Cash woes? A personal loan to the rescue!

    Personal Loan For Foreigners in Singapore

    Based on a study conducted by BBC, Singapore has been termed as a ‘utopia’ by expats living in this city-state due to its employment opportunities and work-life balance. However, it has also been termed as one of the most expensive cities to settle in. As a foreigner in Singapore, you may come across situations when you will need cash urgently to meet an unforeseen expense. That’s where personal loans come in handy. In Singapore, you can get a personal loan for a tenure of up to 7 years at an interest rate of around 8% p.a., depending on your income level.

    Some Situations When You May Need a Personal Loan in Singapore

    Imagine you are studying in a university in Singapore and you need immediate cash to buy a laptop for your chosen course. What do you do? You can go ahead and take a personal loan to buy it. The need for extra credit can arise within the first few months of moving to Singapore. You might need a personal loan to pay for your security deposit for the rented apartment or to renovate your new apartment. A personal loan can also come handy to cover your relocation and medical expenses, repair your car or send cash home. In case you want to permanently settle in the country, you can use this loan amount to pay for the application process to become a Permanent Resident.

    As a student, you can opt for a personal loan to fund your education. You will probably end up paying 50% more in tuition than a local student for the same course. The amount you withdraw can cover your stay at the college hostel and purchase of new books and accessories.

    Personal Loan For Foreigners in Singapore

    Is Personal Loan the Only Option You Have?

    Most banks in Singapore approve loans to expats if they have a work permit but, impose a high minimum income requirement. For instance, some banks would require you to have an annual income of at least S$40,000 and hold an employment pass with a minimum of one year validity.

    If you do not meet the eligibility criteria, then you can look for alternative sources to fund your short-term needs like a licensed moneylender. Moneylenders are known for processing and approving the loan applications faster. In terms of interest rates, licensed moneylenders charge a higher rate compared to banks. However, this interest rate is capped at 4% per month.

    Few Things to Look out For Before Applying for a Loan

    If you want to take a personal loan from a bank, you must keep certain things in mind:

    • You must be at least 21 years of age to apply.
    • You must be a full-time employee in Singapore.
    • You should have a valid E-pass or S-pass.
    • You have to submit your recent payslips and a letter from your employer certifying your employment.
    • You must have bank statement of the last 6 months.
    • You have to provide a valid address proof like a tenancy agreement.

    Check Out Some Personal Loan Options You Have

    Here are some personal loan options for foreigners in Singapore:

    Points to Remember While Choosing Your Personal Loan

    • The right loan tenure: Your loan tenure will determine the amount of interest you’ll be paying. Hence, it is an important factor to consider. Generally, the loan tenure is of 5 years but, it can go beyond 5 years in certain cases if the loan amount is huge and the bank approves your request for a long tenure. The longer the loan tenure, the higher the interest. Hence, if you want to reduce the repayment amount, go for a shorter tenure.
    • Negotiate with the bank: Although the bank might quote a certain interest rate on their website, you can negotiate to get a lower interest rate. This technique works if you have a good relationship with the bank.
    • Employment stability and a good credit score: Before approving your application, banks will look at your employment history like the time period spent with the organisation and total years of work experience. Having a good credit score will also help you in the long run as this indicates that you have been able to manage your credit in the past.
    • Reduce your existing debt: Before you apply for a personal loan, make sure you pay off a large chunk of your current debt. Applying for a personal loan on top of your credit card debts will make things worse. Know the consequences of defaulting on payments and large debts.
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