Cash woes? A personal loan to the rescue!

    Best Personal Loans for 2017

    Personal loans are the most common types of loans in Singapore. These loans are basically unsecured loans that attract a higher rate of interest (compared to car loans and home loans) and are more easily available to Singaporean citizens. There is a cap on the amount of money that can be borrowed – the cap depends on the bank’s policy and income levels. Credit scores and existing debts also play a role in determining the amount you are eligible to borrow.

    As a Singaporean, you will always want to get the best deal on your loan, don’t you? There are several banks and recognised financial institutions that offer personal loans to citizens in Singapore. The personal loan market is competitive, no doubt, but the onus is on the person applying for the loan to find the best deal. Let us look at some characteristics of personal loans, documents that need to be submitted, factors that impact loan applications, and most importantly, the best personal loan needs in Singapore for 2017.

    Getting your personal loan application approved

    If you are planning on applying for a personal loan and wondering what factors will influence the approval or rejection of your loan application, well, here’s what:

    Your credit score

    Credit scores are the most fundamental factors that impact not just loan applications, but also credit card applications. A good credit report basically gives the bank or financial institution the idea that you’ve managed your credit prudently and effectively in the past. A good credit score can be built by making timely loan or credit card payments over a certain period of time. A bad credit score will most likely result in your loan application being rejected. Many top banks outrightly reject personal loan applications if a customer’s credit score isn’t in line with bank’s internal credit standards. Even in cases where the income is fairly high and the amount requested is fairly low, the possibility of the loan application being rejected is still high if the credit score isn’t good enough. So if you have a credit card and haven’t been making your payments in a time-bound manner, your credit score might have taken a good hit, reducing your chances of getting your personal loan application approved by the bank/financial institution.

    Having an existing relationship with the bank you wish to apply your loan from

    If you already have an existing relationship with the bank – say you already have a credit card with the bank you wish to apply your personal loan from, this will work well in your favour. Even if your credit score isn’t all that good, an existing relationship with the bank will most likely see your loan application approved.

    The income impact on your loan application

    Your income will ultimately determine the amount of money you are eligible to borrow. Sometimes, high income levels against a low requested loan amount will most likely be approved even in light of a bad credit score. Also, banks have their own income eligibility criteria. You can only be able to apply for a loan if your income falls under the bank’s eligibility classifications.

    Having observed these aspects, let us go ahead and look at the best personal loans deals for 2017 in Singapore.

    Name of the bank’s personal loan product

    Effective rate of interest

    Minimum income to be eligible to apply for the loan

    Citi Ready Credit Paylite



    POSB Personal Loan



    HSBC Personal Loan



    Standard Chartered CashOne



    UOB Personal Loan



    OCBC ExtraCash Loan



    As you can see from the table above, different banks offer different rates of interest on their personal loans. Also, different banks have different income eligibility criteria. There are personal loans for mid-income individuals as well as relatively lower income individuals. The rate of interest, however, becomes higher in the case of loans that have a less rigid income requirement. This is because that particular income slab is the most competitive in the market and are a major source of revenue for banks and financial institutions.

    Making repayments towards personal loans

    Banks offer personal loans at fixed interest rates – there are no floating interest rates as far as personal loans are concerned. Floating interest rates are only offered for home loans and car loans. Coming to think of it, fixed interest rates are actually better – they give you an accurate idea of how much you’ll have to be paying throughout your loan tenure. Fixed interest rates are not subject to market fluctuations and remain constant throughout the period of the loan. Moreover, with a fixed interest rate, you can plan other facets of your finances, make timely loan repayments, and boost your credit score.

    Are you eligible for that personal loan?

    As mentioned earlier, different banks have different eligibility parameters that need to be met in order for the loan application to be approved. Factors that impact eligibility are income, credit score, number of years of experience with the current employer, and total years of work experience in Singapore.

    Documents that need to be submitted

    • Copy of NRIC
    • Latest computerized payslips
    • Bank statements for the last 3-months
    • Proof of employment (Appointment letter from your employer)
    • Proof of employment with previous organizations
    • Income Tax Notice of Assessment
    • CPF contribution history for the last 2-years.

    Note that the bank will only approve your loan application if all eligibility parameters have been met. If you wish to apply for a personal loan in Singapore, you can simply visit the website of the bank or financial institution you wish to apply your personal loan from and place an online loan request by filling out the application form. If you have an existing relationship with a particular bank and wish to apply for a personal loan with the same bank, you can visit your nearest branch and manually fill out your loan application. After filling out and submitting your application you will be required to provide your necessary documents, following which the bank will process your application.

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