A personal loan can be used for any of your personal needs. From emergency bills to home renovation, to taking a vacation, you can use it as you see fit.
Most personal loans are unsecured loans or do not require collateral and the amount of loan you can borrow depends on your creditworthiness.
Generally speaking, you can loan up to 10 times your salary when getting a loan from a bank. The borrowed money can be paid over a set term, usually one to five years. For money lenders, you can loan up to six months’ worth of your income and must be paid within six months.
Aside from the loan amount, you must also consider the interest rates and repayment period or tenure. Licensed moneylenders in Singapore charge up to 4% interest rates monthly, while banks charge from nearly 4% per annum. That’s because personal loan amount depends on several factors: who you are, how much you want to borrow, and the repayment period
Types of Personal Loans: Secured vs Unsecured
An unsecured loan is a type of personal loan that does not require the pledging of collaterals. If you would like to borrow a higher amount of money, you may opt for secured loans to pledge one of your assets as collateral for the personal loan.
Secured loans typically offer lower interest rates than unsecured loans. This is because the lender won’t have to take on financial risk.
Take note that when you choose secured loans and you fail to pay the loan, the lender may seize your pledged property.
How to Apply
In most cases, you are eligible to apply for personal loans in Singapore, if you are:
- At least 18 years old (moneylenders); at least 21 years old (banks)
- For permanent residents, you should have an annual income of at least S$18,000 (moneylenders); S$20,000 (banks)
- For foreigners, you should have a minimum annual income of at least S$24,000 (moneylenders); S$40,000 (banks)
If you are qualified to apply for personal loans Singapore, your next step is to complete all the requirements. It will make your loan application a lot easier and faster if you have all the documents you need, such as:
For Permanent Residents:
- NRIC or Identity Card
- Proof of your residence, if possible a recent bill or letter with your address, or your Tenancy Agreement
- Employment letter and three months of your recent payslip
- You should also know your SingPass
- Work Permit, S-Pass, or an Employment Pass
- Your Passport
- A proof of your employment, such as Staff or Company Pass or, three months recent payslips and employment letter
- Up-to-date bank statement from the account where your salary is credited
- Download IRAS NOA using your SingPass
Things to Consider
Regardless of why you need cash right away, a personal loan is a quick and convenient solution to your money problem. Whether for an emergency medical bill, home renovations, a wedding, etc., there are numerous licensed moneylenders and banks. So, how do you know which one has the best offer? Here are four points you have to consider before taking out your loan.
1. Interest Rate
As discussed earlier, banks and moneylenders have different interest rates.
The maximum interest rate moneylenders can charge is 4% per month. This cap applies regardless of the borrower’s income and whether the loan is an unsecured or secured one.
Banks’ interest rate, on the other hand, is from nearly 4% or more. The interest you pay varies upon factors such as your credit score.
When comparing interest rates for personal loans in Singapore, you may have come across these two types of interest rate, namely:
- Annual Interest Rate
As the term suggests, your loan is the total interest you pay per year. So, if your loan charges 4% p.a., you have to pay back the total amount you borrowed plus 4% within that year. If your term lasts for two years, you would now have to pay double the amount of interest.
- Effective Interest Rate
EIR is much higher than your annual interest rate because it takes into account other fees, including an administrative fee, processing fee, number of installments, etc. It gives you the total amount you’ll be paying, which is the principal amount plus interest and other charges.
2. Additional Fees And Charges
Banks’ fees are usually between 1% to 3% (and typically up to $200) and as high as 10% for licensed money lenders.
3. Payment Flexibility
An excellent advantage of a personal loan in Singapore is its flexible repayment option. You can decide how much you are going to borrow and how long you plan to repay it. These options allow you to take out the best loans that you can afford and pay when you can.
4. Ease Of Application
Reputable licensed moneylenders and banks provide reasonably quick loan approval processes. If you have an excellent credit history and have met all their requirements, your loans should be approved immediately. So, if you want your loan application to get done fast and smoothly, come prepared. You have to be sure that you organize all your essential documents and papers that you might need.
Maximum Personal Loan Amount In Singapore
When taking unsecured loans, such as personal loans in Singapore, you can borrow an amount based on your monthly salary. Knowing how much you can borrow will help you determine where to apply for the best loan in Singapore. Not all banks and licensed money lenders will offer you the same amount.
The following should give you more detailed information about personal loans in Singapore from different banks and moneylenders:
1. Citibank Quick Cash
Citibank offers a maximum personal loan amount equal to four times your monthly salary to their clients. For a minimum of S$20,000 personal loan, you get a 3.99% interest rate and 7.5% annual EIR, for three years. The Citibank Quick Cash loan tenure ranges from 1 to 5 years.
They offer it to their Singaporean customers with a minimum annual income of S $ 30,000 and to foreigners with S $ 42,000 yearly salary. There are no processing fees, and you can get your cash loan within 1 to 5 days upon approval.
Citibank Credit Card and Ready Credit holders can apply for personal loans using their Citibank mobile app or their website.
2. DBS Personal Loan
You can get your monthly salary four times or up to ten times if your annual income is S $ 120,000. DBS Personal Loans come with a 3.88% fixed interest rate per year and only a 1% processing fees. They have an annual EIR from a minimum of 7.56%. Choose monthly installments in a minimum of one year or up to five years.
All Singaporean or permanent residents ages 21 to 65 with S $ 30,000 and above annual income are eligible. If you are an existing customer, there are no documents required. What you’ll need to do is log in to your online banking account and submit your application.
3. OCBC Personal Loan
Do you have an existing OCBC Bank account? OCBC offers a personal loan of up to three times your monthly salary. If your annual income iS $ S $ 120,000 and above, you can borrow up to six times your monthly income. What’s more, they have a fixed monthly rate of 10.08% per year and a one-time processing fee of 1%.
You can choose to repay your loan for up to 5 years. Also, their yearly EIR can get as low as 10.96%. You are eligible to apply for this loan if you are 21 years old and above. Applicants should also be a Singapore permanent resident, with a minimum of S$20,000 annual income. Or, a foreigner that has a yearly income of S$45,000.
4. Standard Chartered Personal Loan
With Standard Chartered, you can borrow up to four times your monthly salary or a maximum of S$250,000. That is if you have an annual income of S$30,000 and above. They can offer you a low interest rate of 3.48% per year and EIR starting at 6.95% per year.
Just be reminded that they charge you with an S $ 199 annual fee inclusive in the EIR. However, it is only applicable for the first year of your loan’s term. They deduct this yearly fee from the amount of the approved personal credit. For the second year of your loan term, they only charge you with S$50 for failure to send payments on time.
For this loan, you must be between the age of 21 to 65 years old. You’ll also need a yearly income of S$20,000 minimum for Singapore citizens and S$60,000 for foreigners. All current customers need no documents to submit.
5. Maybank Personal Loan
Maybank has four types of personal loans to offer. It includes Debt Consolidation, Personal Line of Credit, Education Loans, and Renovation Loans. Depending on what type of personal loan you choose, you can borrow as much as four times or up to 8 times your monthly income. That amount should fall between S$30,000 and S$200,000.
Also, they offer low interest rates starting at 2.88% per annum. Moreover, their loan tenure can go as long as 10 years.
6. 365 Credit Solutions Personal Loan
The 365 Credit Solutions personal loans let you decide on the amount you want to borrow. You can get their application process done in under one hour. It is fast, easy, and they have very low interest rates, too up to 4% only monthly.
They are also very transparent. A detailed repayment plan is presented to you straight away. In this method, you can be sure that there would be no hidden charges. It is also convenient because you have multiple payment options via cash, GIRO, or bank transfer. You would only need a minimum annual salary of S $ 1,500 for permanent residents and S $ 2,000 for foreigners.
The processing fee permitted by the Ministry of Law is up to a maximum of 10%. For further information about money lenders rule on taking out a loan, please refer to the MinLaw FAQ.
How much you can borrow from financial institutions may differ. Aside from the loan amount, you must also consider the low interest rate, processing fees, tenure, and It’s reviews and established reputation.
It may sound like a daunting task, but a loan comparison site and loan calculator may help you weigh in your best options. You may check Loan Advisor or Instant Loan to help you sift through the best personal loan in Singapore for you.
Among the top licensed money lender in Singapore, 365 Credit Solutions offers one of the best personal loan in Singapore. It offers efficient and fast processing of applications, low interest rate, flexible payment terms, and excellent 5-star reviews.
Lastly, make sure to only borrow what you can afford. Late repayments may get you in financial trouble. Feel free to talk to the loan staff about your goals and budget to keep yourself safe from financial worries.