Best Short Term Loan in Singapore 2022

Best Short Term Loan in Singapore 2022

Businesses and individuals may fall out of capital or money, respectively, to purchase immediate or urgent needs. When this happens, a short term loan like line of credit, payday loan, invoice financing, merchant cash advances, among others, could be a lifesaver.

The debt will most probably get approved than not because in this type of loan, credit standing and other eligibility and document requirements are not needed as much as they are necessary to other kinds of loans in Singapore.

What Is Considered a Short Term Loan?

A short term loan partakes any other traditional loan where borrowers get the amount needed with the obligation of repaying it in the future together with the accrued interest rates. Like conventional loans, short term loans entail payment of processing fee and interest rates. What sets it apart from other term loans (medium and long) is the relatively shorter repayment period.

What Is the Period of Short Term Loan?

Generally, the terms and conditions of the loan contract like the interest rate, loan amount, repayment plan and repayment depend on the stipulation between borrowers and and the lending institutions like banks and lending individuals like licensed moneylenders. The repayment period of short term loans, however, takes 12 months.

How Short Term Loan Can Help You?

Business owners and ordinary individuals can rely on short term loans to finance unprecedented expenses that require immediate funding. They can trust that despite having low credit score and the fact of greater risk on the part of the credit facility because of shorter repayment term, money lenders will be willing to take such higher risk to loan money.

Hence, whenever there is not enough cash flow to fund upfront fees such as increased demand for a product or service, or there’s a sudden business emergency that needs immediate payment, short term loans can help in immediately financing everything you need.

What Is Short Term and Long Term Loans?

Short- and long-term loans differ in terms of the loan tenure. The former usually have a repayment period of a few months or a year or so, while the latter typically takes a few years up to several years (10-15 years) to repay.

The two also differ in terms of loan amount. Short-term loans like cash advance loans, peer-to-peer loans, and line of credit involve small amounts while long-term loans like home purchase loan deal with bigger loan transactions.

Types of Short-Term Loans

1. Invoice Financing

Businesses may get business loan based on the invoices or the value of payments that customers owed them. 

Invoice financing involves the process of invoice factoring where businesses invoice their customers and sell such invoices to a credit facility in order to secure business loans. When the application process is done, the business will be entitled to a loan amount  up to 70% to 90% of the value of the invoice.

The interest rate is lower compared to other short term loans in Singapore. However, most lenders require a borrowing company to have a  minimum revenue requirement of S$100,000 to be entitled to this loan.

2. Payday Loans

If you would like to get a loan as fast as possible, get a payday loan. Credit score is immaterial. Only proof of income usually matters.

Take caution, however, in relying on payday loans because they could be really expensive. If credit card loans take up to 25% annual interest rate, payday loans could charge a very high interest rate of 24% covering only 2 weeks. This means that payday loans could be 25% more expensive than credit card loans.

3. Lines of Credit

Lines of credit are unsecured loans which permit borrowers to draw on funds whenever they need to do so. The credit limit is typically 4 times the borrower’s income.

What sets credit line apart from other personal loans in Singapore is the fact that interest rates are only charged against the amount that has actually been drawn on.

Credit line allows borrowers to borrow  multiple times from the same credit account until the credit limit is exhausted.

4. Merchant Cash Advances

This type of short term loan in Singapore allows a lender to have access to a borrower’s credit facility for purposes of debt collection where part of the latter’s sales will automatically go to the former.

Merchant cash advances work by lending the borrower the amount needed and in turn, the latter repays the loan by letting the former have access to the borrower’s credit facility. Every time there is a purchase made by a customer of the borrower, a certain percentage of the sale is automatically taken by the moneylender as payment of the debt.

Pros and Cons of Short Term Loan


1. Less costly because the interest rate of short-term loan is significantly lesser than the accrued interest rates of long-term loans. Clients have to pay back loan for a shorter period of time in the former. 

On the other hand, long-term loans usually take at least one year to pay back. As long as the minimum amount of the remaining balance each month is paid within the loan tenure, there will be 0 interest promotional rate.

2. There are higher chances of getting one’s short term loan application approved compared to its counterparts. 

It saves businesses and individuals alike because they do not have to worry about credit rating as much as they would have to when they apply for bank loans. Banks will review the borrower’s credit report and a bad credit score would defeat chances of getting any loan.

3. Short term loans make quick cash possible by converting 95% of the available credit limit in one’s credit card into allowable loan amounts.

4. There is flexibility of repayments. There is a range of options for repayments of short term debt. For example, the borrower may prefer a 3 month loan or a 6 month loan and so on.


1. The amount of money that can be borrowed is relatively smaller compared to that of other types of loans.

This is because unlike credit card debt, line of credit, foreigner loan, personal loan, and others, short-term loan, from the name itself, has to be paid in a short time.

2. This type of loan has relatively high interest. Low interest rates of short-term loans are only true so far as payments due are still within the term of the loan. 

Otherwise, the capital amount borrowed shoots up because the interest rate starts to skyrocket.

3. There are additional costs like the processing fee. 

How to Find the Best Short Term Loans


When in need of a cash advance to pay up urgent financial needs like utility bills and credit card debt, or when in need of money to improve cash flow for a business emergency, short term loan may be your best source of funding. 

Ultimately, it would be better to get one from a moneylender than from a bank for many reasons:

  • First, the application process is not only quick but also very convenient. 

Moneylenders utilize their websites well. Aside from the fact that you can access all necessary details like requirements, general terms and conditions, charges like processing fee, among others from their website, you can also now accomplish the application process through them.

  • Second, moneylenders transfer the capital or money borrowed to your deposit account in 24 hours or less. 

Such takes several days or even weeks when borrowed from banks.

You can borrow up to 6 times your monthly salary with an interest rate cap set by the Ministry of Law at 4% per month. Moneylenders give you up to 12 months within which to pay up your short-term loan.

To find the best loan, a good advice would be to get at least 3 quotes from where all necessary and relevant short term loan information would be instantly provided to you. In that way, your remaining task would be to personally assess which one will best suit your personal or business need.


An individual with monthly income of S$2,500, can get a loan amount of S$10,000 from the top 5 banks of Singapore with repayment tenure of 3 years. Each bank differs in terms of interest rate. When the loan is paid within the repayment tenure, the borrower would be able to determine, at the beginning, the total amount payable for the loan.

However, when the borrower defaults, there can be additional charges like late interest rate. When the debt has not been paid within the  repayment period, the total amount payable will be higher than when paid within the loan tenure.

Comparison of Top Banks

  Loan Amount Interest Rate Repayment Tenure
DBS S$10,000 3.88% 3 years
Citi S$10,000 4.55% 3 years
HL Bank S$10,000 3.88% 3 years
POSB S$10,000 3.88% 3 years
UOB S$10,000 3.68% 3 years

Finance companies in Singapore include Hong Leong Finance Limited, Sing investments & Finance Limited, Singapura Finance LTD, among others.

You can borrow as much as 10 times your income from the bank with flat interest rate starting from 4% p.a. Usually, the loan tenure of short-term loan from banks takes up to 5 years.


Short term loans are best when you need to have access to a relatively small amount of money as fast as possible which you will not otherwise get should you apply for another type of loan. 

Short term loans offered by moneylenders may differ in terms of interest rate that is pertinent to the total amount payable in the future. Make sure that you gather as much information as practicable before deciding which moneylender to transact with.

In order for you to assess which among the many types of short term loans that are available in Singapore is  the best one for you, you may need a loan comparison site such as Moneylender Review. 

It collates and provides key and relevant loan information from various moneylenders in Singapore. Both individuals and businesses will greatly benefit from the information that Moneylender Review may instantly provide because all information given is up to date.