You need an amount that your next paycheck cannot absorb in one hit. That is not a crisis. It is a mismatch between timing and need that a structured loan solves cleanly. A monthly installment loan gives you a fixed amount to repay each month — the same number, on the same date, for the agreed term. You know the total cost before you sign. It does not change.
Both are unsecured loans from a licensed moneylender subject to the same MinLaw fee caps. The difference is tenure and purpose.
A payday loan is designed for a 1 to 2 month gap. You borrow a smaller amount, your salary arrives, you repay in full. It is a timing solution.
A monthly installment loan is designed for a larger amount you cannot repay in one go. You repay in fixed equal installments spread across 3 to 12 months. Each month the same amount leaves your account on the same date. You know the total cost before you sign and it does not change.
If you need SGD 5,000 or more and your salary cannot absorb a full repayment next month, a monthly installment loan is the right structure. If you only need a small amount to bridge until your next paycheck, a payday loan is cheaper because the shorter tenure means less total interest.
The critical mistake borrowers make is taking a payday loan tenure on a larger amount. A SGD 8,000 payday loan repaid over 1 month requires SGD 8,320 next month. That is rarely feasible. A monthly installment loan on the same SGD 8,000 over 6 months costs SGD 1,526 per month. That is a number most borrowers can plan around.
MinLaw sets the maximum unsecured loan amount across all licensed moneylenders combined. These limits apply to your total outstanding balance across every licensed lender, tracked via the MLCB
This table shows the exact trade-off between a lower monthly payment and a higher total interest cost.
Every month you add to the tenure saves you on the monthly payment but costs you more in total interest. The right tenure is the shortest one your monthly cash flow can sustain comfortably.
Every licensed moneylender in Singapore must follow these caps. No exceptions.
Interest is calculated on the remaining balance after each repayment. Every payment you make directly reduces what the next month’s interest is calculated on.
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Most borrowers see 4% per month and assume the interest is 4% of the original loan amount every single month. That is not how it works.
On a SGD 5,000 loan at 4% per month, month 1 interest is SGD 200. You make your monthly payment of SGD 954. SGD 200 of that covers the interest. The remaining SGD 754 reduces your outstanding principal. Month 2 interest is calculated on SGD 4,246, not SGD 5,000. Month 2 interest drops to approximately SGD 170.
Every month the outstanding balance shrinks. Every month the interest charged shrinks with it. By month 6, your outstanding balance is small enough that the vast majority of your final payment is principal. You are not paying 4% on SGD 5,000 for six months. You are paying a declining amount each month on a declining balance.
This is why the total interest on a SGD 5,000 loan over 6 months is SGD 723 and not SGD 1,200. The reducing balance mechanism is built into every licensed moneylender loan in Singapore by law. It is one of the most borrower-friendly features of the regulated framework.
If you pay extra above your monthly installment at any point, that extra goes directly toward reducing your outstanding principal. The interest in the following month is then calculated on an even lower balance. You save interest every time you pay more than the minimum.
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MinLaw requires all loan agreements to be signed in person at our registered office. This protects you. We walk through the full contract before you sign. You know the interest rate, the monthly repayment, and the total cost before your pen touches the paper. You can walk away at any point at no cost. Funds are disbursed to you the same day after signing.
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Your repayment date is fixed at 30 days from the date your loan is disbursed. If your salary arrives before your repayment date, you can pay early at no penalty. Let us know your salary date when you visit and we will advise accordingly.
Yes. Any payment above the minimum is applied directly to your outstanding principal. This reduces your remaining balance faster and lowers the interest in subsequent months. No penalties apply for paying more than the minimum at any time.
No. Every installment is the same amount throughout the entire loan term. No surprise final payment, no hidden end-of-loan charges. What you agree to on day one is what you pay each month until the loan is cleared.
Licensed moneylenders in Singapore typically offer tenures from 1 to 24 months. A longer tenure lowers your monthly payment but increases the total interest paid over the loan life. A shorter tenure costs less overall. We show you the comparison at different tenures before you decide so you can choose the one that fits your cash flow.
A payday loan is designed for amounts you can repay in full next month. It is a 1 to 2 month bridge. If your salary next month covers what you owe, a payday loan is the cheaper option because shorter tenure means less total interest. A monthly installment loan is for amounts that need to be spread across 3 to 24 months because your monthly cash flow cannot absorb a single full repayment. If you are not sure which fits your situation, the calculation is simple: can your salary next month comfortably clear the full repayment after your other obligations? If yes, payday loan. If not, monthly installment.
Yes, as long as your total outstanding balance across all licensed moneylenders remains within your MinLaw borrowing limit. Your MLCB record shows the current outstanding balance. If there is headroom within your limit, a second loan can be assessed alongside the existing one.
You can repay in full at any time. No penalties apply. You receive an interest rebate on the remaining months you are clearing. Early full repayment reduces your total interest cost. Contact us before making a full repayment so we can confirm the exact outstanding balance and rebate amount.
Speak to us directly at +65 6684 4129. Repayment date changes are assessed on a case-by-case basis. The most common reason is a change in salary date from a new employer. Contact us before your next due date, not after
Singpass MyInfo retrieves your income and identity data automatically. If you are self-employed, bring your IRAS Notice of Assessment or 3 months of bank statements. Foreigners need their valid work pass and 3 months of payslips or an employer letter confirming salary.
No. Licensed moneylender loans are recorded in the MLCB system, which is entirely separate from the CBS credit report that banks and HDB use. Your monthly installment loan does not affect your CBS score, your HDB eligibility, or your bank credit assessments.
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