• Personal Loan BYTES FROM OUR KITCHEN

    Unsecured Loans

    Personal loan is a loan taken from a bank or a moneylender for unspecified purposes, which could be anything from buying a new Apple gadget, to paying for your or your sibling’s or child’s wedding, to going on a foreign trip to meeting emergency medical expenses. We all may end up taking a personal loan at one time or another during our lifetime.

    Types of personal loan

    Personal loans are of 2 kinds:

    1. Secured loans: Secured loans are borrowings made against an asset such as fixed deposit account or car or house. Some secured loans may also require you to have a guarantor. You will have to pledge the asset in the name of the lender before you get the loan. And in case you are unable to repay the loan, the lender will confiscate the asset and sell or auction it to retrieve their loan amount. Other products such as home loans and car loans are secured loans.
    2. Unsecured loans: In unsecured loans, you do not pledge anything to the bank, and the bank gives you the loan amount based solely on the guarantee of your income and credit score. If you default on such a loan, the lender cannot confiscate anything but is likely to sue you to get their money back. Education loans and credit cards are also types of unsecured loans. Most of the personal loan products offered by banks in Singapore are unsecured in nature, though there are a few secured products such as secured loans and secured overdraft.

    Why take unsecured personal loans

    Here are some reasons why you should take an unsecured loan instead of a secured one:

    • Risk level: Personal loans are generally taken to spend off, not to save or invest. When you take a loan for an unspecified purpose, it is risky to pledge an asset because the purpose is non-profitable. Unless you are taking a personal loan for the purpose of investment, that is.
    • Good repayment capacity: If your monthly income is stable and high enough for you to be able to repay a loan without needing to depend on the back-up of an asset, then you going for an unsecured loan is a safe bet. Unsecured loans can also be easily obtained if your repayment capacity and your credit score are high.
    • Flexible: When it comes to a reason for taking a personal loan, each person could have their own needs. You could use an unsecured personal loan for debt consolidation, wedding and honeymoon expenses, to pay off your credit card dues, for an overseas holiday, or for any emergency. It depends on how urgent your need is.
    • Easy to get: Unsecured loans are easy to obtain as the paperwork is minimal. The bank doesn’t have to check up on your guarantor or collateral security, which makes it easy for them to approve the loan within hours of your application. All you need to show are a steady source of income and a good credit score.
    • Customisable tenure: You can get an unsecured personal loan for tenures ranging from 1 to 5 years. You can choose the tenure depending on your repayment capacity and income.

    Banks offering unsecured personal loans in Singapore

    The following are the unsecured personal loans offered by banks in Singapore:

    Bank

    Personal Loan Product

    ANZ

    ANZ FlexiLoan

    ANZ MoneyLine Term Loan

    DBS

    DBS Personal Loan

    DBS Debt Consolidation Plan

    DBS CashLine

    OCBC

    OCBC EasiCredit

    OCBC ExtraCash Loan

    OCBC Debt Consolidation Plan

    Standard Chartered

    Standard Chartered CashOne

    Standard Chartered Debt Consolidation Plan

    UOB

    UOB CashPlus

    UOB Personal Loan

    UOB Debt Consolidation Plan

    POSB

    POSB Personal Loan

    CIMB

    CIMB CashLite

    CIMB Portfolio Financing

    CIMB Debt Consolidation Plan

    Citibank

    Citi Personal Loan

    Citi Debt Consolidation Plan

    Citi Ready Credit

    Maybank

    Maybank CreditAble Term Loan

    Maybank CreditAble Personal Line of Credit

    Maybank Debt Consolidation Plan

    Bank of China

    BOC MoneyPlus Term Loan

    BOC MoneyPlus Line of Credit

    BOC Debt Consolidation Plan

    HSBC

    HSBC Personal Loan

    HSBC Personal Line of Credit

    HSBC Debt Consolidation Loan

    Interest rates for unsecured personal loans

    Unsecured loans come at a higher rate of interest than secured loans. The Effective Interest Rates (EIR) on unsecured personal loan, for example, are between 11% to 22%, which is way higher than those of products such as car loan (around 3.25%) or home loan (1.5% to 2.5%).

    Let us look at the interest rates offered by some banks in Singapore:

    Product Interest Rate
    ANZ FlexiLoan Starting from Applicable Interest Rate (AIR) of 5.8% p.a. and EIR of 10.91% p.a.
    ANZ MoneyLine Term Loan Starting from AIR of 6.6% p.a. and EIR of 11.90% p.a.
    DBS Personal Loan Starting from AIR of 5.88% p.a. and EIR of 11.32% p.a.
    DBS CashLine Starting from an EIR of 19.8% p.a.
    DBS Debt Consolidation Plan Starting from an EIR of 9.8% p.a.
    OCBC EasiCredit Starting from AIR of 0% p.a. and EIR of 5.19% p.a. for 6 months with balance transfer and EIR of 19.98% without balance transfer
    OCBC ExtraCash Loan Starting from AIR of 8.18% p.a. and EIR of 17.13% p.a.
    OCBC Debt Consolidation Plan Starting from AIR of 6% p.a. and EIR of 10.46% p.a.
    Standard Chartered CashOne Starting from AIR of 6.88% p.a. and EIR of 12.75% p.a.
    Standard Chartered Debt Consolidation Plan Starting from AIR of 4.98% p.a. and EIR of 9.55% p.a.
    UOB Personal Loan Flat AIR of 8% p.a. and EIR starting from 14.94% p.a.
    UOB CashPlus Starting from AIR of 6% p.a.
    UOB Debt Consolidation Plan Starting from AIR of 2.88% p.a. and EIR of 5.27% p.a.
    POSB Personal Loan Starting from AIR of 5.88% p.a. and EIR of 11.32% p.a.
    POSB Debt Consolidation Plan Starting from an EIR of 9.8% p.a.
    CIMB CashLite Starting from AIR of 4.5% p.a. and an EIR of 8.21% p.a.
    CIMB Portfolio Financing Interest rates are pegged to SOR and SIBOR rates
    Citi Personal Loan Starting from AIR of 4.82% p.a. and an EIR of 9% p.a.
    Citi Ready Credit Starting from an interest rate of 1.663% per month
    Citibank Debt Consolidation Plan Starting from an EIR of 10.5% p.a.
    Maybank CreditAble Term Loan Starting from an AIR of 7.48% p.a. and EIR of 14.67% p.a.
    Maybank CreditAble (Personal Line of Credit) Starting from an interest rate of 9% p.a.
    Maybank Debt Consolidation Plan Starting from an AIR of 4.7% p.a. and EIR of 8.48% p.a.
    Bank of China MoneyPlus Line of Credit Starting from an AIR of 1.65% per month and an EIR of 19.80% p.a.
    Bank of China MoneyPlus Term Loan Starting from and AIR of 6.38% p.a. and an EIR of 14.58% p.a.
    HSBC Personal Loan Starting from an AIR of 3.8% p.a. and an EIR of 7% p.a.
    HSBC Personal Line of Credit Starting from an EIR of 5.92% p.a. with balance transfer
    HSBC Debt Consolidation Plan Starting from an AIR of 4.7% p.a. and an EIR of 8.5% p.a.

    Eligibility criteria for unsecured personal loans

    The eligibility criteria for personal loans may be different at different banks, but some common parameters are:

    • You must be 21 years or older, but not older than 65.
    • You should have an annual income of at least S$20,000 if you are a Singaporean citizen or Permanent Resident.
    • You should have an annual income of at least S$40,000 if you are a foreigner with an employment pass that is valid for a minimum period of 1 year.

    Documents required

    The following documents are generally solicited by the bank if you apply for an unsecured personal loan in Singapore:

    • Identity Proof:
      • Copy of NRIC (both front and back) for citizens and permanent residents (PR) of Singapore
      • Copy of passport for foreigners
    • Income Proof:
      • S Pass/Employment Pass for salaried employees
      • Latest Income Tax Notice of Assessment
      • Bank statement
      • Latest 6 or 12 months’ CPF contribution statement
      • Latest computerised payslips
      • Commission Statements for commission-based workers
    • Address proof (for foreigners):
      • Utility bill
      • Bank passbook or statement

    How to apply for unsecured personal loans

    If you need an unsecured personal loan, you can either approach the nearest branch of the bank you’re looking for, or apply it online on the bank’s website. You need to have all the documents ready, and be prepared to give your personal, contact and income information to the bank. You could also apply for a personal line of credit through your credit card.

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