One of the most successful startups from Southeast Asia, Grab virtually built the region’s thriving gig economy. To help its delivery riders, private hire drivers, and partner merchants, the multi-billion dollar company launched in-house Grab loans that work as short-term funding solutions. In this article, we will explain how these loans work, their eligibility requirements, and how you can apply for Grab loans.
There are two different categories of Grab Loans, one for merchants and one for drivers and riders; see the following table for details.
|GrabFinance Loan||Partner Cash Advance|
|For partner merchants||For Grab drivers and delivery riders|
|Loan up to S$100,000||Loan S$1,000 to S$10,000|
|Loan tenure up to 12 months||Loan tenure 3, 6, or 9 months|
|Daily repayments for the first 27 days of every month||Weekly repayments|
|One-time fee (deducted upfront)||One-time fee (based on an interest rate of 2% per month)|
Restaurants, eateries, and convenience stores that sell their products on the Grab platform can apply for the GrabFinance Loan to help grow their business.
This loan is capped at S$100,000 – business owners may appeal for a larger loan if desired – and comes with a maximum loan tenure of 12 months.
There is no ongoing interest charged on this loan, just a one-time fee that is deducted from the amount disbursed. This is equivalent to approximately 7.7% of the principal, although the exact fee you will be charged may differ.
What’s unique about this loan is the repayment schedule. Instead of monthly instalments, daily repayments are deducted directly from your Grab earnings. These repayments are adjusted according to your takings for the day, and if your store is closed for the day and there are no sales, no deductions will be made.
Note that repayments are taken from your Grab earnings on the first 27 days of the month. This means that your daily repayment amount is calculated by dividing your loan amount by your loan tenure (number of months) and then dividing it by 27.
For example, for a S$20,000 loan with a 6-month tenure, the daily deduction formula would be:
- S$20,000 / (6 months x 27 days)
If you’re a private-hire driver or delivery rider looking to apply for a Grab Loan, you can refer to the Partner Cash Advance programme.
Drivers and delivery riders can apply for loans of between S$1,000 to S$10,000. There are three different loan tenures to choose from: 3 months (13 weeks), 6 months (26 weeks), or 9 months (39 weeks).
The loan is repaid via weekly deductions from your Grab account. There is a one-time fee charged – deducted from the loan disbursed – calculated based on the loan tenure at a rate of up to 2% per month.
Other than that, there are no interest charges or late payment fees, so borrowers will not face increasing debt. There are also no extra charges for early repayment.
How much you can borrow is impacted by your driving behaviour and earnings over the most recent three months. However, note that there are also other factors that Grab takes into consideration when assessing your loan application.
Grab loans are undoubtedly one of the lowest-cost loans you can find, but they are reserved only for Grab partners – merchants, drivers, and riders – who meet the eligibility requirements.
For merchants, you will have to be in business for at least 6 months, while drivers and riders have to have at least 3 months driving for Grab. This means that Grab loans are not ideal if you’re just starting as a Grab partner and are looking for funds to kickstart your business.
As an alternative, consider an unsecured business loan from a licensed moneylender in Singapore. Unlike bank loans, you do not need to have a good credit history to qualify. The loan application process is also simpler, with fewer documents required.
Synergy Credit offers low-interest loans and speedy loan approval in 20 minutes or less. Apply for your loan today.