Bugis Credit Pte Ltd is a licensed moneylender (License No. 25/2024) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.

What is a Short Term Loan and Where to Get One

short term loan singapore

Achieving financial freedom in Singapore requires a long-term commitment, as revealed by Singlife’s Financial Freedom Index. With a score of 60 out of 100, Singaporeans are halfway to feeling financially liberated. 

It takes an estimated 27 years of saving at least SGD 1,733 ($1,296) monthly to accumulate SGD 566,640 ($423,914). Balancing short-term financial needs with long-term goals is crucial. 

Short-term loans can provide immediate relief but must be managed carefully to avoid hindering progress toward financial independence. 

This article delves into the intricacies of short-term loans, their importance in the current economic climate, and the various aspects to consider when seeking such financial assistance.

What is a Short-Term Loan?

A short-term loan is a type of credit that is typically due for repayment within 6 months up to 1 year. It is designed to provide quick financial relief for unexpected expenses or temporary cash flow issues. 

Short-term loans can be categorized into two main types:

  • Secured Short-Term Loans: These loans require collateral, such as property or assets, which the lender can claim if the borrower defaults on the loan. Secured loans generally offer lower interest rates due to the reduced risk to the lender.
  • Unsecured Short-Term Loans: These loans do not require collateral, making them more accessible to borrowers who may not have assets to offer as security. However, the lack of collateral means higher interest rates due to the increased risk for the lender.

Types of Short-Term Loans from Financial Institutions

At a Glance

Type of Loan From Financial InstitutionsLoan AmountInterest RatesRepayment Period
Lines of CreditVaries, up to preset credit limitLower than credit cardsFlexible, as needed
Payday LoansShorter period; usually up to one month’s income1-4%Lump sum on next payday
Monthly/Installment LoansUsually up to 6X monthly salary for moneylenders; 10X for banksBanks: 2.88% p.a. + 1% processing fee5 (EIR 5.79% p.a.)
Moneylenders: 1-4%
Monthly installments
Personal/Foreigner LoansTypically up to 6X monthly salary for licensed money lender; 10X for banksBanks: 2.88% p.a. + 1% processing fee5 (EIR 5.79% p.a.)
Moneylenders: 1-4%
Structured, often long-term
Bridge LoansBased on the value of the property transaction for banks; up to 6X monthly salary for moneylendersBanks: Varies, typically higher due to short-term risk
Moneylenders: 1-4%
Short-term, typically within a year or upon transaction completion

1. Lines of Credit

  • Best for: Individuals or businesses needing ongoing, flexible access to funds without a defined purpose.
  • Advantages: Lower interest rates compared to credit cards and flexible repayment terms.
  • Considerations: It requires discipline to manage the open line of credit without accruing unnecessary debt.

2. Payday Loans

  • Best for: Emergency cash loans where cash is needed immediately.
  • Advantages: Quick access to funds and easy approval.
  • Considerations: High interest rates and the risk of falling into a debt cycle if not managed properly.

3. Monthly or Installment Loans

  • Best for: Individuals who need a larger amount of money with a structured repayment plan.
  • Advantages: Predictable monthly payments and potentially lower rates from banks.
  • Considerations: Requires a longer commitment and could include early repayment penalties.

4. Personal or Foreigner Loans

  • Best for: Expatriates or residents who need unsecured loan for various personal expenses.
  • Advantages: No collateral required with fixed interest rates offering predictability.
  • Considerations: May come with higher interest rates from moneylenders and stricter eligibility from banks.

5. Bridging Loans

  • Best for: Covering short-term liquidity needs during property transactions.
  • Advantages: Enables smooth transition between buying and selling properties.
  • Considerations: Typically higher interest rates and is only useful if you are engaged in real estate transactions.

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Benefits and Risks Associated with Short-Term Loans

Short-term loans offer several benefits, including quick access to funds, flexibility in usage, and some cases, the potential for improving credit scores with timely repayments. 

However, they also come with risks, such as higher interest rates compared to long-term loans and the potential for debt traps if not managed wisely. 

To mitigate these risks, borrowers should plan their repayment strategy carefully and avoid borrowing more than they can afford to repay.


  • Higher Approval Chances: Short-term loans are often easier to qualify for, making them a good option for businesses and individuals with lower credit scores. Lenders may prioritize the applicant’s ability to repay in the near term rather than long-term financial stability.
  • Quick Cash Access: Short-term loans can provide swift access to funds, which is crucial in emergencies or when immediate cash is needed.
  • Flexibility: These loans often allow for flexibility in managing resources, providing borrowers with immediate financial relief without long-term commitments.


  • Limited Borrowing Amounts: Since these loans are designed to be repaid quickly, they typically involve smaller amounts of money. This limitation might not suffice for those needing significant financial resources.
  • Processing Fees: Most short-term loans come with processing fees. Although these fees are generally small, they are an additional cost that can add up, especially if you frequently take out short-term loans.
  • Risk of Debt Cycle: The accessibility and ease of obtaining short-term loans can lead to a cycle of debt for some borrowers, especially those who do not manage their finances well or those who repeatedly rely on such loans to manage regular expenses.

Where to Apply for Short-Term Loans in Singapore

In Singapore, banks and licensed money lenders are available for those seeking short-term loans:

Credit ScoreRequiredNot required
Interest Rates2.88% p.a. + 1% processing fee5 (EIR 5.79% p.a.)1-4%
Approval SpeedSlower, due to stringent eligibility checksFaster, suited for urgent financial needs
Eligibility CriteriaStricter, often requiring good credit history and stable incomeMore lenient, catering to a broader range of borrowers
Disbursement SpeedMay take longer due to thorough evaluationsQuick disbursements, often processed within 1 day
Loan AmountsUp to 10X your monthly salaryUp to 6X your monthly salary
Repayment TermsRanging from minimum 6 month to maximum 5 yearsRanging from minimum 6 month to maximum 1 year
Where to apply the best short term loan

Eligibility Criteria for Short-Term Loans

Eligibility for short-term loans varies depending on the lender, but common criteria include:

  • Minimum Income: Lenders often require borrowers to have a minimum level of income to ensure they can repay the loan.
  • Employment Status: Stable employment is typically a prerequisite, as it indicates a regular source of income.
  • Credit History: Some short-term loans are accessible to those with poor or no credit history. Better credit can secure more favorable terms. 

Note that licensed moneylenders often do not require a credit score but evaluate your repayment ability based on your employment status.

Effective Management of Short-Term Loans

Managing short-term loans effectively is crucial to avoid falling into a cycle of debt. Our top three suggestions include:

  • Creating a Budget: Plan your finances to ensure that you can accommodate the loan repayments without compromising your essential expenses.
  • Prioritizing Loan Repayments: Make loan repayments a priority in your budget to avoid late fees and potential damage to your credit score.
  • Avoiding Multiple Loans: Taking out multiple short-term loans simultaneously can lead to a debt spiral. Borrow only what you need and focus on repaying existing loans before taking on new ones.


1. Which loan is best for the short term?

The best short-term loan depends on your specific needs and circumstances. A payday loan or a cash advance from a credit card might be suitable for quick cash needs and emergencies due to their immediate availability. 

Personal lines of credit or installment loans might be better for slightly longer terms and potentially lower rates. It’s essential to consider the interest rates, fees, and the flexibility of repayment terms.

2. What is the shortest personal loan you can get?

The shortest personal loans are typically payday loans, usually due within two to four weeks, aligning with your next payday. 

Another quick option could be cash advances on credit cards, where you borrow against your credit limit. 

The terms vary widely based on the lender, so it’s important to read the conditions carefully before committing.

3. Can I borrow money short term?

Yes, there are several options for borrowing money on a short-term basis. Options include payday loans, credit card advances, personal lines of credit, and short-term personal loans from banks or lenders. 

Each option has its specific eligibility criteria, interest rates, and repayment terms. Reviewing these details and comparing offers from different lenders is advisable to find the best fit for your situation.

4. Is it a good idea to get a short-term loan?

Getting a short-term loan can be a good idea if you need immediate cash for an emergency and are confident in your ability to repay the loan quickly without defaulting. 

However, short-term loans often come with higher interest rates and fees, making them expensive over time. It’s important to evaluate your financial situation, consider alternative funding sources (like savings, family loans, or adjusting your budget), and fully understand the loan terms before deciding.


Short-term loans can be a valuable resource when used responsibly. They provide quick financial relief in emergencies and can help bridge temporary cash flow gaps. However, it’s essential to understand the terms and conditions, manage the loan effectively, and ensure that it fits within your overall financial plan. 

Key Takeaways

  • Short-term loans offer a practical solution for immediate financial needs, such as emergencies or unexpected expenses. However, they must be used strategically and managed carefully to prevent them from becoming a financial burden.
  • Choosing the right type of short-term loan is essential based on your specific needs and circumstances. Secured loans might offer lower interest rates but require collateral, whereas unsecured loans are more accessible but have higher interest rates.
  • Eligibility criteria, such as minimum income employment status, are crucial factors that lenders consider before approving a short-term loan.

For flexible financial solutions tailored to your needs, explore Bugis Credit’s unsecured short-term personal loans! We offer fast loans up to 6 times your monthly salary with interest rates ranging from 1% to 4%, payable within 6 to 12 months. Apply now!

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