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Do You Really Need To Take Out A Personal Loan?

Alexa Fang

Alexa Fang

Last updated 07 April, 2019

Before you take that step into Debt-ville, do yourself a favour — go through this checklist, then make the right decision.

At SingSaver, we are all about taking care of your financial health. So unless it’s an emergency, taking out a personal loan should be your last resort.

By emergency, we mean a major hospital bill that your insurance can’t cover, a sudden loss of income or some such unfortunate unforeseeable circumstance. Not a quick fix for your Monday blues on Net-A-Porter.

Loans come with its share of problems that can only stress you out even more – high interest rates. So, do yourself a favour. Before you open up that personal loans application form, go through the following checklist, ask yourself a few essential questions and be very honest about it.

If the answer is still a “yes” at the end of it, then, you got to do what you got to do. Just do it with caution, prudence, and a very good repayment plan you will adhere to.

Question 1:  What do you need the money for?

Like we said, we are all about building and maintaining good financial health. The first question to ask yourself is: What do you need the extra money for? Is it an emergency? Is it an impulse? Is it a need or a want? Can it wait? Are there other avenues of acquiring the money without turning to loans?

See also: Your Go-To Personal Loans Guide in Singapore

Questions 2:  Do you need this money right now?

Apart from deciding on whether the money is a necessary expenditure, another important factor to consider is the urgency of spending this money. For instance, if it’s a wedding, can you afford to wait another year? Can you reduce the cost of your wedding to something more realistic and financially sensible? If the money is for pursuing further education, would it be better to save up first while gaining work experience and some savings?

In the event that you do need an urgent loan, Standard Chartered is offering instant approval and disbursement for its CashOne Personal Loan, and an attractively low interest rate of only 3.88% p.a.

Question 3:  Can family or friends help?

Sure, money can sow discord between family and friends. But if you’re in serious need, these should be the first people you approach before you turn to the banks. Can they help you out? It might help if you take the initiative to draft a repayment plan — perhaps with interest.

Question 4:  Do you qualify for a personal loan?

Before you think about getting a personal loan, check your eligibility. A few basic requirements:

  • You are between 21 and 65 years old
  • You have an annual income of at least S$20,000
  • You have a Singapore Identification Card (IC) or Employment Pass (EP) + Passport

Do note that there may be slightly stricter personal loan requirements if you're a foreigner. For example, a higher minimum annual income or some form of credit history.

Question 5:  Are you borrowing within your means?

As personal loans are usually unsecured, this results in much higher interest rates than other types of loans. Make sure that you are aware of your “means” — the monthly payments (mind hidden fees), for example, is one thing to consider. Is your monthly expenditure way less than your monthly income? If so, you will experience less difficulty in paying off the loan. If that is not the case, then a loan could add to your burden and put you at financial risk, possibly affecting your credit rating.

Question 6:  How long will it take you to pay it off?

Once you have decided that you need a personal loan, it’s imperative to work out the payment cycle of the loan. How long will it take you to pay it off? How much interest is it going to cost you? Calculate your fixed expenses for the upcoming months, or years, if possible, to get a bigger picture of whether you are in a good or bad financial position. Remember, the longer your loan lasts, the more interest charges you incur. Do not drag it out.

Question 7:  Can you find the right loan for you?

Use our personal loan comparison tool and spend some time researching on the loan that is most suitable for your need.

This will give you a good idea of the interest charge (which changes every month) you will end up paying. For example, if the amount you require is not too high, then you can go straight for an interest-free or low-interest loan — easy credit or balance transfer — to tide you over.

Always, always, compare between loans before committing to them. As this analysis shows, choosing the right loan can save you hundreds, if not thousands, in interest alone.


If you have more questions about personal loans, you may find some answers through our website FAQ page.

Apply for the Standard CashOne Personal Loan by 31 May 2019 and receive $100 + $1,000 in welcome gifts and bonus cash!

Exclusively for the month of May 2019, SingSaver is running a promotion that is rewarding you with up to $1,100 in additional welcome cash if you apply for the Standard Chartered CashOne Personal Loan! Simply apply through our promotion page and tell us what you would do if you had an additional $1,000 cash and why.

The top 3 most inspirational answers will win $1,000 in cash! Terms and conditions apply.

Apply Now

Read these next:

Balance Transfer vs Personal Loan: Which is Better for You?

What is a Debt Consolidation Plan and How Does it Work in Singapore?

4 Ways to Pay Off Credit Card Debt in Singapore

What's the Difference Between Good Debt and Bad Debt?

How Does a Balance Transfer Work in Singapore?

Alexa FangBy Alexa Fang

Alexa is a pop-culture vulture. She lives to read, write and travel, and decided long ago that life is stranger than fiction. When she's having croissant, she thinks in French. "31 Rue Cambon" is her favourite address, and she believes that money one enjoyed spending is never money wasted.

Alexa is a pop-culture vulture. She lives to read, write and travel, and decided long ago that life is stranger than fiction. When she’s having croissant, she thinks in French. “31 Rue Cambon” is her favourite address, and she believes that money one enjoyed spending is never money wasted.


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

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