You’re in need of money urgently, and decide to take up a short-term loan to get some quick finances. However, when you search for short-term loans in Singapore, you’re overwhelmed by the myriad of choices available. Which one should you pick?
Have you ever found yourself in that situation? There are many financial institutions in Singapore that offer short-term loans, but before you make a decision, you may want to think about these factors to determine the best loan for your specific needs.
Type of Short-term Loan
Firstly, you should consider the purpose of your short-term loan. Is it for personal use, such as to pay for a holiday or a new car? Or do you plan to take a loan for business purposes, such as to start up a new company?
Why do I need to know this?
The information loan companies require from you can be different depending on what you intend to use the money for. For example, you will probably need to submit your collateral deposits if you’re taking a business loan, but not if you’re taking a personal loan.
Your Credit Score
A credit score, or credit rating, can make the difference between whether a company is willing to loan you money or not, as well as the maximum amount you can loan from them. If your credit score is poor, consider working on it prior to approaching companies for a short-term loan, so that you can potentially have more options to choose from.
As every company can have a different interest rate for the same short-term loan duration and amount, do your research beforehand and check the interest rates of all the companies you’re considering. While you want as low an interest rate as possible, keep in mind that you should never decide on a loan just by interest rate alone. Sometimes, the lowest interest rates may not be the best options if other aspects of the deal do not fit what you’re looking for.
The Loan Provider
The credibility of the company or organisation you are borrowing from can play a huge part in influencing your decision. Even if a particular short-term loan sounds like a good deal, be sure to exercise caution if you are unfamiliar with the company, especially if they do not have a very good reputation. It’s best if you thoroughly research any company or organisation you are considering taking a loan from. Generally, it is safer to borrow from well-known and reputable companies compared to unknown or infamous ones. Always make sure that the loan provider is a licensed moneylender.
Short-term Loan Details
Certain companies may have specific regulations if you take a short-term loan from them. For example, there could be hidden charges or down payment required. Some companies only allow you to borrow a certain amount of money, or for a certain length of time. Don’t be afraid to ask for more details and ensure that there are no upfront charges or payments required, as these are often unnecessary and you could be saving money by going to a loan provider that does not charge extra fees.