Where To Get A Short Term Loan In Singapore
February 19, 2023
You’ve got an emergency and need a short-term loan urgently to take care of a situation before it gets out of hand.
You call your friends and family but all you get is “sorry, I wish I could help” as they hang up on your calls. You wish you knew a reliable source where you could get a loan hassle-free but then you’re stuck with a lot of questions in your mind.
If you’ve been in this situation, do not fret. In this article, we’ll answer all your questions about loans, including where to get a short term loan in Singapore.
But before we get there, let’s get started with what a short-term loan is.
What Is A Short-Term Loan?
Short-term loans – as the name implies – are loans that you have to pay back within a short period of time – usually between one to 12 months with a varied repayment period that is anchored on the loan amount, rates, and installments.
In Singapore, these loans range from $500 to $35,000 and are usually unsecured –which means you don’t need collaterals to get one. They are also approved within a short period of time.
How Can Short-Term Loans Help You?
There are several situations that a short-term loan might help you. They include:
- Short-term investments
- Paying school fees or rent
- Offsetting long-term loans
- Purchasing raw materials or restocking
These loans can avail the money quickly, fulfill your requirements, and once you have settled everything that was urgent, you can quickly repay them back.
But before deciding to apply for a short-term loan in Singapore, it is important to first understand the various types that are available. Let’s take a look.
Types Of Short Term Loans In Singapore
In Singapore, there are a few types of short-term loans available for anyone that needs them. They include:
1. Invoice Financing
Did you know that you can take your outstanding invoices and get a loan in exchange?
Well, invoice financing, also known as “accounts receivable financing,” is a form of loaning that allows you to get a loan by simply showing invoices that are due to be credited with payments.
Let’s put this into perspective. What happens with invoice financing is invoice factoring, which involves selling an invoice to the lender, who gives you a loan of up to 80% of the invoices.
After this, the client that owes you money pays the financial institution the percentage they gave you and sends you the remaining balance.
2. Payday Loans
You’re in Singapore and need a lump sum of money to pay off your bills before they’re due. But when you check your accounts, payday is still a number of days or weeks away.
Did you know you can approach a financial institution with a post-dated cheque and have them pay you the funds now so that you can take care of your bills?
They’ll deduct the amount and interest from your bank account once the post-dated cheque funds arrive.
One feature of this type of loan is that the financial institution will deduct the full amount loaned to you as well as their interest.
Although it sounds like a good idea at first, make sure you’re able to service it and have kept your word to the lender. Otherwise, it may land you in more trouble than you anticipated.
3. Line Of Credit
This is a flexible personal loan that works pretty much like a credit card. The line of credit is characterised as an overdraft facility that gives you a predetermined credit limit, which you can use at any time as the need arises.
Let’s say your line of credit is $10,000. You can withdraw or spend any amount on your bills and enjoy an interest rate equal to the money you spend, provided you don’t go over and above your credit limit.
What happens with this kind of loan facility is that you’ll not be charged any interest outside the money you have spent from your line of credit. This is why this type of short-term loan has become a go-to for many people in Singapore.
4. Merchant Cash Advance
Merchant cash advance – as the name suggests – is not really a loan but a financial assistance that a business or individual secures by simply exchanging future debit/credit card sales with a lender.
In Singapore, if you don’t qualify for a bank loan, you can visit a merchant (lender) near you and borrow a certain amount of money by exchanging that with sales you’re expecting to make in the future and allowing the merchant to have direct access to your credit facility.
To repay, a “holdback amount” is agreed upon between you and the merchant that requires you to remit a certain amount of money to them daily from your sales until you clear off the loan.
While this credit facility or loan is easily available, it is expensive, especially if you’re not certain of meeting your holdback obligation within the stated period of time.
5. Emergency Cash Loan
We live in a world full of uncertainties that require urgent attention.
Some of these uncertainties include medical bills. They all hit us at some point, and we need funds for them.
At this point, approaching a bank may take time due to bottleneck bureaucracy, so what you do is approach a licensed lender for faster cash.
It is worth noting, however, that the interest rates and repayment schedule may be different compared to bank rates, so be sure to approach them with a lot of caution.
6. Bridging Loan
A bridging loan is a common short-term loan facility in Singapore that allows you to obtain a loan to cover mortgages on a house.
Let’s say you’re buying a new home for $100,000 but you don’t have enough cash to pay for it.
However, luckily, you happen to be selling another house at $80,000 that has not sold yet. To get a loan from the bank, you use the house you’re selling as collateral for the loan.
Most people in Singapore are finding this loan type convenient but often expensive because of the high interest rates and the repayment period.
7. Online Or Installment Loans
An online loan allows you to access credit from online platforms.
In Singapore, you can access a loan by literally doing all applications, getting approval, and transactions online, giving you the efficiency of accessing funds any time of the day and from anywhere with flexible repayment terms.
All the short-term loans in Singapore that we have looked at above are flexible, accessible, and enticing. However, for each type of loan, there is something that you need to know before making a decision.
That’s why in the next section we’ll look at the pros and cons of short-term loans to enable you to make a good decision about them.
Pros And Cons Of A Short Term Loan
- A short repayment period means you pay less interest.
- Sometimes the credit score is not considered by the lender for them to give you a loan.
- Faster processing rate and reduced bureaucracy.
- It is easy to access financial institutions anywhere in Singapore for short-term loans.
- There is a lot of flexibility in the repayment of these loans.
- Due to the short repayment period, it may be easy to be caught off with servicing the loans if your business fails to perform as expected.
- The interest rate accumulates quite easily if you fail to pay the installments as agreed.
- The mushrooming of digital lenders may lead to an increase in cons and frauds
- Only a limited amount of loans are accessible.
Now that you’ve understood the pros and cons of short-term loans, you’re ready to hit the market to choose a short-term loan for your needs.
But before we take a look at where to get these loans, let’s first take a look at how to select the best short-term loan in Singapore.
How To Choose The Best Short-Term Loans In Singapore
Approach licensed money lenders: Be sure to approach a registered and licensed money lender, as required by the Ministry of Law in Singapore. This is beneficial because of the increased number of fraudsters who might con you with the little resources you’re trying to build. Secondly, they are regulated, so their interest rates are favorable to you as an individual or business.
Loan comparison sites: You can leverage the online sites that can help you do a comparison between different money lenders and give you an idea of the expected interest rates and availability of the loans that you need.
Where To Get A Short Term Loan In Singapore
Now that you have a general idea about short-term loans, you might be wondering where is the best place to apply for one within Singapore and be sure they’ll take care of your needs. Some of them include:
It’s true that banks are trustworthy and safe options for anyone considering a loan in Singapore. All you have to do is approach them with your loan need and provide the requirements before they can process the loan for you.
Popular banks in Singapore that offer loans include HSBC, CitiBank, OCBC Bank, and others.
Licensed Money Lenders
These are the best alternatives to banks in Singapore that have been lending people and other businesses loans – especially those that have failed to secure funds from banks.
Their efficiency and dependability within a short period of notice for loans with repayments occurring within 12 months is what makes them reliable.
Maybe people close to you, such as your family, work colleagues, and friends, might have the muscles to give you a loan.
They’re best because the terms of repayment can be renegotiated anytime you seem to be late on your repayment.
However, the drawback is that if you need short-term loans quite often, these people might not be in a position to do so.
Acquire Short-Term Loans In Singapore
Short-term loans are adaptable resources that can help you settle past-due bills. Don’t worry if you require funds urgently. Be sure to select the right loan type and financial institution for your needs.
In Singapore, a reliable money-lending institution is Credit Thirty3. Our rates are competitive and they offer various types of short-term loans.