A comprehensive guide to short term loans in Singapore

In Singapore, short term loans are becoming popular among people who need quick cash. In this article, you will find out everything there is to know about short term loans in Singapore, including where to get them and how to apply for them.

What are short term loans? 

A short term loan is a loan that is borrowed and repaid over a shorter period, usually ranging from a few weeks to a few months. These loans are designed to help borrowers cover urgent expenses or bridge a temporary gap of need in their finances.

There are a few things you need to keep in mind before taking out a short term loan:

• The interest rate for short term loans is higher when compared to that of personal loans.

• Short term loans tend to be easier to get for people with good credit scores.

• You should only take out a short term loan if you are sure you can repay on time.

Benefits of short term loans 

Short term loans come with several benefits, including:

• Quick approval and disbursement: Short term loans are designed to cater to emergencies and have a fast approval process, similar to a credit card cash advance. Most loan providers can approve and disburse funds in as fast as 24 hours.

• Flexibility: Short term loans are usually unsecured, which means you don't have to provide collateral to get approved. Additionally, you can choose the repayment terms that best suit your financial situation.
  

• No long term commitments: Unlike long term loans, short term loans do not require you to commit to paying them off for several years.

Types of short term loans

There are different types of short term loans available, and the best one for you depends on your financial situation and needs. Here are some of the most common types:

Payday loans 

A payday loan is one of the most popular types of short term loan. They are easy to qualify for, and you can usually get the funds within a few hours of application. However, they also come with high interest rates, usually ranging between 15% and 20%. Payday loans are usually due when you receive your next paycheck and are ideal for small, urgent expenses that you can quickly pay back.

Personal loans 

A personal loan is another popular type of short-term loan. They are usually unsecured and have a fixed repayment period, generally between 1 to 5 years. Personal loans have lower interest rates than payday loans, usually ranging between 4% and 10%. They are ideal for covering unexpected expenses or consolidating debt.

Instalment loans 

If you need a larger loan amount, instalment loans may be a good option for you. They are repaid over a set period with fixed payments and are ideal for larger expenses or debt consolidation. Interest rates for instalment loans are similar to personal loans, ranging between 4% and 10%. Repayment terms usually range between 3 to 24 months.

Merchant cash advances 

If you own a small business with a considerable amount of credit card sales, merchant cash advances may be an option. They are usually approved quickly and allow you to procure the funds within a few days. However, merchant cash advances also have high interest rates, and the loan amount you can borrow depends on your future sales and business growth. So if you are not sure about the financial state of your business in the future, this type of loan might not be the best fit.

Emergency cash loans 

Emergency cash loans are designed to help you cover urgent expenses quickly. They are usually unsecured and have flexible repayment terms. However, interest rates for emergency cash loans are usually higher than personal loans, ranging between 6% to 12%.

Here's a table comparing different types of short term loans:

Where to Get a Short-Term Loan in Singapore?

You can get short-term loans from various financial institutions in Singapore, including banks, licensed loan providers, pawn shops and online platforms!

Licensed loan providers

The licensed loan providers are regulated by the Singapore government and are a safe option for borrowing short term loans. However, their interest rates are usually higher than banks.

Pawn shops

Pawn shops in Singapore have been around for years, and they are one of the easiest places to get a short term loan. These shops accept your valuables as collateral in exchange for cash.

Read More: What Every Singaporean Should Know About Pawn Shops

Online Platforms like Lendela

If you want to save hours of research and are looking for the fastest way to find the best loans, try out Lendela’s service! You only need to take 2 minutes to fill in an online form, then our advanced matching algorithm will search through our extensive list of banks and financial institutions to recommend the most suitable options for your profile. Apply for a loan with Lendela today.