Last Updated on Nov 19, 2021 by James W
If you have a financial shortfall, especially an urgent one, going for a long-term loan might not be a viable option because it takes more time to process. For example, the funds for a car repair might not be able to wait for weeks or months. The best option in such a situation is a short-term loan in Singapore. This post is a comprehensive guide to help you make the big decision about short-term loans.
What is a Short Term Loan?
In Singapore a short term loan is what the name suggests, a credit taken and repaid within a very short period. In most cases, any loan with a repayment period of less than one year is considered a short-term loan. The repayment can be made either via monthly installments or payday, depending on the agreement.
The amount that you can borrow in a short-term loan is generally smaller compared to other loans. In Singapore, this can be anything between S$500 to S$35,000. We must also indicate that the loan is also processed pretty fast. Lenders offering short-term loans are also likely to approve them compared to other types of credit.
However, it is crucial to understand that not all licensed lenders offer short-term loans. Again, you need to avoid falling into the hands of loan sharks when applying for short loans. One way of staying away from these predatory lenders is working with lender comparison sites, such as Lendela.
Reasons to Take a Short-Term Loan in Singapore
Here are some benefits that you should expect when applying for a short-term loan in Singapore.
- Convenience: Most lenders have lenient conditions for short-term loans in Singapore. This makes them very convenient and helpful, especially when cash is needed urgently.
- Unsecured: Unlike secured loans, such as mortgages and car loans, where credit is only approved after committing collateral, short loans are unsecured. If you are unable to repay the loan, no one will come for your assets. However, you should not spare any effort to get the loan repaid according to the signed agreement because defaulting can impact your credit score and financial health.
- Greater flexibility: When considering applications for short-term loans, most lenders have very flexible terms. For example, you will find some asking you whether to repay weekly, bi-weekly, or monthly. This flexibility is not available when dealing with other loans, such as mortgages. So, make sure to select the method that you are most comfortable with so that you can repay the short-term loan in Singapore without fail.
The Main Options for Short-Term Loans in Singapore
There are a number of loan categories that you can select when taking a short-term loan in Singapore, and it is important to understand all of them. So, here are the top options:
- Emergency cash loans: This type of short loan is recommended for people seeking cash to address emergencies. To increase your chances of approval, consider applying from online moneylenders.
- Payday loans: If your credit score is poor, payday loans will be an excellent option. As the name suggests, you borrow the money and repay the next payday. Although payday loans have high interest rates, their main advantage is that you do not carry the baggage of repayment for years.
- Line of credit: This is a flexible type of loan from a lender and has a predefined amount of funds that you can access and repay over an agreed period of time. Interest is charged only when you withdraw money from the fund. So, if the approved money is S$400, and you have withdrawn S$ 100, the interest is charged on the amount withdrawn instead of the total amount accessible to you.
Short-term loans can be an excellent source of funds when you need to fill an urgent financial shortfall. To increase your chances of getting the loan application approved, make sure to work with Lendela. To use their website, you only need to visit their site to apply for a short-term loan. Then, you will receive pre-approved offers to consider and sign the loan with the best terms and conditions.