advances are offered by credit card companies, while payday loans are offered by licensed moneylenders.
  • Interest Rates: Payday loans generally have higher interest rates compared to cash advances, especially when considering the shorter repayment terms.
  • Repayment Terms: Both cash advances and payday loans typically have shorter repayment terms, often due on the next payday.
  • Fees: Cash advances may involve additional fees like cash advance fees and foreign transaction fees. Payday loans may also have processing fees and late payment penalties.

Choosing the Right Option

The best option for you depends on your specific financial situation and needs. Consider the following factors:

  • Interest Rates: Compare the interest rates offered by your credit card company and licensed moneylenders.
  • Repayment Terms: Evaluate your ability to repay the loan within the given timeframe.
  • Fees: Factor in any additional fees associated with each option.
  • Credit Score: If you have a poor credit score, you may find it more difficult to obtain a cash advance or payday loan.

Responsible Borrowing

Both cash advances and payday loans should be used responsibly. Avoid over-reliance on these options as a long-term financial solution. Consider exploring alternative options or seeking financial advice if you find yourself struggling to manage your finances.

Conclusion

Cash advances and payday loans offer short-term financial relief. However, it’s essential to understand the key differences between the two and choose the option that best suits your needs. By borrowing responsibly and considering the long-term consequences, you can effectively use these financial tools while minimizing their impact on your overall financial health.

Singa Credit is a licensed moneylender in Singapore offering a range of financial solutions, including payday loans. Contact us today to learn more and apply for a loan.


Licensed Moneylender Singapore– Singa Credit Pte Ltd

Established in 1992 and previously known as Yong Seng Credit,
Singa Credit Pte Ltd is Licensed Moneylender in Bugis regularly updated with the latest regulations to be in line with the requirements set out by Registry of Moneylenders.

Please feel free to call 66946166 for more info on our lowest interest rate in Singapore or walk in our office 470 North Bridge Road #02-01