• How is the Personal Loan amount calculated in Singapore?

    Personal Loan BYTES FROM OUR KITCHEN

    Personal loans are usually unsecured loans that can be used for personal expenditures such as wedding, travel, and credit card debt payments. Banks in Singapore offer a variety of personal loans at low interest rates and reasonable tenures.

    Personal loan eligibility criteria

    Lenders, in this case, banks, take into consideration several factors before approving or rejecting a loan application such as:

    • Employment: The loan applicant should have a stable employment with the government or private sector to be eligible for a loan.
    • Income: The applicant should have a steady income to reassure the banks that he or she will repay the loan on time.
    • Age: Applicants aged 21 to 65 years old are eligible to apply for a personal loan in Singapore.
    • Credit rating: The Credit Bureau of Singapore rates an individual’s credit score based on his or her consumer and commercial payment information submitted by various financial institutions. Applicants with a bad credit score will be deemed uncreditworthy and their loan application will be rejected by the lender.

    How to improve your credit score?

    Applicants with a bad credit score or credit history can always take steps to improve their credit rating such as:

    • Pay your credit card bills and loan EMIs in full and on or before the due date.
    • Cancel the credit cards that aren’t in use. Don’t cancel the credit cards that have existing debts. Settle the debt before closing a credit account.
    • Have at the least one credit card to ensure you have a credit history. Or else, the CBS will award you a CX (non-existent credit history) rating which is not favourable for obtaining loans.
    • Declaring bankruptcy can have a negative impact on your credit rating. Obtaining any line of credit can be difficult as your credit report will show bankruptcy charges for 5 years after being discharged from the bankruptcy charges. Your credit rating will be HX during the court investigation period.
    • Don’t apply for too many loans simultaneously as it will be perceived as financial trouble by the lenders.
    • Too many hard enquiries made by the lenders to the CBS to support your loan application will negatively affect your credit score.
    • Check your credit report for errors once a year. If there are any errors, inform the CBS of the same so that they can take corrective measures.

    Things to consider before applying for a personal loan

    As a loan applicant, you should take into consideration several factors before applying for a personal loan:

    • Reason: Assess your reason for taking a personal loan. If your financial need is a personal one such as a holiday, wedding or credit card debt payment, then apply for a personal loan. For financial needs related to a car, education, and home, you can apply for a car loan, education loan, and home loan, respectively.
    • Loan amount: Consider your monthly income before deciding on the loan amount. You should be able to pay the Equated Monthly Installments (EMIs) without defaulting.
    • Interest rate: Compare the interest rates offered by various banks before choosing the one that offers you the lowest interest rate.
    • Loan tenure: Choose a personal loan with a short-term or long-term tenure depending on your repaying capacity. Short-term personal loans will have higher interest rates compared to long-term personal loans.
    • Loan processing time: Most banks take 7 working days to process and issue a personal loan. Therefore, consider the loan issuing time while choosing a personal loan.

    Personal loan amount calculation

    Depending on your credit history, the banks may offer you secured or unsecured loans. Currently, the unsecured loan limit is 24 times your monthly income in Singapore. The loan limit is expected to reduce to 18 times your monthly income by June, 2017. Listed below are some personal loan features offered by various banks in Singapore:

    Banks

    Personal loan eligibility

    Personal loan features

    ANZ MoneyLine Term Loan

    Age: 21 to 65 years old

    Income: A minimum income of S$2,500 per month.

    Loan amount: S$5,000 to S$1,00,000

    Loan tenure: 1 to 5 years

    Interest rate: 5.8% to 7.8% p.a. for existing customers and 6.6% to 7.8% for new customers.

    Loan processing time: 7 working days

    Citibank Ready Credit PayLite

    Age: 21 to 65 years old

    Income: An annual income of S$30,000 for Singaporeans and S$42,000 for foreigners.

    Loan amount: S$1,000 to S$1,50,000

    Loan tenure: 1 to 5 years

    Interest rate: 4.55% to 4.94% p.a.

    Loan processing time: 1 hour

    Citi Debt Consolidation Plan

    Age: 21 to 65 years old

    Income: An annual income between S$30,000 to S$1,20,000.

    Loan amount: S$30,000 to S$10,00,000

    Loan tenure: 3 to 7 years

    Interest rate: 5.67% to 5.95% p.a.

    Loan processing time: 7 working days

    Standard Chartered CashOne

    Age: 21 to 65 years old

    Income: A minimum income of S$1,667 per month.

    Loan amount: S$1,000 to S$2,00,000

    Loan tenure: 1 to 5 years

    Interest rate: 6.88% to 10.8% p.a.

    Loan processing time: 7 working days

    HSBC Personal Loan

    Age: 21 to 65 years old

    Income: A minimum income of S$2,500 per month.

    Loan amount: S$5,000 to S$2,00,000

    Loan tenure: 1 to 7 years

    Interest rate: 4.80% to 9.50% p.a.

    Loan processing time: 7 working days

    CIMB Cashlite

    Age: 21 to 65 years old

    Income: A minimum income of S$2,500 per month.

    Loan amount: S$1,000 to S$99,999

    Loan tenure: 1 to 5 years

    Interest rate: 4.5% p.a.

    Loan processing time: 10 working days

    DBS Personal Loan

    Age: 21 to 65 years old

    Income: A minimum income of S$1,667 per month.

    Loan amount: S$3,000 to S$2,00,000

    Loan tenure: 1 to 5 years

    Interest rate: 6.8% to 8.8% p.a.

    Loan processing time: 7 working days

    OCBC ExtraCash (Fixed Repayment)

    Age: 21 to 65 years old

    Income: A minimum income of S$1,667 per month.

    Loan amount: S$1,000 to S$2,00,000

    Loan tenure: 1 to 5 years

    Interest rate: 6.49% to 13.14% p.a.

    Loan processing time: 7 working days

    UOB CashPlus

    Age: 21 to 65 years old

    Income: A minimum income of S$2,500 per month.

    Loan amount: S$1,000 to S$2,00,000

    Loan tenure: 1 to 7 years

    Interest rate: 17.95% p.a.

    Loan processing time: 7 working days

    Maybank CreditAble

    Age: 21 to 65 years old

    Income: An annual income of S$30,000.

    Loan amount: Up to 4 times your monthly income.

    Loan tenure: Revolving line of credit.

    Interest rate: 9% to 19.8% p.a.

    Loan processing time: 7 working days

    POSB Personal Loan

    Age: 21 to 65 years old

    Income: An annual income of S$30,000.

    Loan amount: Up to 4 times your monthly income.

    Loan tenure: 3 to 5 years

    Interest rate: 5.88% to 12% p.a.

    Loan processing time: 7 working days

    Loan applicants should ask the bank for the total loan repayment amount as the total cost of the loan can be higher than the loan amount. Loan repayment is made in the form of EMIs. EMIs are calculated using interest rates and EIRs (Effective Interest Rate). There is also a processing fee charged for personal loans. The principal amount, EMIs, and processing fees together make the total cost of your personal loan.

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