"I have an emergency, where can I get a short term loan urgently?". Short term loans in Singapore come in different forms, from online instalment loans to lines of credit, and can be accessed within very short notice from lenders in Singapore. Although they are more expensive compared to personal loans and mortgages, they can be a good choice for filling short financial gaps.

This post digs deeper into short term loans in Singapore to help you understand how they work, the main categories, and where you can get them. Finally, we will tell you the best way to apply and get your short loan approved even faster.

The average personal loan interest rate in Singapore in 2021

What is a Short Term Loan?

A short term loan is a form of credit that a person takes to finance a personal or business need like a wedding loan or a car loan. You borrow the funds from a licensed lender in Singapore, and the principal is repaid together with interest.

Like other forms of credit, short term loans in Singapore come with terms and conditions that are outlined in the agreement between the borrower and lender. So, ensure to understand all of them and seek clarifications before appending your signature.

As the name "short term" suggests, the loans are cleared pretty fast, usually less than 12 months. This makes short term loans a great option for people looking forward to building their credit scores. Again, the amount you can borrow varies from about $100 to as high as $100,000, but it is advisable to only go for what you can repay comfortably.

Special Advantages of Using Short Term Loans in Singapore

When you make up your mind to apply for a personal loan, here are the main advantages to anticipate.

Short Term Loans Have Higher Chances of Getting Approved

When it comes to short term loans, they are smaller compared to others, such as mortgages and car loans. Therefore, the risk that lenders have to take is pretty small, and most of them will be willing to work with you. However, you should take the opportunity to prove your creditworthiness.

Offer an Excellent Way to Build Personal Credit Score

In Singapore, a person's credit score is very important, especially when it comes to borrowing money or getting phone contracts. However, improving one's poor credit score is never easy. One method that you can use to progressively add points to your score is taking short term loans and repaying on time.

Within a short period, you will notice an upward trend in the score. Remember to also focus on other aspects of credit score improvement, such as credit mix and credit history.

Clearing Short Term Loans is Pretty Easy

Have you ever been stuck with debt and finally managed to wrestle it down? How does it feel? That sense of success is what many people need to change perspectives about life and success.

Even those who had previously feared taking credit can finally get confidence because it is possible to borrow short term loans, use the funds to enhance their lives, and repay without negatively impacting their financial health. To achieve all of these, you simply need good planning and borrowing only what you can repay comfortably.

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What are the Main Types of Short Loans in Singapore?

Short term loans in Singapore come in the following forms:

  • Online loans: As the name suggests, these loans are applied and approved online. This means they are processed faster than most other types of loans, such as personal loans and student loans.

  • Lines of credit: A line of credit works like a credit card. The card comes with an agreed borrowing limit that a borrower can take to fund his/her purchases.

  • Payday loans: This type of short term loan is also processed pretty fast and can be a good option when cash is needed urgently. However, the borrowed money has to be paid the next pay day, and the interest rate is usually very high.

  • Merchant cash advances: This is technically not considered a loan but a sort of advance on credit card sales of an enterprise.

Lenders Offering Short Term Loans

Now that you know the different types of short term loans in Singapore, the next question might be, “Who are the main lenders?” Here are the main financial institutions you can turn to for a short loan:


Banks are the first stop-overs for borrowers looking for different types of loans, from car financing to personal loans. Indeed, many people prefer banks because they charge low-interest rates. Since short term loans tend to be very expensive, working with a reputable banking institution can help you get subtle rates, between 3-6% depending on your credit score.

However, working with banks can be challenging because they have very stringent requirements. For example, most banks insist you need to have an account with them and an excellent credit score for a short term loan to be approved.

Licensed financial institutions

The number of licensed financial institutions in Singapore has been growing steadily over the last ten years and people appear to love them so much. By early 2019, the number of financial institutions in Singapore had reached 155.

Unlike banks, financial institutions do not have a lot of overhead costs, such as the need to maintain expensive baking halls downtown. Therefore, they are able to offer short term loans at lower interest rates than conventional banks. Most of them charge a maximum of 4% for small loans.

Private Lenders

This is another category of lenders in Singapore that you can turn to for short term loans. According to the MA (Cap. 188), private lenders are only allowed to lend money to accredited firms and investors. As an individual, you can only borrow from private lenders if your net personal assets are more than $2 million. Besides, your income for the preceding 12 months should not be less than $300,000.

Unsecured loan Singapore

How to Apply for a Short Term Loan in Singapore

Although there are many lenders in Singapore, we must say that pinpointing the one with the best conditions can be challenging. Imagine having to review the terms and conditions for loans of tens of lenders, all with different requirements. Instead of trying to make the application on your own, there is a simpler, faster, and more convenient way – using Lendela.

Lendela, one of the leading lender comparison sites in Singapore, is premised on the goal of making applications for credit easy and fast. They use advanced loan borrower-lender matching algorithms that make it possible to pinpoint lenders with higher chances of approving your application. With Lendela, short term loan application is cut down into only a few steps:

  • Step one: Make a short application on Lendela’s site.

  • Step two: Get offers from lenders.

  • Step three: Review the offers and select the one with the best conditions. An appointment is booked for you to visit the lender's office for the signing of the loan agreement.

  • Step four: Sign the loan agreement, and the money is released into your account.As you can see, short term loans can come in handy when you need cash to address financial shortfalls. Since they are categorised as unsecured credit, it is prudent to ensure that you have a good credit score and proof of income to be able to repay the loan. More importantly, ensure to apply through Lendela and finally stick to the agreed repayment plan.