Where To Get A Short Term Loan In Singapore
Unforeseen financial needs can be overwhelming and leave you with little time to react. Luckily, you can get short-term loans from lenders and sort out your emergencies quickly.
So what is a short-term loan, and where can you get one? Read on to find out where to get a short term loan in Singapore.
What Is A Short-Term Loan?
Are you wondering what a short term loan is?
It is a loan that you take out for a relatively short period to cover unbudgeted expenditures and emergencies. Whether you want a personal or business loan, such loans can come in handy.
When taking out such a loan in Singapore, you should know that the interest rates, terms of service, and loan tenures vary across different moneylending institutions.
In addition, your eligibility for a short-term loan depends on your creditworthiness, debt-to-income (DTI) ratio, and the lending institution. For example, you can qualify for a higher loan amount with a good credit score and lower DTI.
The loan tenure varies depending on the loan amount that you need. However, the tenure usually is a few weeks after loan approval.
However, it can extend to 12 months or more. The loan repayment plan can be bi-weekly or monthly.
You can apply for a short term loan if you meet a lender’s criteria. A short-term loan is usually unsecured and doesn’t require collateral or a co-signer for approval. If you’re wondering where to get a short term loan, you can get one from banks or licensed money lenders.
Note that licensed money lenders in Singapore must provide a loan agreement that you should read through carefully and consent to before the funds are disbursed to you.
Pros And Cons Of Short Term Loans
You may have second thoughts about getting a short-term personal loan if it is your first time borrowing.
Indeed, there are pros and cons to getting short-term loans. Let’s look at some of these reasons now.
Short term loans tend to be a good financial solution because of the following reasons:
Ease Of Access And Convenience
Most licensed money lenders offer short term loans and make applying for one a hassle-free process as this can often be done online.
Legal money lenders are often more lenient when assessing your eligibility, making it easy for you to access funds during emergencies.
Besides, the straightforward loan application with minimal paperwork simplifies the entire process.
Quick Loan Approval
One of the easiest credit services you can qualify for is a short-term loan as its requirements are often less strict.
Money lenders offering personal loans in Singapore mainly require proof of identity and income when approving your loan request.
Such loans are usually approved fairly fast, provided you meet the basic criteria. This makes it easier to get fast loans and use the money for your emergency.
No Hard Credit Checks
A low credit score may reduce your chances of qualifying for loans from institutions like banks. However, a money lender does not consider your credit when approving these loans, only your income.
Transparent And Flexible Terms
As mentioned, a licensed money lender will always provide a loan agreement before disbursing loans. This contract must include details of the interest rate, repayment schedule, and loan tenure.
A money lender will consider your repayment ability, income, and loan amount before drafting the terms of the loan.
The fact that a short-term loan is approved fast and readily available makes it an attractive option. However, it has the following potential drawbacks.
High Interest Rate
The interest rate of a short-term loan can be high because of its short tenure. If you have a low credit score, it affects your eligibility and is likely to attract a higher interest rate.
Before applying for a short-term loan, ask yourself: Can I repay the loan, or should I seek other alternatives?
Hidden Fees And Penalties
Before taking a short term loan, remember that most licensed money lenders charge an upfront processing fee.
There also are hidden charges that you may need to pay, such as early repayment and late payment fees.
Suppose you want to get a loan to fund a startup or cover a costly expense. In that case, knowing that you only qualify for a small loan amount can be disappointing.
Knowing that you can get credit at any time could lead to unhealthy borrowing habits.
Remember that short term loans come with strict repayment terms – this means you may be forced to borrow more to pay off existing loans if you’re not careful.
It can be challenging to get out of the debt cycle if you keep borrowing to repay a loan.
Room For Predators
In your hurry to secure funds, you may fail to differentiate a genuine money lender from a loan shark. But it pays to know what to look out for.
Before getting a loan from a money lender, check its credibility and ensure it is licensed to avoid being a victim of unlicensed dealers that impose high fees. Always check the Ministry of Law’s list of licensed money lenders in Singapore.
Types Of Short Term Loans In Singapore
Before you find out where to get a short term loan, it is vital to analyse the available options. So what types of short term loans can you get? Here are some options:
This is an example of credit that you can easily get even with a poor credit score.
The loan is also useful when you are facing emergencies that need urgent cash. For example, you may need to repair your car or purchase necessary equipment.
However, these kinds of loans attract high interest. A payday loan is a type of unsecured loan that is due once you get your next paycheck. You must repay it at once – in fact, you should do so on your pay day.
Emergency Cash Loan
Emergencies do crop up and it can be frustrating when you don’t have money. An emergency cash loan can be a viable option when handling medical emergencies that are excluded from your insurance policy.
You can take an emergency cash loan if you’re in urgent need of money. Most money lenders process such loans in 24 hours.
Line Of Credit
A line of credit works like a business credit card sale, where you agree on a credit limit. You get an overdraft from a lender, which allows you to apply and withdraw funds when needed.
The good thing about a line of credit is that you pay low interest fees on the amount you withdraw.
For example, if the credit limit is $40,000 and you withdraw $20,000, the interest rate only applies to the amount withdrawn.
Besides, you can take as much as you need, provided you don’t exceed the limit. These loans also have a flexible repayment period.
You can use a line of credit to build your credit history by making timely payments.
Installment Or Online Loans
An installment loan is a form of credit you can apply for remotely – you can get funds anytime and anywhere, and use the loan for anything.
Since a short-term loan like an installment loan is readily available, you may want to consider it if you are not eligible for a loan from a bank. This type of short-term loan has flexible repayment terms such as weekly or monthly payments.
A bridging loan is the best short term loan if you are in the process of purchasing a new home.
Even if your old house has yet to be sold, the loan can help cover the mortgage costs for both properties.
Your current home can be used as collateral when securing a bridging loan, especially if you foresee that the sale will take longer than 12 months to conclude.
These loans have high interest rates but may be the only option if you cannot risk losing your new home. The loan is repaid once your old property is sold, which could be in 12 months or more.
A personal loan is a type of credit in Singapore meant for specific purposes such as paying for education, utility bills, medical bills, or household purchases.
A short-term personal loan has different loan terms, depending on the lender. For example, you must agree to pay a fixed amount over a specific period, for example, monthly payments.
You can opt for a lender in Singapore – the best personal loan will have a favourable interest rate. Ensure you can pay back the loan without struggling.
Where To Get A Short Term Loan In Singapore
Are you wondering where to get a short-term loan? Your options include:
You can borrow money from different banks in Singapore at lower interest rates. While bank loans seem ideal, the eligibility requirements and approval process can be tedious.
For example, requirements like a good credit score, a history with the bank, income level, and loan purpose could be why your loan request is approved or rejected.
Citibank, HSBC, and OCBC Bank are some of the banks you can try when looking for these loans. Note that the best bank to borrow from is one with your banking history for easy approval.
Licensed Money Lenders
The Ministry of Law regulates licensed money lenders in Singapore, allowing them to lend money to consumers as long as various conditions are met.
Such money lenders provide terms, fees, loan amounts, and other regulations to ensure they operate within the law.
Unlike banks, the interest rates are higher when borrowing from licensed money lenders as they risk undertaken is higher. However, the ease of accessibility and approval make such lenders ideal.
A perfect example of a licensed money lender in Singapore is BST Credit.
Independent Financial Institutions
The government of Singapore allows private funders to provide loans for short-term needs under different criteria.
For example, your net income must be at least $300,000 to qualify for loans from private financial institutions. The lender may also check your net personal assets when determining your eligibility.
Credit unions, loan associations, and insurance companies are examples of independent financial institutions that can give you short-term loans. However, you must be a member of the preferred private institution to qualify for funds.
Find Out Where To Get A Short Term Loan Now
When it comes to where to get a short term loan, looking for a trustworthy lender with quick loans for short-term needs can be time-consuming.
BST Credit is a reputable licensed money lender in Singapore with tailor-made financial services.