365 Credit Solutions Pte Ltd is a licensed moneylender (License No. 17/2024) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.​

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Unsecured Loans: Everything Successful Borrowers Know

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Wise Singaporeans do their best to avoid debt. However, the increasing cost of Singapore living makes loans and other financial products crucial because you’d probably buy a house or car only upon your retirement.

Thankfully, dozens of Singapore lenders offer excellent entries to useful financial products for all your needs. Still, taking care when investing and researching the best loans for your needs will help you entirely avoid deep debt.

Sometimes, using unsecured loans is beneficial if you use them correctly. You’ll know all about unsecured loans in this short guide and how it measures up against the other financial products in this list.

Unsecured vs Secured Loans

Secured loans require collateral and credit investigations. On the other hand, unsecured loans don’t have any heavy requirements, but they can have daily-compounded interest rates.

Banks avoid risky transactions, which means they don’t usually transact with suspiciously poor credit borrowers. Those with high credit can apply for unsecured loans. These are instantly accessible financial products with zero collateral requirements.

However, the banks can charge interest on a daily, monthly, or yearly basis. Most of the time, unsecured loans have a much higher interest rate than secure loans.

Unsecured Loans


  • Zero Collateral
    • You won’t need to supply your lender with any form of collateral. Once you establish your eligibility by submitting all essential requirements.
  • Convenient and Accessible
    • If you have excellent credit scores, you can use an unsecured loan and use it for any purpose.
  • You Won’t Lose Properties When You Fail To Pay
    • Anyone challenged to pay their loans won’t have problems losing property of any kind because unsecured loans have no collateral requirements.


  • Daily Charges
    • Some unsecured loans charge interest rates on a daily, monthly, or yearly basis.
  • Potentially Unmanageable
    • If you’re careless in managing your unsecured loans, it can incur high interest rates that can put you in progressively deep debt.
  • High Credit Only

Anyone with poor credit scores cannot qualify for unsecured loans. However, you can be limited to secure loans with low limits.

Secured Loans


  • Lower Debt Hassles
    • If you failed to pay back your financing for any reason, the bank could absorb your collateral. If the equity is enough, it can pay off your entire debt.
  • Easier Approval
    • If you have subpar credit scores, collateral and guarantors can make it easy for banks to approve your application because you have lower risks.
  • Higher Loan Amounts
    • With collateral, high credit score, borrowers can successfully get better loan amounts than unsecured loans, especially if they’re not pressed for time.


  • Your Collateral is Gone
    • Once lenders file for bankruptcy on your behalf, any collateral you’ve tied to your loan the bank automatically possesses.
  • Longer Approval Periods
    • Credit investigators will examine your current possessions and have to verify your collateral’s overall value.
  • You Need Good Credit Scores
    • Often, collateral can’t help save your loan application if you don’t have excellent credit scores.

Who Can Provide Unsecured Loans?

Banks and financial institutions are the primary unsecured loan providers in the market. If you have good credit, they can provide you top-tier unsecured loan offers.

In addition, most banks and financial institutions disburse your loan within the same day if you have a registered amount.

Singapore’s licensed moneylenders provide unsecured personal and payday loans. They’ll release your loans on the same day you submit your requirements and verify your eligibility.

5 Unsecured Loan Types Available in the Market

If you’re willing to take risks with an unsecured loan, Singapore’s financial institutions offer you the best loan types currently available in the market. Here are five of them for your review.

1. Personal Loan

Banks provide personal loans for their existing and new clients. However, new clients must register an account with their chosen bank first, making it convenient to apply for a loan with a bank you’re already using.

However, doing so means forfeiting lower interest rates you might find from the bank’s competitors. On the other hand, take note of the bank account opening and initial fees you might incur.

You can bypass opening an account by using licensed moneylender personal loans instead. Moneylenders won’t require you to open an account. Instead, they’ll only ask you to sign a contract to cement your rights and responsibilities.

Both bank and licensed moneylender personal loans are only term financing.

Loan Features

  • Loan Amount: Up to six times your monthly salary
  • Interest Rate: Up to 4% and dependent on evaluation.
  • Repayment Period: 12 months

2. Line of Credit

Banks will often provide a line of credit in the form of a credit card. In addition, most financial institutions and union funds provide high-credit and dependable borrowers a line of credit, which functions like a credit card.

You can consider a line of credit as a revolving loan because banks give you a fixed limit to the total amount you can borrow in a single period. Then, you can pay the total within the month to avoid paying interest within the next few months.

Bank line of credit interest rates can go beyond the 4% maximum for licensed moneylenders. However, banks can provide you with various perks, such as discounts and promos from partner merchants. On the other hand, a licensed moneylender line of credit is relatively manageable.

Loan Features

  • Loan Amount: Up to a month of salary
  • Interest Rate: From 4% and dependent on bank evaluation.
  • Repayment Period: End of month

3. Installment Loan

Bridging and business loans are installment loan examples. Both banks and licensed moneylenders offer installment loans of various types to borrowers. In addition, banks will often partner with merchants to provide high-quality installment loans.

For example, car manufacturers partner with bank promotions to provide low down payment options with optimal refinancing installment payments.

Licensed moneylenders might not offer promotions, but their accessibility, interest rates, loan amount, and processing fees can be much more attractive to borrowers.

Loan Features

  • Loan Amount: Indicated item amount
  • Interest Rate: From 4% and dependent on bank evaluation. 1-4% for moneylender’s bridging loan and 5-15% for moneylender’s business loans
  • Repayment Period: 6 months or until indicated completion/maturity date.

4. Balance Transfers

Personal loans can act as zero-interest balance transfers, which are greatly useful financial products for credit cardholders. Credit cards typically have high interest rates, making long-term installment payments costly. With balance transfers, you pay for a higher processing fee while enjoying zero interest rates on a fixed period.

Most balance transfers can pay off only a portion of your debt. If you have bigger debts from loans, you might find it beneficial to work with debt management companies or consolidators.

Loan Features

  • Loan Amount: A part of or entire debt amount or within indicated product limit.
  • Interest Rate: 0%
  • Repayment Period: 6-12 months

5. Debt Consolidation

Charity institutions and trade unions in Singapore are the ones that offer debt consolidation services. These act as a partial or full debt repayment service, allowing the charity or union to represent you to negotiate your debt.

Usually, consolidators will fully pay a borrower’s debt, then provide them with a low-interest loan, processing fees, and a longer repayment period suitable to their current income.

You Can Use Unsecured Loans Even With No High Credit Scores!

Unsecured loans seem like a huge disadvantage for anyone to use because it has high interest rates compared to secured loans. However, unsecured loans are beneficial if you’re pressed for time to find substantial financial amounts.

Still, you must consider the pros and cons of both unsecured and secured loans to avoid falling into deep debt and maximizing the convenience of using Singapore’s financial products.

Singapore’s licensed moneylenders offer the best unsecured loan alternatives from banks. You can trust 365 Credit Solutions for all your unsecured loan needs. Just visit our website, fill out the application form, and you can get your loan released on the same day.

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