There are times in life when you become a victim of a financial crisis. In these difficult times, you need money urgently. For that, you can either consult a bank or financial institution which can provide you urgent loans. And, short term loans are ideal for this purpose.
Most people still prefer short-term loans in Singapore whenever they are in a financial crisis. In this article, let’s discover more about the short-term loans.
What is a Short-term Loan?
A short-term loan is a loan given in the form of credit. It is usually given to a person when he needs money for business adventures or his/her financial issues.
A short-term loan includes borrowing money and returning the borrowed money along with its interest. The period of returning the money in Singapore can be up to one year from loan approval.
This type of loan is perfect for personal financial needs and for starting your own small business.
The Benefits of Short Term Loans in Singapore
The benefits that you can get with a short-term loan are as follows:
- It does not include much interest proportional rate. It will not be false if we say that it has zero interest rate compared to the interest you pay for the long-term loan. So, it has almost no interest.
- Easier to get, and approved instantly as compared to the long-term loan.
- It permits some flexibility in your resources.
Drawbacks of Short-term Loan
If there are advantages, there are also some drawbacks. And, we will discuss some disadvantage of this loan:
- You can only get a small sum of cash as the loan is only for a short period and is required to pay it back at this time.
- You have to pay a small amount of money before loan approval.
- The low-interest rate is only applicable within the date assigned for repaying the loan. After the date, the interest rate will rise and will be a huge burden on the borrower.
The Types of Short-term Loans
Some main types of short-term loans are:
Merchant Cash Advance
As the name says, it is cash given in advance in the form of credit. So the agent giving this money has direct access to the borrower’s credit facility and can get the cashback.
Line of Credit
It has some features as the credit card has. There is a limit set for the credit. You can get it whenever you are in need. It is a more flexible type of loan and has a very appropriate payment period.
It is usually easier to get it but has high-interest rates. If you need money urgently, you can go for this type of loan. The agents can get their money back on the day when you get your pay in your bank account. This loan is needed to pay in one go along with the applied interest.
This type of loan is for business purposes, and a person can get this loan by utilising the invoices that a customer owed them to get from the financial institution.
A bridging loan is a type of short-term loan for buying a property. It bridges or fills the financial gap when buying a new property as you wait for the sale of your old house.
This type of loan is given to the person when they require paying their expenditures like medical bills, utility bills, educational expenses, etc.
As its name indicates, this loan ideal for foreigner financial needs – educational, working, or residential purposes. The difference between the loan given to the citizens and foreigners is the income requirement.
This type of loan is for entrepreneurs who need to fund their business opportunities. It fills their need for extra capital to continue their operation.
Where to get the Short term Loans in Singapore?
Banks can give you many types of loans like personal, business, etc., with short interest rates. As we know that there is a high-interest rate on short-term loans after some time, so taking that loan from the bank will be preferred.
However, there are still some reasons not to prefer this source of loan. First, you have to give the verification of your bank details. You need to prove that you are financially stable enough to repay the loan.
After banks, the most trustworthy option to get these loans is the money lenders. It is easier because you do not have to verify your bank details. Their interest rates are high but not much. They follow the set of rules set by the Ministry of Law. Legal and reliable money lenders can also give you some advice about good short-term loans.
You may also check the list of reliable licensed moneylenders.
This is another loan provider. You need to fulfill the terms and conditions mentioned by some of the private funders. It can be considered as a good option as well.
How to Choose the Best Short term Loans?
You can get these short-term loans from the best lenders. All you need to do is to research before applying for the loan. Check whether the lender in which you are applying for a short-term loan is trustworthy or not. After your satisfaction, compare all the loans and offers of all the shortlisted investors. Compare and then choose the one with the best terms and conditions as well as the interest rate.
Short-term loans can be obtained easily and can be a sigh of relief for you when you are in an extreme financial crisis. Its flexibility is the reason for its popularity.
Whenever you need money, try to find a good lender that can give you these short-term loans in Singapore at a low-interest rate or some cheap short-term loans and try to pay them as soon as possible.
We hope that this article clears your confusion about the short-term loans and you will be able to get them according to your needs.