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Short Term Loans in Singapore: First Time Borrower Guide 2024

short term loan singapore
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Singapore’s economy continues to recover from the COVID-19 pandemic. However, the rising inflation and higher cost of living, including a significant increase in fuel and food prices, make it hard for many Singaporeans to save money and maintain wealth.

As such, it is not surprising for many of us to turn to short-term loans. In fact, credit companies have seen an increase in personal loan applications this year as compared to last year. Additionally, while short-term loans are typically used for purchasing big-ticket items, more and more borrowers are using the funds for everyday essentials.

So where can you apply for a short-term loan in Singapore? Before you start applying for the first loan you come across, it’s best to learn more about your other loan options. Plus, how to get financing when your credit rating is below the standard.

What Is a Short-Term Loan?

A short-term loan is a type of personal loan with a short repayment period, typically within one year. It is an unsecured loan, meaning you don’t have to put up collateral. Plus, it also has a lower loan amount – around S$500 and S$35,000 – compared to long-term loans.

Different legal lenders and financial institutions use different terms for short-term loans, such as payday loans, cash advances, and emergency cash loans. In Singapore, you can borrow as much as your monthly income, and banks can charge an interest rate higher than 4%. Licensed money lenders, on the other hand, can charge up to 4% per month.

When taking out a short-term loan, you must make sure that you are capable of repaying it within the agreed term. Lastly, since it has a short repayment period, it is best used as temporary financial assistance for your personal needs.

Pros and Cons

With quick approvals and immediate cash disbursements, short-term loans in Singapore proves to be helpful in different situations. You can use the payouts for medical emergencies, accidents, unexpected repairs, and more.

Consider these advantages and disadvantages before you start shopping for short-term loans:


  • Fast approvals
  • Relatively low interest rates
  • Bypass collateral investigations synonymous with secured loans
  • Minimal documents required
  • A good option for borrowers with variable wages or expenses

For example, if a licensed money lender has already established your income and credibility, they can release your loan on the same day.


  • You can only borrow a small amount
  • Loans must be paid off in full sooner than other types of loans
  • You will incur high fees, such as late interest and late fees if you fail to repay the loan on time.
  • Not a good option for long-term needs, such as capital for business or purchasing a car
  • This can lead to a debt trap since you may be tempted to borrow more.

Types of Short-Term Loans Available in Singapore

Borrowers can have six types of fast loans in Singapore. A cash loan is similar to those available in other countries with interest rates and local exchange currencies, the only difference between the lump sum you can receive.

Keep in mind that even if the offers are convenient and make it easy to receive emergency financing, interest rates, and penalties can increase your overall repayment amounts. When taking out cash loans, whether for business or personal use, make sure to consider if your debt-to-income ratio is still in the green.

1. Cash Advances for Sellers and Retailers

Banks consider this a merchant cash advance rather than quick-pay financing. However, the loan amount you receive is similar to a moneylender quick loan.

This financial product will allow lenders to access the borrower’s existing credit. In doing so, they have a full understanding of the companies’ financing, expenses, and income. The lender then takes a percentage out of every sale and profit of the lender concerning business activities.

Most banks require businesses to have a good credit rating. Therefore, if they’ve got a poor credit score, the establishment should take out additional financing to restore their credit score first.

2. Credit Line

These financial services function similarly to credit cards. Lenders will set a credit limit for the open line of credit. In doing so, banks can monitor the borrower’s financial activities. Automatically, the line of credit allows borrowers to pay in installments.

Many businesses find credit lines useful because of their lower annual percentage rate (APR) for financing that requires more years of payment. APR is similar to the interest rates of credit cards and other financing products. However, credit lines have lower interest than typical loans which have high repayment amounts.

Businesspeople having meeting in the office

3. Payday Loan

You won’t need a good credit score to secure quick payday financing from licensed moneylenders. However, you’ll need to establish that you can earn enough and have an excellent debt-to-income ratio to repay your dues by the end of the month.

In case you face medical emergencies or sudden unplanned expenses, these quick-payout loans can be your saving grace to avoid penalties on your utilities and other regular monthly expenses. To know more about payday loans, be sure to check out Benefits Of Payday Loans You Should Know About.

4. Installment Loan

Many online retailers partner with Singapore banks to provide online financing when purchasing high-value appliances, gadgets, and other items. If you have an existing credit card with the bank, you can use your card and get an installment plan for the item of your choice.

Some online platforms and service providers make it easy to get quick installment financing. However, make sure they’re not unscrupulous lenders. These unregulated individuals can change their policies at any time and trap you in debt.

5. Invoice Financing

This financing is specifically useful for small businesses. Banks provide a financing amount equal to all the business’s accounts receivables. The lender can intercept these invoices once clients have paid them, take their percentage as part of their agreement with borrowers, and leave the rest to the borrower.

Similar to credit lines, businesses will give banks full access to their accounts receivables and ledgers. In doing so, there is complete trust and transparency between the company and the lender. The lender will have no say or recommendations in the company’s decisions despite having access to its financial accounts.

6. Personal Loan

When it comes to the best long-term loan, you won’t find it with moneylenders. However, if you need money in a pinch for any purpose, you can take quick-pay and approval financing from lenders.

Luckily, most moneylenders provide payday and modest personal financing products. This is enough to get you out of a financial rut with little interest. Once you’ve submitted all documents that establish your capability to pay, you can receive your unsecured financing. Be sure to check out what to consider before taking out a personal loan in Singapore for more information.

Where Can You Get Short-Term Loans in Singapore?

In Singapore, you can borrow short-term loans from these three main lenders and financial institutions:

1. Banks

Banks are the usual go-to when you need financing. They offer a wide variety of financial products, including short-term loans. While they offer low-interest rates for personal loans, between 3% and 6% per annum, their approval process is more stringent.

With strict eligibility criteria, banks will take longer to process your loan application. Plus, if your credit history and credit score are less than stellar, your application will have a higher risk of getting rejected. As such, if you are in need of an urgent lump sum, a bank may not be the best option.

Here are the common features of short-term bank loans. Note that the features may differ depending on the bank.

Maximum Loan Amount

Up to 6x your monthly income (depends on the bank)

Interest Rate

Between 3% and 6% p.a.

Loan Tenure

12 to 60 months

Processing Fee

Up to S$100 (depends on the bank)

Minimum Income Requirement

At least S$20,000 or S$30,000 (depends on the bank)

How to Apply

  • Must be at least 21 to 70 years old
  • Singapore Citizen or Permanent Resident
  • Minimum annual income:
    • Singapore Citizen or Permanent Resident: At least S$20,000 or S$30,000
    • Foreigners: S$45,000
Basic Requirements
  • Copy of NRIC or passport (for foreigners)
  • Proof of residency, such as a utility bill or telephone bill
  • Latest bank statement
  • Latest computerized payslip
  • Latest 12 month-worth of CPF contribution history statement; or
  • Income Tax Notice of Assessment

Again, eligibility criteria and document requirements may vary per bank. It is recommended to visit the bank’s nearest branch or the official website.

Business man shaking hands and reviving money

2. Licensed Moneylenders

If for some reason, a traditional bank short-term loan is not available for you, you can borrow from licensed moneylenders in Singapore. As of February 2023, there are a total of 154 legal money lenders in Singapore. 

Is it safe to borrow from legal moneylenders? Yes, all licensed lenders are regulated by the Ministry of Law and they are obligated to follow the strict rules and regulations stipulated in the Moneylenders Act. This means they can’t impose sky-high personal loan interest rates and fees. Plus, they must properly explain the terms and conditions of the loan to the borrowers.

Before you engage with any lender, make sure that they are on the complete list of licensed moneylenders found on the Ministry of Law’s website.

Licensed moneylenders can provide different types of short-term loans, such as personal loans and payday loans:


Personal Loans

Payday Loans

Maximum Loan Amount

Up to 6x your monthly income if earning at least S$20,000

Up to 1x your monthly income

Interest Rate

1% to 4%

1% to 4%

Loan Tenure

Up to 12 months

Within 1 month or on the next payday

Processing Fee

Up to 10% of the principal loan amount when the loan is granted

Up to 10% of the principal loan amount when the loan is granted

Minimum Monthly Income Requirement

  • At least S$2,000 for Singaporeans and Permanent Residents
  • At least S$3,000 for Foreigners
  • At least S$2,000 for Singaporeans and Permanent Residents
  • At least S$3,000 for Foreigners

How to Apply

  • At least 21 years old
  • Minimum Monthly Salary:
    • Singapore Citizen or Permanent Resident: S$2,000
    • Foreigners: S$3,000
  • Copy of NRIC or passport
  • Proof of residence, such as utility bills or tenancy agreement
  • Proof of employment, such as recent 3 month-worth of payslips
  • Bank statement
  • Singpass to log into CPF, HDB, IRAS website

To apply, visit the legal moneylender’s official website and submit your application online. Once they receive and process your application, a loan officer will contact you and schedule an appointment. A face-to-face verification process is necessary, plus, the loan officer must explain the details of the loan. If you agree with the terms, you will sign a loan contract.

3. Pawnshops

You can also turn to Pawnshops when you need urgent cash. However, short-term loans with pawnbrokers are considered secured loans since it involves collateral.

So how does it work? 

You are required to put in a “pledge” – something valuable, such as a luxury watch, in exchange for the loan. The pawnbroker will assess the authenticity and current condition of the item and will provide you with a price quote. Typically, you can borrow between 60% and 80% of the item’s market value.

The catch? You need to pay off the amount within 6 months or your pledge will be auctioned off.

Maximum Loan Amount

Typically 60% to 80% of the market value of the pledge

Interest Rate

Between 1% and 1.5% per month

Repayment Term

Up to 6 months or your pledge will be auctioned off

Minimum Income Requirement


How to Apply

When borrowing from a Pawnshop, you don’t need to apply. Simply bring a valuable item and present your identity card. Pawnbrokers will not look at your credit score, income level, or any existing loan.


There is no shortage of short-term loans in Singapore. If you need an emergency cash loan, one of your best options is licensed money lenders since they can disburse the payouts within the same day. However, make sure that you are dealing with credible and licensed moneylenders.

Key Takeaways

  • A short-term loan is a type of personal loan with a short repayment period, typically within one year.
  • Banks offer short-term loans in the form of cash lines, balance transfers, overdrafts, or unsecured loans.
  • Licensed moneylenders offer different types of short-term loans, such as payday loans and personal loans.
  • You can also borrow money from Pawnshops, but you’ll need to put a valuable item as a pledge. They also have a much shorter repayment term of 6 months compared to banks and legal lenders.

Find yourself in a pickle? Compare and find the best loan plans from the top licensed moneylenders in Singapore with Loan Advisor. They offer free, unbiased, and up-to-date information so you can make smart financial decisions. Request up to three loan quotes today!

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