Personal loans are usually unsecured loans that can be used for all your personal financial needs from paying off your credit card debts to wedding and travel expenditures. Banks in Singapore offer different types of personal loans at varying interest rates to suit your needs.
Listed below are some frequently asked questions about personal loans in Singapore:
Personal instalment, credit line, and balance transfer are the 3 different types of personal loans available in Singapore.
A personal instalment loan is where the lender and you agree upon a loan amount that you have to repay in fixed monthly instalments over a fixed repayment period.
Banks offer you a line of credit based on your income. You only have to pay for what you borrow.
You can transfer all your outstanding debts from several accounts to a single account for a lower interest rate. In this way, you can save money on paying interests with a balance transfer at 0% interest rate for 3 months to 1 year.
Unlike a car loan or a home loan, you can use the personal loan amount for any personal financial need such as credit card debt payment, medical emergency, wedding or travel expenditure.
Banks offer personal loans to Singapore citizens, permanent residents, and foreigners.
Your loan amount will be up to 4 times your monthly income depending on your credit history.
The interest rate depends on your loan amount and tenure.
Loan repayment methods include GIRO, AXS Stations, SingPost, SAM kiosks, bank transfer, and cash or cheque deposited at bank branch counters.
Personal loans are unsecured loans for which you don’t have to put up your assets as collateral. Based on your credit history and income, the banks will offer you a line of credit without the need for a collateral or guarantor.
Listed below are some frequently asked questions about the personal loan application process:
A personal loan applicant has to be 21 to 65 years old with a steady income to apply for a personal loan. He or she can be a Singapore citizen, permanent resident or a foreigner.
Visit the nearest bank branch, fill in the personal loan application form, and submit it along with the required documents.
Compare the different interest rates offered by various banks in Singapore and choose the one with the lowest interest rate. Determine your reason for applying for a personal loan. Compare the maximum loan amount offered by each bank and choose the one that best suits your needs.
You must have a good credit rating for banks to approve your personal loan. Applicants with a bad credit score will not be given a personal loan. Banks will approve or reject your personal loan application based on factors like your credit rating, credit history, income, and age.
The Credit Bureau of Singapore (CBS) calculates your credit score based on your credit history. Your payment information submitted by financial institutions to the consumer and commercial credit bureaus makes up your credit history.
Banks request the CBS for your credit report in support of your loan application which is known as a hard enquiry. Too many hard enquiries will negatively affect your credit score. If you apply for too many loans at the same time it will be perceived as financial desperation by your lenders.
Listed below are some frequently asked questions about personal loan payment:
Personal loans can be repaid in the form of Equated Monthly Instalments (EMIs).
Most banks accept cheque or cash deposit at one of their bank branch counters, online bank transfer, GIRO, AXS Stations, SingPost or SAM kiosks.
Your monthly loan repayment amount is calculated based on your fixed and effective interest rates.
The Effective Interest Rate of your personal loan is calculated using the actual interest rate and the repayment period which can be compounded monthly, quarterly or annually.
You will be charged a late payment fee for defaulting on your loan EMIs.
Whether you want to repay your personal loan partially or fully before the end of your loan tenure, you have to submit a written request to the bank, one month prior to the repayment due date, notifying the bank officials of your intent. You will be charged an early repayment fee.
Most banks will process your loan within 7 working days.
DBS Bank, Maybank, POSB, UOB, Standard Chartered Bank, Citibank, HSBC Bank, and OCBC Bank are some of the popular banks offering excellent personal loan deals in Singapore.
Expats with a Q, P1 or P2 employment pass can apply for a personal loan in Singapore.