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How to Secure a Loan With a Bad Credit in Singapore

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If you have high-interest credit card debt, a personal loan can help pay it off, potentially saving you money in the long run. However, according to consumer finance platform Intuit Credit Karma, the benefits depend on the loan terms and your ability to repay the loan responsibly.

In Singapore, borrowing with bad credit is challenging but possible with careful planning and financial discipline. This post explores what bad credit loans are, the risks involved, and how to borrow safely and responsibly.

Hands open the empty purse after calculating the bill

What Does Bad Credit Score Mean?

In Singapore, credit score ranges from 1,000 to 2,000 points, with 1,000 being the lowest and 2,000 the highest. Credit scores are graded from AA (highest) to HH (lowest). Grades BB and CC indicate late repayments, while grades D and below are caused by defaults.

Category Credit Grade Score Range
Poor HH 1000 – 1723
Average GG 1724 – 1754
Average FF 1755 – 1781
Average EE 1782 – 1812
Good DD 1813 – 1824
Good CC 1825 – 1843
Excellent BB 1844 – 1910
Excellent AA 1911 – 2000

Source: https://thefinance.sg/

In Singapore, banks usually do not adjust interest rates based on credit scores but may offer smaller loan amounts or reject applications with bad credit. A high credit score indicates a greater ability to repay loans on time, making it easier to secure approval from licensed lenders.

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Potential Risks and Realistic Outcomes of Borrowing with Bad Credit

According to financial website ClearScore, “taking out a loan can sometimes feel like an easy fix, especially if you have unexpected expenses. Before applying, ensure it’s the right decision for you. Loans can help build a strong payment history if repaid on time, which can positively impact your credit score.”

Here are some considerations before you borrow cash:

Potential Risks

  1. Higher Interest Rates: Loans for bad credit often come with higher interest rates, increasing overall costs.
  2. Shorter Repayment Terms: Shorter repayment periods can result in higher monthly payments.
  3. Limited Loan Amounts: You may be approved for a smaller loan amount than needed.
  4. Collateral Requirements: Some loans may require collateral, risking valuable assets if you default.
  5. Negative Impact on Credit Score: Missing payments can further damage your credit score.

Realistic Outcomes

  1. Improved Credit Score: Timely payments can gradually improve your credit score.
  2. Access to Funds: Loans can provide necessary funds for urgent expenses.
  3. Building Lender Relationships: Successfully managing a loan can build positive relationships with lenders.
  4. Increased Financial Discipline: Repaying a loan can instill better financial habits.
  5. Better Future Loan Terms: Improved credit can lead to better loan terms over time.

Who is the Best Lender for Bad Credit?

Businessman calculating costs and holding cash notes.

You can borrow money even with terrible credit, though it may be more challenging and come with less favorable terms. Here are some options and for obtaining a loan with bad credit:

Licensed Moneylenders

Licensed moneylenders provide an alternative to traditional banks by offering loans without strict credit score requirements. While they do check credit scores, they also consider your ability to repay using proof of salary and income. Therefore, individuals with poor credit scores are welcome to apply.

They operate under the regulation of Singapore’s Ministry of Law, ensuring legal and ethical lending practices.

Loan features:

  • Loan Amount: Up to 6x monthly salary
  • Interest Rate: 1-4% PM
  • Repayment Period: 6-12 months
  • Cash Availability: Same day cash
  • Credit Score: Not required

Non-Banking Financial Institutions

Non-banking financial institutions (NBFIs) also welcome individuals with bad credit. These institutions include credit unions, microfinance institutions, and peer-to-peer lending platforms. While their interest rates may be higher than traditional banks, they provide more accessible loan options for those with poor credit.

Loan features:

  • Loan Amount: Varies by institution; typically Up to 8X your monthly income
  • Interest Rate: 6.95%-8.8% APR
  • Repayment Period: 3- 72 months
  • Cash Availability: Typically within 1-2 business days
  • Credit Score: Not a primary requirement; flexible evaluation criteria

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How to Secure a Loan With a Bad Credit in Singapore

Here’s a quick guide on the requirements, eligibility, and application process for obtaining a loan with bad credit.

Requirements and Eligibility

Personal Loan General Requirements

  • Age: You must be at least 21 years old.
  • Residency: Singaporean citizen, Permanent Resident, or Foreigners with a valid Employment Pass.
  • Income: A minimum income requirement which varies by lender; typically S$2,000-S$3,000.
  • Employment Status: Stable employment history or a steady source of income.
  • Documents: NRIC, proof of income, proof of residence, bank statements, among others.

How to Apply

  1. Research Lenders: Compare licensed moneylenders and NBFIs. Look at their interest rates, loan terms, and customer reviews.
  2. Prepare Documentation: Gather required documents such as NRIC, proof of income, proof of residence, and bank statements.
  3. Submit Application: Most lenders offer an online application process. Visit the lender’s website and fill out the application form.
  4. Verification and Approval: The lender will verify your documents and financial status. You might receive a call or email for further verification.
  5. Loan Disbursement: Upon signing the contract, you can pick up your cash from the lender. Licensed moneylenders may provide same-day cash availability.

Tips to Improve Credit Score While Taking A Loan

Improving your credit score is a gradual process that requires consistent effort and financial discipline. Here are some strategies to help you enhance your creditworthiness:

Timely Payments

Make all payments on time, as good credit account history is a significant factor in your credit score. Here are some tips:

  • Set Up Reminders: Use calendar alerts, financial apps, or automated payments to ensure you never miss a due date. Timely payments build a positive payment history, which is crucial since it accounts for about 35% of your credit score.
  • Prioritize Bills: Prioritize paying off high-interest outstanding debt first, but never neglect smaller bills as they also impact your credit score.
  • Monitor Due Dates: Keep track of various payment due dates for credit cards, loans, and other bills to maintain a consistent payment record.

Credit Utilization

Keep your credit card balances low relative to your credit limits. The credit utilization ratio is the percentage of your credit limit that you are currently using. For example, if you have a total credit limit of $10,000 and your combined balance across all credit cards is $2,000, your utilization ratio is 20%. Below are some tips to keep it at minimum:

  • Regularly Pay Down Balances: Make frequent payments throughout the month to keep your balances low. Paying more than the minimum due can help reduce your balance faster.
  • Increase Credit Limits: Requesting a higher credit limit from your credit card issuer can lower your utilization ratio, provided you maintain the same balance or lower it.
  • Use Multiple Cards: Spread out your expenses across multiple credit cards to avoid high utilization on any single card.

Reduce Credit Inquiries

Avoid applying for multiple credit accounts in a short period. Each hard inquiry can temporarily lower your credit score. Here are things to keep in mind:

  • Understand Hard vs. Soft Inquiries: Hard inquiries occur when a lender reviews your credit report as part of a loan or credit card application, which can slightly lower your score. Soft inquiries, like checking your own credit, do not affect your score.
  • Plan Credit Applications: Space out your credit applications. If you need to apply for multiple credit accounts, try to do so over a longer period to minimize the impact on your score.
  • Check Pre-Qualification Offers: Before applying for a new credit card or loan, see if you can get pre-qualified. This typically involves a soft inquiry and can give you an idea of your approval chances without affecting your credit score.

Maintain a Diverse Credit Mix

A diverse mix of credit types can positively impact your credit score. Your credit score benefits from a mix of revolving credit (like credit cards) and installment loans (like car loans, mortgages, and personal loans). This mix shows lenders you can manage different types of credit responsibly.

Don’t take on new debt just for the sake of diversifying. Ensure any new credit aligns with your financial goals and ability to repay.

Pay Off Debts

Reducing your overall debt can improve your credit score. Prioritize paying off debts with the highest interest rates first to save on interest costs over time.

Monitor Your Credit Report

Regularly review your credit report to ensure accuracy and address any issues. Mistakes on your credit report, such as incorrect account information or fraudulent activity, can hurt your score. Dispute any inaccuracies with the credit bureau.


Obtaining a loan with poor credit score in Singapore is achievable with the right approach and preparation. By understanding the requirements and following the application process diligently, you can secure the financial assistance you need.

Key Takeaways: 

  • Credit score ranges from 1,000 to 2,000 points, with 1,000 being the lowest and 2,000 the highest. 
  • For those with bad credit scores, licensed moneylenders and NBFIs are viable options. Licensed moneylenders offer loans with 1-4% monthly interest, same-day cash, and no credit score requirement. NBFIs provide loans with 6.95%-8.8% APR, flexible criteria, and quick cash availability.
  • Improve your credit score by making timely payments, keeping credit card balances low, and reducing credit inquiries. Set payment reminders, prioritize high-interest debt, and monitor your credit report for accuracy. 

Always research and compare different lenders to find the most suitable option for your financial situation. 365 Credit Solutions, with over a decade of experience, is among the best licensed money lenders offering personalized loan options. Whether you have bad credit or need quick cash, we’re here to help!

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