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Payday Loan Interest Rates: Cost of Getting a Payday Loan in Singapore

Getting a Payday Loan in Singapore
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An average Singaporean would normally get by with a monthly paycheck, but sometimes, an unforeseen expense gets in the way of the budgeting, and your available cash won’t be able to bridge the gap until your next payday. 

A payday loan is a short-term solution that is easy to acquire with fewer requirements and is lenient on your credit score. Since the repayment term is shorter, usually at a maximum of one month, the loanable amount cannot be greater than your monthly salary. 

Unlike personal loans, which let’s say you’ll take from a bank, payday loan is ideal for borrowers who need quick cash and can repay the full amount on the next payout schedule, including the standard 4% interest rate and the upfront processing fees. It might be bigger than the bank’s average 2.5% interest rate with longer tenure, but it is not without its pros and cons. 

Let’s take a look at how this works.

Payday Loan Interest Rates Singapore

Firstly, Payday Lenders must be Licensed Moneylenders. It is very much safer, and they follow a legal and standard interest rate and fees that the Ministry of Law mandates:

  • 4% maximum interest rate per month
  • An upfront administrative fee not exceeding 10% of the loan principal granted.
  • A late payment fee not exceeding $60 per month if the borrower is unable to meet the repayment schedule.
  • Legal costs ordered by the court for a successful claim by the licensed moneylender for the recovery of the loan

Read also: Moneylender Guideline & List of Moneylenders in Singapore

A late interest fee can only be charged on the amount that is repaid late. Suppose you take a $2,000 payday loan. The 4% interest is $80 plus the $200 processing fee sums up to $2,280. 

Let’s say you are only able to settle $1,500, the late interest fee must only apply to the unpaid amount of $780, so it is advisable to always take a payday loan within your means and settle on time to avoid the instalment burden. 

Pros and Cons

Now let’s look into the benefits and risks of taking out a Payday Loan. 


  • Lenient credit score check. You may still be able to apply easily even if you have a bad credit history. 
  • Fast cash disbursement which can be approved within the day or just a few minutes.
  • Accessible through various licensed moneylenders.
  • Unsecured or no collateral 
  • The loaned amount can be used for any purposes
  • The successfully settled loan can help increase your credit score


  • Higher interest rate compared to Bank Personal Loans or Credit Card interest rates.
  • Shorter repayment terms 
  • Potential debt snowball if unsettled within the repayment period due to high interest rates and additional late payment fees. 
  • Smaller loanable amount not exceeding your monthly income

When taking out a payday loan, always consider it an advanced salary to meet your expenditures and settlement terms. Because it is simple and easy to acquire, it shall be intended only to fulfill your emergency and temporary needs.

Payday Loan vs. Personal Loan: What’s the difference?

Both payday loans and personal loans can be used for any type of emergencies or immediate expenditures. That’s why you might be weighing which is more advantageous to you. Let’s compare them.

Payday Loan Personal Loan
Annual Income Requirement Less than $20,000 More than $20,000
Loanable Amount Not more than your monthly income Up to 6 times your monthly salary
Repayment Period 1 month (a few days/weeks or until your next payday) 6 months to 1 year or longer
Other reasons No access to credit cards or personal plans


Personal loans can be acquired from banks and licensed moneylenders, while payday loans can only be taken from the latter. The interest rates would vary depending on which institution you would apply for but, you would be earning more interest savings with personal loans since the bank’s interest rate is lower and should cost you only about 7% of annual interest. 

Aside from the larger loanable amount with personal loans, the loan tenure provides a longer repayment period. With that comparison, we can conclude that payday loans are only a good alternative if you only need a small amount, you did not meet the requirements of a personal loan, and you can repay within a short period of time.

Best Payday Loan Providers in Singapore

It is important to only seek a payday loan with licensed moneylenders. Not only are they safer, but they also provide borrowers with the most detailed loan terms and utmost professional services. Loan Advisor has enlisted the best payday loan lenders in Singapore that you can easily tap with our loan comparison service. 

Interest Rate Maximum Loan Amount
Fortune Credit 1-4% 1-month salary
365 Credit 1-4% 1-month salary
1 Fullerton Credit 1-4% 1-month salary
Bugis Credit 1-4% 1-month salary
Raffles Credit 1-4% 1-month salary
A1 Credit 1-4% 1-month salary

How Much Can I Actually Borrow?

Payday loans are unsecured loans. We have previously mentioned that the loanable amount may be equivalent to or lower than the borrower’s 1-month salary.

In this case, payday lenders would usually require the borrower to have a minimum monthly income of $1,500 and must settle the interest and fees within one month or on the borrower’s next payday. 

On the other hand, secured loans with licensed moneylenders would allow you to borrow more than your monthly paycheck.

Who Are Eligible to Apply for a Payday Loan in Singapore?

Moneylenders have different requirements for every type of borrower. To know if you are qualified, refer to our table below.

Singaporeans and PRS Foreigners Working in Singapore
  • At least 21 years of age
  • With a minimum monthly salary of $2,000
  • Identity Card
  • Proof of residence (utility bill, tenancy agreement, etc.)
  • Proof of employment (employment letter your tenure is less than 3 months)
  • Recent 3 months of payslip
  • SingPass (to log in to CPF, HDB IRAS Website)
  • At least 21 years old
  • Minimum monthly salary of $3,000
  • Passport
  • Work Permit / S-Pass/ Employment Pass
  • Proof of residence (utility bill, tenancy agreement, etc.)
  • Proof of employment (employment letter your tenure is less than 3 months)
  • Recent 3 months of payslip
  • SingPass (to log in to CPF, HDB IRAS Website)

How Do I Know if a Moneylender Is Licensed?

The easiest way to find out if your preferred payday loan lender is licensed is by checking the Ministry of Law’s full list of authorized lenders. It is always advisable to perform due diligence when taking out a loan so you’ll have peace of mind that you are not dealing with loan sharks. Should you come across one, you may report to 1800 2255 529.

Additionally, to help you make smarter financial decisions, Loan Advisor could help you compare your loan options with our free loan comparison service. We can bring you closer to the best loan quotes from Singapore’s top licensed moneylenders, so you won’t just save on time, but you would also get the best interest rates available. 

How to Apply for a Payday loan?

  1. Compare the best payday loan options from Loan Advisor. Like any other loan, it is best to know your options first to compare the interest rates, loanable amount, and repayments terms from the best moneylenders that best match your needs. 
  2. Call or apply online. Once you have decided on your preferred lender, loan application forms can be filled online. Your preferred lender will reach out to you within a few minutes to set an appointment to discuss with you the loan details and terms. 
  3. Visit the lender’s office. Licensed moneylenders affiliated with Loan Advisor have several offices conveniently located in various districts. To create your customized loan plan, appear at the appointment so you could also clarify any concerns right away. 
  4. Finalise loan plan. Before signing the loan agreement, make sure that you understand the repayment terms, total repayment amount, and payment schedule. 
  5. Receive your cash and secure a copy of the loan contract. Licensed moneylenders disburse cash instantly. Keep in mind that the borrowed amount must be repaid on time to avoid penalties. 


How long will it take for a payday loan application to be approved? 

As soon as you have the requirements and you qualify for the payday loan, it will only take a few minutes to an hour for you to receive your cash disbursement at your appointment schedule. Payday loan lenders understand that borrowers opt for a payday loan as a short-term financial solution, hence the simpler requirements and fast approval and the short repayment period. 

Can I apply for a payday loan even with a bad credit score?

A payday loan is an unsecured loan that does not require any collateral. The sum that a borrower can take is usually smaller, so the risk is also low. That’s why payday loan lenders or licensed moneylenders are lenient with credit scores. 

Although the process may be simpler, the short loan tenure could potentially put the borrower into a deeper debt due to the higher interest rate and late interest fees should the borrower miss the payback terms. 

How do I get the best payday loan rates?

With the slew of moneylenders in Singapore that offer payday loans, it is easy to get bewildered with options. To get the best payday loan rates, Loan Advisor’s loan comparison service can provide you with three free loan quotes only from the best licensed moneylenders with the most competitive rates. Not only is it convenient and time-saving, but you can also read real-people reviews about their loan experiences that are helpful in making an informed financial decision. 


There really isn’t a hard or a fast rule whether a borrower should opt or not for a payday loan in Singapore, but the restrictions that payday loans come with should frame your decision-making. Here are a few things to consider when taking out a payday loan.

  • Take a payday loan only when really needed. 
  • Consider other financing options or other loan types that are more intended for your expenditure. Some fine examples would be student loans or renovation loans, which could be of lower interest rates, higher loanable amounts, or more tailored terms and conditions that would make the repayment easier. 
  • Prioritize on-time payment to get rid of spiraling into debt. 

We’ve covered all the payday loan essentials, and if you think this is the right loan for your immediate needs, it’s time to get to know your loan provider options.

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