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    We found 9 Personal Loans
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    From 3.8% p.a. EIR from 7% p.a.
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    BankBazaar Exclusive Deal
    From 4.55% p.a. EIR from 8.5% p.a.
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    From 8.18% p.a. EIR from 18.47% p.a.
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    From 6.88% p.a. EIR from 12.75%p.a.
    1-5 Years
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    From 6.99% p.a. EIR from 13.14% p.a.
    1-5 Years
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    From 6.99% p.a. EIR from 13.14% p.a.
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    From 4.38% p.a. EIR from 8.2% p.a.
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    From 6.38% p.a. EIR from 14.58% p.a.
    1-3 years
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    From 4.5% p.a. EIR from 8.21% p.a.
    1-5 Years
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    Personal Loans

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      TIP OF THE DAY

      Borrow what you can afford: You might feel tempted to take a personal loan to pay for luxurious foreign trips or expensive cars, but avoid that. Borrow only when you are sure that you can repay it. There is no point piling up debt without a legitimate reason.

    If you are looking for the right personal loan, check out our 9 results from 9 banks now. This information was last updated on 20 February 2018.

    What is a personal loan?

    A personal loan is an unsecured loan, meaning, you do not need collateral or security to apply for this loan. A personal loan is best suited to meet immediate financial needs. One of the biggest advantages of applying for a personal loan over other lines of credit is that it allows you the flexibility to use the loan for any need or requirement, i.e. it is a general purpose loan.

    Types of Personal Loans in Singapore

    There are two broad types of personal loans currently available in Singapore – a term loan and a personal line of credit or a revolving loan.

    • Term loan – With a term loan, you have to repay the loan amount in monthly instalments over the tenure of the loan or in full by the end of the loan tenure, depending on the terms of the loan. The interest rates on these loans are usually lower when compared to a revolving loan.
    • Personal line of credit – Under this type of personal loan, you can borrow up to a certain percentage of your credit limit. You can make repayments on this loan at any time and with any amount. After you have repaid the amount owed, the same credit will become available to you to draw on once again.

    Reasons to apply for a personal loan

    There are many reasons to apply for a personal loan. As they are general purpose loans, they can be used to fulfill any monetary requirement. Here are some reasons to apply for a personal loan:

    • Consolidation of debt – This is a popular reason to apply for a personal loan. Consolidation of debt allows you to combine all your debt from various lines of credit under a single roof. It has added benefits including a lower interest rate compared to other credit lines and gives you the legroom to restructure your finances and manage money better.
    • Paying off your credit card debt – This is another reason to apply for a personal loan - paying off your credit card dues. The interest rate on a personal loan is much lower when compared to that of a credit card. By using a personal loan to clear your credit card dues, it will help you save on interest and you will be able to rid yourself from your credit card debt much sooner.
    • Paying for your wedding – Your wedding day is one of the most important days of your life and it is not unreasonable to want the day to be perfect. However, planning the perfect wedding is not cheap and it is possible to fall short on cash when planning your big day. A personal loan can help bridge this shortfall and cover expenses, small and large including paying for the venue, food, your wedding dress, etc.
    • Personal Loan
    • To pay for remodeling your home – It is true that there are home renovation loans specifically available for home remodeling and renovations. However, not all such loans are unsecured and not all homes have the necessary equity against which you are looking to apply for this loan. But personal loans are unsecured, require minimum documentation and cover all kinds of expenses. A personal loan in this case is optimum if you are looking for a small loan amount for minor remodeling expenses.
    • Paying for medical expenses – In this day and age, almost everyone is insured with medical insurance, but insurance does not cover all medical expenses. Many health insurance policies do not offer sufficient cover for pre-existing conditions unless you purchase a rider for your insurance, cosmetic surgeries or even travel expenses involved to seek medical treatment elsewhere. Under such duress, you can use a personal loan to pay for such expenses.
    • Taking a vacation – We all have our vacation spots that we wish to go to, however, they are not always easy on our pockets. Dream vacations are most certainly an expensive affair, otherwise they wouldn’t be called “dream” vacations. Whether you want to go on a cruise, visit an exotic location, plan an extended stay abroad, etc., a personal loan can help accomplish all your vacation plans.
    • Relocation – It is not the most common reason to apply for a personal loan, however, it is nonetheless, a reason. Relocation, especially overseas is not inexpensive. Whether you are moving for a better career opportunity, for marriage, etc., relocation can be strenuous. Applying for a personal loan can help you cover expenses including moving your household belongings, personal effects, your vehicle, pets, etc. Having ready and liquid money can also help smoothen the process of relocation.
    • Personal Loan for Tax Payment - Personal loans can also be used for paying taxes, especially if you are short on cash and you have tax debt or high tax liabilities. It is a much better option than using the cash advance feature of credit cards. With personal financing, you will get decent interest rates starting at 8% p.a. often, banks in Singapore let you borrow up to four to six times your monthly salary and you do not even have to declare this loan when you file your taxes. However, note that unsecured loans come with high interest rates, and you should not end up spending more on repaying the loan than what you would earn through tax reliefs.
    • Personal Loan for Family Finance Planning In Singapore, the costs of having a child could be high and even the incentives you get from the government may not be enough to cover your hospital bills. For instance, delivery charges alone could cost you over S$5,000 at a government hospital. However, depending on your situation you may be able to claim only a portion of this through MediSave. So if you are planning to start a family, you will probably have to apply for a personal loan as it can be helpful to cover the hospital expenses.A personal loan is a better option than a credit card cash advance as the interest rates charged with personal loans are comparatively lower. Lower interest rates mean lower cyclic repayments, giving you more room to raise a family.

    Advantages of Personal Loans

    • Personal loans can be used for multi-purposes – Unlike other loans that can only be used for specifically stated reasons, such as a car loan for the purchase of a car, home loan for the purchase of a house, etc., personal loans offer the flexibility to use it for any intent and purpose.
    • Minimal or no documentation requirement – Scanning, faxing, emailing, etc. of documents can become an exhausting process. However, personal loans only require the submission of minimal documents and in some cases, no documents are required to be submitted, especially if you already have a relationship with the bank.
    • Personal loans are approved fast – If you are looking for emergency funds, personal loans are a viable option because they offer instant approvals and disbursement.

    Documents required for a personal loan application

    If you have a relationship with a bank, they may already have your documents and you may not have to submit additional documents or submit only minimal documents. However, the standard documents that banks in Singapore request applicants applying for a personal loan to submit are as follows:

    • Identity proof documents:
      • Singapore Citizens (SCs) and Singapore Permanent Residents (PRs) are required to submit a (front and back) copy of their NRIC.
      • Foreigners are required to submit a copy of their Passport and a valid Employment Pass or S Pass.
    • Address proof documents:
      • Generally applicable to foreigners, applicants maybe requested to submit a proof of residence document to verify their permanent residency in Singapore. Documents such as a utility bill, bank statement, etc. can be submitted as an address proof.
    • Income proof documents:
      • Salaried employees are required to submit the following:
        • Latest payslips (mostly computerized copies).
        • CPF Contribution History.
        • Latest Income Tax NOA (Notice of Assessment) document.
      • Self-employed individuals are required to submit the following:
        • Income Tax NOA (Notice of Assessment) document.
      • Variable/commission based employees are required to submit the following:
        • Commission Statements.
        • Income Tax NOA (Notice of Assessment) document.
        • CPF Contribution History.

    Eligibility Criteria for Personal Loans

    Usually, banks in Singapore will require personal loan applicants to meet the following eligibility criteria:

    • Nationality – Certain banks in Singapore offer personal loans only to applicants who are Singapore citizens (SCs) and Singapore permanent residents (PRs), such as DBS and POSB, while others offer personal loans to all applicants including Singapore citizens, permanent residents and foreigners, such as UOB, OCBC, etc.
    • Age – To be eligible to apply for a personal loan, you must be at least 21 years old. Banks in Singapore usually offer personal loans to applicants within the age bracket of 21 years and 65 years.
    • Income – The income requirement varies based on nationality and employment. For instance, Singapore citizens and permanent residents must earn at least S$20,000 per year to be eligible for a personal loan application. Foreigners must earn a minimum amount between S$30,000 and S$40,000 per year to be eligible for a personal loan. On the basis of employment, usually, the minimum income requirement for salaried employees is lower than that of self-employed and commission based employees.

    Applying for a personal loan in Singapore

    There are many online as well as offline methods of applying for a personal loan in Singapore. The following are the ways of applying for a personal loan offered by banks:

    • Applying online – Banks offer one of the two online ways of applying for a personal loan:
      • You will find the link to an online application form on the bank’s official website. You will be required to complete a series of steps involving providing your personal details, contact details and employment details. On the same application, you will be requested to upload the necessary supporting documents and submit the application online.
      • Another way is when the bank provides the application form online which you will need to download, fill up, attach all the required documents and email it to the bank for approval. Alternatively, you may also have the option to download the form, take a print out, fill in the details, attach the documents and fax it to the bank.
    • Applying via mail – Some banks provide a link to download the entire application form along with the mailing address wherein, you will have to download the form, take a print out, complete the form, attach a copy of all the required documents and then mail it to the bank’s physical address provided on the application form.
    • Phone call – The bank’s website is a one-way communication of what they have to offer with respect to their personal loan. You may have queries that need a response before you make your final decision. Under such circumstances, you can call the bank’s customer service number available on the website for any further clarifications and request the representative to initiate the application process.
    • Applying in person – You can directly visit the nearest bank branch of the bank you are interested in, speak with a member of the staff and apply for the loan, directly in person.

    Monthly Instalment Calculator

    Before you apply for your personal loan, if you wish to know how much you will need to pay on a month-on-month basis to clear the outstanding balance, you can use the monthly instalment calculator. This calculator will provide you your monthly payment schedule for your loan tenure. You can even use this calculator to determine if you can actually afford the personal loan at the interest rates offered by a particular bank. To get a clearer picture of what your monthly instalment payments will look like and how much interest you will be paying on your personal loan, you may be required to provide the following information regarding your loan:

    • Your nationality
    • Your monthly or annual income
    • Your desired loan amount
    • Your preferred loan tenure

    Based on what you feed into this calculator, your monthly instalment amount will be computed. Many banks on the island provide online calculators for their loans for interested applicants to determine what and how much they will be paying throughout the tenure of the loan. There are also third-party calculators available to make such calculations. Many banks including DBS, POSB and OCBC to name a few, have also provided an illustration of what your loan package may look like – information such as the processing fee, disbursed loan amount, loan tenure, interest rate and monthly instalment amounts are provided in the illustration for a specific loan amount across different loan tenures.

    Banks in Singapore have made it extremely simple to apply for their personal loan products through any means convenient for consumers. You can use this as your guide to know the ins and outs of personal loan options, eligibility, factors affecting your loan approval and choose a bank and personal loan that best suits your needs, requirements and financial circumstance.

    Interest Rate:

    The amount of interest that is due for the duration of your loan tenure is referred to as the interest rate. The interest rate that is offered to you by your lender will depend on factors including your loan amount, loan tenure, credit score, annual income, etc.

    Table 3: Find below the interest rates offered for Personal Term Loans and Personal Line of Credit from banks in Singapore:

    Bank Name Interest Rate
    DBS Personal Loan Starting from 5.88% p.a. with EIR from 11.32% p.a.
    OCBC Personal Loans

      • Flexible Repayment (EasiCredit) – Interest rate for new EasiCredit customers starting from 0% p.a. with an EIR of 5.19% p.a. for 6 months with balance transfer

      • OCBC ExtraCash Loan – Starting from 8.18% p.a. and EIR starting from 17.13% p.a.

    Standard Chartered CashOne Starting from 6.88% p.a. with an EIR of 12.75% p.a.
    UOB Personal Loan Flat interest rate of 8% p.a. with an EIR of 14.94% p.a.
    POSB Personal Loan Starting from 5.88% p.a. with EIR from 11.32% p.a.
    CIMB Personal Loans

      • CIMB CashLite – Starting from 4.50% p.a. with an EIR of 8.21% p.a.

      • CIMB Renovation Loan – Starting from 2.98% p.a. with an EIR of 4.85% p.a.

      • CIMB Education Loan – CIMB Prime Rate is 0.11% p.a. (monthly rest rate) with EIR starting from 5.83% p.a.

      • CIMB Portfolio Financing – Interest rates are pegged to SOR and SIBOR rates

    Citi Personal Loan Starting from 7.39% p.a. with an EIR of 13.50% p.a.
    Maybank Personal Loans

      • CreditAble Term Loan – Starting from 7.48% p.a. with an EIR of 14.67% p.a.

      • CreditAble (Personal Line of Credit) – Promotional interest rate of 9% p.a. for the first year

      • Maybank Education Loan – Starting from 4.50% p.a. monthly rest

      • Home Renovation Loan - – Starting from 4.33% p.a.

    Bank of China Personal Loans

      • MoneyPlus Line of Credit – Starting from 1.65% per month with an EIR of 19.80% p.a.

      • MoneyPlus Term Loan - Starting from 6.38% p.a. with an EIR of 14.58% p.a.

    HSBC Personal Loan

      • Personal Loan – Starting from 3.8% p.a. with an EIR of 7% p.a.

      • Personal Line of Credit – Starting from 12.0% p.a.

    Types of interest rates associated with personal loans in Singapore

    Banks in Singapore offers two types of interest rates associated with personal loans – fixed interest rate and flexible interest rate.

    • Fixed interest rate:
    • Also referred to as a flat interest rate, under this rate package, the interest rate will remain fixed for a part or the whole of your personal loan tenure. The interest rate will remain oblivious to market fluctuations. This rate package is ideal for those who want consistency in their monthly instalment payments without worrying about changing interest rate structures and monthly repayment amounts.

    • Variable interest rate:
    • Under this rate package, the interest rate will vary according to market conditions. The interest rate can increase or decrease from time to time throughout the term of your loan. Banks usually offer a lower interest rate for a variable rate personal loan package when compared to a fixed rate personal loan package. However, once the introductory period of your loan elapses, your interest rate can increase or decrease. This rate package is better suited for those who have enough financial bandwidth to accommodate any changes in the interest rate structure in case of an increase in rates. They are usually willing to take the risk in the hope that their interest rates will be on the lower end for a majority of the loan term.

      In Singapore, variable rates are available in 3 forms – interest rates pegged to SIBOR (Singapore Interbank Offered Rate), SOR (Swop Offer Rate) or interest rates pegged to the bank’s internal board rates.

    Banks offering personal loans in Singapore

    Find below the list of banks that offer personal loans in Singapore:

    • ANZ Bank
    • UOB
    • OCBC
    • DBS Bank
    • POSB
    • Citibank
    • Standard Chartered Bank
    • HSBC Bank
    • CIMB
    • Bank of China
    • Maybank
    • ICBC

    Find below the list of popular banks that offer personal loans to foreigners in Singapore:

    • ANZ Bank
    • Standard Chartered Bank
    • OCBC
    • Citibank
    • HSBC Bank
    • CIMB – CIMB Portfolio Financing Loan only

    Components of a personal loan

    All personal loans offered by banks in Singapore will have the following components:

    • Loan tenure
    • Loan amount
    • Interest rate

    Loan Tenure:

    Loan tenure/loan tenor/loan term refers to the period of time over which you will repay the complete outstanding loan amount. Loan tenures in Singapore typically ranges between 1 year and 5 years. Loan tenures are applicable to personal term loans.

    Table 1: Find below the loan tenures offered for Personal Term Loans from banks in Singapore:

    Bank Name Loan Tenure/Term
    DBS Personal Loan 1 year to 5 years
    OCBC ExtraCash Loan 1 year to 5 years
    Standard Chartered CashOne 1 year to 5 years
    UOB Personal Loan 12 months to 60 months
    POSB Personal Loan 1 year to 5 years
    CIMB Personal Loans 1 year to 10 years (varies according to the type of personal loan)
    Citibank Personal Loans 12 months to 60 months
    Maybank Personal Loans 12 months to 60 months
    Bank of China MoneyPlus Term Loan 12 months to 36 months
    HSBC Personal Loan 1 year to 7 years
    ICBC Personal Loans 1 year to 3 years

    Loan Amount:

    The amount that your lender offers you, the borrower, is called the loan amount. What loan amount you are eligible for will depend on various factors including your income, TDSR (total debt servicing ratio), your age, etc. You may be eligible for a loan amount higher or lower than your expectation. If you are eligible for a higher loan amount than what you require, it does not mean that you have to accept that offer. This is because, repayment of a loan amount comprises of two components – the principal amount and the interest amount. The interest rate applied on your principal loan amount will determine the interest amount you need to repay. Therefore, the higher your loan amount, the higher interest you will be paying on the loan.

    For term loans, banks in Singapore usually offer a loan amount against your monthly income. In case of a personal line of credit, you will be eligible to borrow against a certain percentage of your credit limit.

    Table 2: Find below the loan amount offered for Personal Term Loans and Personal Line of Credit from banks in Singapore:

    Bank Name Loan Amount
    ANZ Personal Loans

      • ANZ FlexiLoan

        • 3 categories include:

          • Below S$15,000

          • Between S$15,000 and S$30,000

          • S$30,000 and above

    • ANZ MoneyLine Term Loan - Up to 4X your monthly income
    DBS Personal Loan

      • Up to 4X your monthly income

      • Up to 10X your monthly income if your annual income is above S$120,000

    OCBC Personal Loans

      • Flexible Repayment (EasiCredit) - Up to 6X your monthly income

      • OCBC ExtraCash Loan - Up to 6X your monthly income

    Standard Chartered CashOne Up to 4X your monthly income
    UOB Personal Loan Starting from S$1,000 onwards
    POSB Personal Loan

      • Up to 4X your monthly income

      • Up to 10X your monthly income if your annual income is above S$120,000

    CIMB Personal Loans

      • CIMB CashLite – Up to 80% of your credit limit

      • CIMB Renovation Loan – Up to 6X your monthly income OR S$30,000, whichever of the 2 is lower

      • CIMB Education Loan - Up to 8X your monthly income OR S$200,000, whichever of the 2 is lower

      • CIMB Portfolio Financing – Loan to Value up to 100%

    Citi Personal Loan

      • Up to S$100,000

    Maybank Personal Loans

      • CreditAble Term Loan – Up to 90% of your credit limit

      • CreditAble (Personal Line of Credit) - Up to 4X your monthly income

      • Secured Overdraft – Pegged to pledged assets, not income

      • Maybank Education Loan - Up to 8X your monthly income

      • Home Renovation Loan - Up to 6X your monthly income

    Bank of China Personal Loans MoneyPlus Line of Credit - Up to 4X your monthly income
    HSBC Personal Loan

      • Personal Loan - Up to 8X your monthly income

      • Personal Line of Credit - Up to 2X your monthly income capped at S$100,000

    ICBC Personal Loans Up to 90% of the pledged asset

    Mistakes made when applying for a personal loan and how to remedy them

    Getting a personal loan is a commitment and making a mistaken when applying and accepting a personal loan can really come back to bite you. Here are some common mistakes made when applying for a personal loan in Singapore:

    • Accepting the first offer – Do not accept anything and everything that comes your way without having thoroughly researched to know what is the best you can get out of the personal loan.
    • Applying for a personal loan package without knowing your credit score – You need to know where you stand in terms of your credit rating before you apply for a personal loan package. It will help you better assess what you are eligible to get based on your credit history and score.
    • Not choosing a licensed moneylending company – It might be tempting to accept an offer with an extremely attractive interest rate package that you might not get from banks and financial institutions. However, it is still important to know who you are borrowing from. Always be sure to pick a licensed moneylender in Singapore to have a hassle-free loan experience.
    • Not checking for additional fees and charges – You might have everything sorted with respect to your personal loan, but there could be hidden fees and charges that can cost you heavily if you have not taken such aspects into consideration. Additional fees such as processing fees, handling fees, legal charges, etc., may be deducted from your loan amount and you might end up getting a lesser amount than what you bargained for.
    • Skimming through the terms and conditions – Reading the fine print on your personal loan offer might be the most boring part of your experience, however, you need to know exactly what you are paying for. Additionally, not reading the terms and conditions might add to your cost if you were not aware of it.
    • Providing false information in the hopes of getting a better personal loan package – Your lender will cross verify every piece of information on your personal loan application form. You will even be required to submit supporting documents for the information you have provided. Therefore, do not fabricate any information during the application process, especially about your income or your credit score.
    • Not making a budget for your expenses – You will already have numerous bills you have to tend to every month. A personal loan repayment will be an addition to this pile. Hence, do not apply for a personal loan before you make a budget for repayment of all your bills and credit lines to see if you can actually afford a personal loan.
    • Shying away from asking important questions – Every borrower is unique and faces different circumstances. Hence, if there is any issue that you are currently facing, then make sure to communicate this with your lender and ask how it will affect your loan approval. Do not wait until the last minute and jeopardize your approval.
    • Borrowing more than you need – If you are eligible for a higher amount than what you wish to borrow, it is not necessary that you have to borrow more than what you require. You can take a shorter loan tenure and save on your interest. Also, do not borrow an amount that you might not be able to pay back. This will increase the chances of you defaulting on your loan.
    • Not negotiating the terms of the loan with the bank – It is better to negotiate with the bank to get the best personal loan package that you are eligible for.

    Factors that determine your personal loan eligibility in Singapore

    There are several factors, on the basis of which a bank or financial institution may approve or reject your personal loan application. Find below the factors that influence your personal loan approval/rejection decision:

    • Nationality:
    • One of the first factors that banks in Singapore consider while reviewing your personal loan application is your nationality. Certain banks only offer their personal loan services to Singapore Citizens (SCs) and Permanent Residents (PRs), while other banks extend their personal loan services to even to foreigners. For instance, POSB and DBS banks offer personal loans only to SCs and PRs, whereas, banks such as ANZ and Standard Chartered offer their personal loans to SCs, PRs and foreigners. CIMB bank’s various types of personal loans, some of which are eligible only for SCs and PRs, while others extend to foreigners as well.

    • Annual Income:
    • Your annual income is an important deciding factor for the approval or rejection of your personal loan. It is one of the most crucial factors in determining your capacity to repay the loan. It will give an idea of whether you may default on your personal loan or not. It is also a deciding factor for the bank to assess whether you can afford the personal loan at the rates offered by the bank. Hence, in order to eliminate concerns revolving around the repaying capacity of applicants, banks impose a minimum income criterion to be eligible for their personal loans. Furthermore, as foreigners are perceived to be a higher risk when compared to Singapore Citizens and Permanent Residents, the minimum income criterion for foreigners is higher than that of SCs and PRs.

    • Age:
    • Your age is another deciding factor when it comes to the approval or rejection of your personal loan application. All banks have a minimum and maximum age criterion. The minimum age required to apply for a personal loan in Singapore is 21 years. This is a unanimous criterion across all banks on the island, whereas, the maximum age usually varies between 60 and 65 years. This is because it is considered to be the ballpark age for retirement for salaried as well as self-employed individuals after which the source of income generally becomes scarce.

    • Employment:
    • All banks require you to furnish your employment documents to verify your employment status. Whether you are a salaried employee, self-employed or a commissioned/variable employee, will be considered when you apply for your personal loan. Certain banks have different income requirements for salaried employees and self-employed/commission based employees. Your commission slips, Income Tax (NOA) Notice of Assessment, payslips, etc. are requested to verify your employment status.

    • Employer:
    • For salaried employees, the reputation of the employer may also be taken into consideration when approving or rejecting a personal loan application. You may be requested to verify your employment status with your employer via providing valid documents that confirm the same. Especially for foreigners applying for a personal loan, banks may request a letter of employment certified by the employer for verifying the employment status, directly from the employer.

    • credit score :
    • Your credit history and score are pivotal for the approval of your personal loan application. When you send an application to a bank, they will request your credit report from the credit bureau. Your credit history will provide insight into your financial behavior such as your repayment history and pattern, your open and terminated line of credits, your debt to income ratio, etc. It is not only an indicator of whether you will be able to keep up the payments on your loan, but also an indicator of how likely you are to default on the loan.

      Individuals whose credit score are on the higher side, a score between 1911 and 2000 with an “AA” rating, have the least probability of defaulting on the loan. On the other hand, those who have a credit score between 1000 and 1723 with a rating of “HH”, have the highest probability of defaulting on the loan. If you do not have a sufficient credit history, you will receive an ungraded score of “CX”, which means “Insufficient Credit Activity”.

    What you need to consider before you apply for your personal loan

    In order to get the best personal loan package available in Singapore, the following are some of the parameters you should give due consideration to before you apply for your personal loan:

    Interest rate:

    One of the most important as well as influential factors in a personal loan package is the interest rate. It will determine how expensive or inexpensive it is to apply for the loan. The interest rate and amount will determine how much extra you will be paying the bank for applying for their personal loan product. A low interest rate means lower monthly instalments and a high interest rate means bearing high instalment payments on the loan. Banks offer the lowest interest rates to customers who have an impeccable credit history. This is because, a high credit score means the least chance of defaulting on the loan. Therefore, if you have a good credit score, you are likely to get the best rates from all banks in Singapore. So, you should shop around and see what the best rate package you are eligible for is.

    Additionally, some banks also offer the lowest interest rate packages to new customers, as a way of increasing their customer base. For example, OCBC bank is currently offering new customers of their bank a 0% interest rate with an EIR of 5.19% p.a. on their Flexible Repayment personal loan – EasiCredit + balance transfer.

    Credit Score:

    Your credit score is an integral cog in your personal loan application. The loan package that the bank offers you will heavily depend on your credit score. Your credit history and score will provide your lender a peek into your reliability, repaying capacity and help establish a pattern of your repaying habits, i.e. whether you make timely payments on your various lines of credit, whether you repeatedly miss payments or make late payments, etc. It will also let your lender know if you can actually afford the personal loan – they will determine this based on your TDSR or Total Debt Servicing Ratio which will provide an insight into how much of your monthly income is used to repay existing debts and how much is available to take on the personal loan repayments.

    Most importantly, your credit score will determine your probability of defaulting on the personal loan. No lender wants to risk offering a personal loan to an applicant who is highly likely to default on their loan. This is how they determine the likelihood of defaulting on loans based on your credit score:

    • Credit score between 1911 and 2000:
      • Grade – AA
      • Probability of defaulting – between 0.00% and 0.27%
    • Credit score between 1844 and 1910:
      • Grade – BB
      • Probability of defaulting – between 0.27% and 0.67%
    • Credit score between 1825 and 1843:
      • Grade – CC
      • Probability of defaulting – between 0.67% and 0.88%
    • Credit score between 1813 and 1824:
      • Grade – DD
      • Probability of defaulting – between 0.88% and 1.03%
    • Credit score between 1782 and 1812:
      • Grade – EE
      • Probability of defaulting – between 1.03% and 1.58%
    • Credit score between 1755 and 1781:
      • Grade – FF
      • Probability of defaulting – between 1.58% and 2.28%
    • Credit score between 1724 and 1754:
      • Grade – GG
      • Probability of defaulting – between 2.28% and 3.46%
    • Credit score between 1000 and 1723:
      • Grade – HH
    • Probability of defaulting – between 3.46% and 100%

    If you do not have a sufficient credit history, you will receive a grade of “CX” meaning “Insufficient Credit Activity”. Hence, as you can see, the higher the credit score, the lesser the probability of defaulting on the loan, thereby, the higher the chances of getting your personal loan approved and at the best interest rates.

    But, if you have a low credit score at the moment, do not be disheartened. You can repair your credit score in several ways before you apply for your personal loan. Some of them include making timely payments on your open line of credits, making more than the minimum payment on your credit cards, closing unnecessary line of credits to decrease your debt to income ratio, etc. If none of this helps, you could always have a co-signer on the loan to get a better package or even use a collateral to better assure your lender of your sincerity to make timely payments on your loan.

    Terms and conditions of your loan:

    When you finally receive your offer letter from the bank detailing the various facets of your personal loan, do not just rush to sign the contract. You should take some time to read the details of the loan agreement, especially the fine print – terms and conditions. Do not just skim through the document, look into any hidden fees and charges and how they impact your personal loan. Look for costs that you did not take into consideration, such as processing fee, legal charges (if any), prepayment penalties, loan cancellation charges (if you get a better offer), etc. Have you been offered a low interest rate only for a specific period of time? Is your low interest rate an introductory/promotional offer? If yes, then find out what your interest rates are after this period elapses. Generally, banks offer a low interest rate for the first 6 months or up to a year into your loan tenure. After this period elapses, the interest rates tend to be higher. Hence, it is extremely important to read the terms and conditions associated with your personal loan before you sign the papers.

    Your loan tenure:

    If you take a quick glance at any bank’s loan repayment table or chart, the first thing you will notice is that, the longer the loan tenure is, the lesser the monthly repayment amounts are. However, are you really paying lesser throughout your loan tenure? Although you will be making lower payments on your instalments, you are paying a higher interest on your loan. The total interest amount on your loan will be higher, the longer your loan tenure is. If your debt to income ratio is currently high and you are unable to make higher monthly instalment payments on your personal loan, under such circumstances, it makes sense to take a personal loan with a longer loan tenure. However, if you are looking to save on your interest payments, it is better to choose a shorter loan tenure. Even if your monthly instalment payments are slightly higher, you will be paying lesser on your interest and you can rid yourself of the debt much sooner.

    Personal loan or personal line of credit:

    If you are looking for short term lending, then a personal line of credit is a better option for you. It is true that credit cards charge one of the highest rates of interest when compared to other lines of credit, however, they can prove to be extremely beneficial for short term lending purposes and here’s how – many banks in Singapore are offering customers a 0% interest rate on their personal line of credit (drawn on your credit card) for up to 1 year as an introductory offer. Therefore, if you are looking to borrow money for an immediate need and can repay it within this introductory period, you will be paying nothing in terms of interest on your personal credit line. But make sure to not keep spending on your credit card as your debt may start snowballing and this can come back to haunt you.

    On the other hand, personal loans are offered for a minimum tenure of 1 year. However, with a personal loan, you can borrow a larger amount of money when compared to a personal line of credit which is pegged to your credit limit. Depending on your bank and credit card, you may be able to borrow a maximum of 90% of your credit limit for your immediate financial needs. A personal term loan amount, however, will depend on your annual income and various other factors.

    Personal loan Approval-In-Principle (AIP)

    AIP or approval-in-principle is a conditional or a provisional approval of your personal loan. This form of approval is usually provided instantly by the bank based on the information you have submitted on your application form. For example, HSBC Singapore offers an AIP in 1 minute to their applicants. However, it is important to note that this is not the final or formal approval of your loan application. Once you have submitted all the required documents and met all parameters of the eligibility criteria, the bank will offer their final decision on your application.

    Another aspect that you need to note in reference with the AIP is that it is time bound. This means that once the bank has offered you with a conditional approval on your personal loan application, you then have a specific amount of time (generally a few days) to submit the remainder of the requested information and/or documents, in order to receive a formal approval of your loan. This time differs between banks in Singapore. For example, Standard Chartered provides a time period of 30 days to applicants after they receive their approval-in-principle, whereas, HSBC Singapore on the other hand, offer their applicants an approval-in-principle period of 14 days.

    Personal loan fees and charges

    Here are some of the common fees and charges associated with your personal loan:

    • Processing fee – Banks usually charge a processing fee to process your personal loan application. This includes requesting for your credit report from the credit bureau, obtaining the necessary information and documents, etc. which will take the loan process further. The processing fee charged will either be an amount in Singapore Dollar (S$) or a percentage of your approved loan amount. For example, UOB Bank charges a processing fee of 1.8% of your approved loan amount. HSBC Singapore, has waived their processing fee of S$88.
    • Late payment fee – When you do not make the repayment on your monthly instalment for your personal loan by the payment due date, you will be charged a late payment fee. You will have to pay this additional fee along with your monthly instalment amount. For example, Standard Chartered Bank and OCBC charge a late payment fee of S$80.
    • Prepayment fee – When you finish clearing the outstanding balance on your personal loan before the end of your loan tenure, it is referred to as a prepayment of your loan amount or an early repayment. Some banks may charge you a prepayment penalty or fee for early repayment of your personal loan. This is to incur the interest payments they have lost on account of your early payment of your loan. For example, HSBC Singapore charges an early repayment fee of 2.5% of the redemption amount. OCBC charges 3% of the amount that is to be repaid with a minimum charge of S$1,000.
    • Loan cancellation fee – After your personal loan has been approved, if you choose to cancel this loan, the bank will charge you a loan cancellation fee. This fee will be charged according to the bank’s discretion.

    Note: Please check with the respective bank regarding the additional fees and charges associated with their personal loan.

    FAQs

    Q. How will I know when my repayment due date for my personal loan is?

    A. Your due date for monthly repayments would be mentioned in the notification letter that is posted to you by the bank. Usually, your first monthly repayment date will fall on the same date from your loan approval date. The date will remain the same for the coming months unless it says something else in the notification letter.

    Q. What are the steps involved in personal loan approval from a bank?

    A. You can apply for a personal loan using the following steps:

    • Visit the desired bank’s website.
    • Apply for a personal loan online.
    • Upload the necessary documents (if prompted on the website).
    • Click the submit tab to complete the loan application.
    • Once your loan is approved, you will be notified about the decision.

    Q. There are plenty of financial banks and institutions. How do I decide which bank to take a personal loan from?

    A. When you are applying for a personal loan, you will need to keep in mind that banks will have interest charges, processing fee, pre-closure charges, late payment fee and other charges. These charges that are applicable on a personal loan will vary from one bank to another.

    It is advisable to first compare the details from all available banks, to get an understanding of the above charges and the clauses associated with them. Post this, you can opt for a bank that gives you the best deal.

    Q. I am not sure about the amount that I need to repay on a monthly basis. Where can I find this information?

    A. The amount you need to repay in monthly instalments will usually be mentioned in the notification letter you would have received from the bank. However, if this is not available, you can dial the bank’s hotline number to obtain information about your monthly repayments. The hotline number can be obtained from the respective bank’s website. Apart from this, you can estimate the amount required through a personal loan calculator, and ensure that you keep the money aside every month.

    Q. What are the modes of monthly repayments?

    A. You can pay your monthly repayments by cheque, by cash, or by bank transfer (GIRO or FAST).

    Q. I was unable to pay my personal loan instalment on time. Will I be charged a late payment fee?

    A. It is important that you pay your monthly repayments on time. Most banks in Singapore levy a late payment fee in case of missed payments by the due dates.

    Q. Will my credit score be affected if I default on my personal loans?

    A. Yes, your credit score and rating will depreciate if you default on your personal loan repayments. Banks and financial institutions will gauge your loan repayment capacity using your credit history. It is crucial that you maintain a good credit score as this will help you secure a loan in the future without any hassles.

    Q. What are the types of fees involved while securing a personal loan?

    A. Most banks charge certain common fees. These include loan processing fee, early repayment fee, overdue interest fee, and late payment fees. You can refer to the terms and conditions of the loan document for detailed information on the list of applicable charges.

    Q. Can I opt for a personal loan pre-closure?

    A. Yes, you can opt for a personal loan pre-closure. Most banks will require you to give a written communication or notice stating your request. Banks will also levy pre-closure charges or early repayment fees depending on the loan amount and tenure.

    Q. I have applied for a personal loan but haven’t yet received any updates from the bank. What should I do?

    A. Banks or financial institutions will have complete discretion on whether a loan can be granted to an individual or not. If you qualify for a personal loan and if you have applied online, you will receive an email or notification once your loan is approved by the bank. Certain banks may also allow you to check your application status online. Alternatively, you can call the bank’s hotline number to obtain information about the status of your loan.

    Q. How can I apply for a personal loan?

    A. Different banks will have different eligibility criteria. You will need to first check whether you qualify for the loan. If you do, you can visit the nearest bank branch and submit the mandatory documents necessary to process your loan. Alternatively, you can also apply for a personal loan online on the respective bank’s website or dial the bank’s hotline number for further information.

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