What Are Short Term Loans & Where To Get Them In Singapore?

In times of financial uncertainty, we sometimes require an additional influx of cash to tide us through a short but tough period. This is where short term loans come in handy. As opposed to long term loans, short term loans are usually used for short term financial needs and are repaid from a few weeks to a few months.

What Types of Short Term Loans Can You Get in Singapore?

There are several types of short term loans available in Singapore. Consider which one best suits your financial needs.

Payday Loans

Considered to be the most popular type of short term loans, payday loans are typically used to tide borrowers till their next payday. Only legal money lenders offer payday loans. They are easy to qualify for, but have to be repaid in full (including interest and fees) once you receive your next paycheck. Therefore, make sure to borrow only what you can repay.

Lines of Credit

Commonly referred to as “revolving loans”, lines of credit from banks allows you to withdraw as much as you need — as long as it is under your credit limit. It is so called because once you pay off the loan, you can borrow again. This loan usually boasts lower interest rates than other short term money loans like payday loans, and has a higher or same credit limit than credit cards. However, it usually comes with multiple fees like an annual fee and a processing fee.

Merchant Cash Advances

As the name suggests, this short term money loan is meant for small business owners who enjoy a healthy amount of credit card-powered sales. The process works by allowing you to secure a loan based on your business’s future sales and growth. Keep in mind that this particular loan comes with high interest rates, and is best if you are confident of your business’s financial state in the future.

Instalment Loans

What is special about this short term money loan is that it offers a larger loan amount and is usually easier to qualify for. Obtained through licensed lenders, this loan is to be paid back in instalments which range from 3 to 12 months, making them more manageable. However, it does come with a relatively higher interest rate.

Banks also offer personal instalment loans, however their loan tenures are usually much longer than what licensed lenders offer, typically stretching from 1 to 7 years.

Bridging Loans

Used to “bridge” the period between buying one property and selling another, a bridging loan lets you buy a new property before getting the sales proceeds from the sale of your old one.

You can also use it to fund the purchase of commercial equipment or premises. However, they often use your property as collateral, and come with higher interest rates and shorter repayment periods.

What Types of Short Term Loans Do Licensed Short Term Money Lenders Offer?

As mentioned in the above section, licensed short term money lenders offer short term loans like payday loans and personal loans.

Payday loans are extremely short term, and have to be paid up by your next payday. As for personal loans, most licensed lenders offer loan tenures of up to 12 months, although some may offer up to 24 months on a case-by-case basis.

Pros and Cons of Short Term Loans From Licensed Lenders

As with all types of loans, short term loans come with its benefits and drawbacks.

Its benefits include:

1. Fast approval and disbursement. Most lenders can approve and let you have the cash in your hands within 24 hours.
2. Less expensive. In the long run, it accrues lower overall interest due to its short term nature.
3. Flexible. Short term loans usually don’t require collaterals, and have flexible repayment terms that suit your financial situation.
4. Accessible. Almost everyone can get short term loans from licensed lenders as long as they can show proof of stable income.

Its drawbacks include:

1. Assortment of fees. These fees include a one-time processing fee and late payment fees.
2. Higher interest rates. Because short term loans are considered high-risk, lenders tend to charge a higher interest rate. This applies to late interest rates, too.
3. Danger of borrowing from unlicensed money lenders. Make sure you are borrowing from licensed short term money lenders.

Who Is Eligible for Short Term Loans From Money Lenders?

You can borrow from licensed lenders as long as you are:

1. Aged 18-65 years old
2. Employed full-time with a monthly CPF contribution or can provide proof of consistent income
3. Singaporean, PR, or foreigner

Where Can You Find Money Lenders That Offer Short Term Loans?

Most licensed lenders offer short term loans. Be sure to only approach legal short term money lenders. The Ministry of Law provides a list of licensed lenders, so do your research before signing any contract.

How to Apply for Short Term Loans From a Money Lender?

It is easy and fuss-free to get loans these days. Firstly, research for a licensed short term money lender. After choosing a lender you trust, select the right loan package for your needs. Consider the licensed money lender’s interest rates and loan tenure. Lastly, go down to the lender’s office or submit your application online. The loan officer will be in contact as soon as possible for the subsequent steps.

Conclusion: Apply for Your Short Term Loan With Prosper Credit

If you are ever in need of a short term loan with transparent and fair loan terms and conditions, don’t hesitate to reach out to Prosper Credit. Besides short term loans, we offer an array of loan services, from debt consolidation loans to instant loans.

We are a trusted, professional loan company in Singapore that offers competitive rates and a friendly, reliable service. Our online process is also easy and seamless — apply in just a few minutes. Need further assistance? Talk to us now.