When you’re shopping for a personal instalment loan, the annual interest rate is one of the most important things to consider. This determines the fixed monthly repayment amount you have to be able to afford for the duration of the loan.
The average flat interest rate in the market today is around 6% p.a. The actual rate offered by the bank can vary by loan amount, loan tenure, annual income, existing or new bank relationship and creditworthiness. This is important to remember, and this is also why personal loan interest rates differ for person to person, from bank to bank.
The current lowest market rate available is 3.7% p.a offered by HSBC Personal Loan for borrowers with annual income of at least S$80,000.
For borrowers with annual income less than S$80,000, the lowest market rate available is 3.88% p.a., currently offered by Standard Chartered CashOne and POSB Personal Loan. While the Standard Chartered CashOne Loan rate is guaranteed upon approval, the POSB Personal Loan rate depends on the borrower’s credit history.
Below are examples of how much you can save in interest and fees payments by picking the loan offer with the lowest flat interest rate.
|S$10,000 LOAN OVER 24 MONTHS, ANNUAL INCOME S$30,000 – S$80,000|
|Bank||Annual Flat Interest Rate||Effective Interest Rate (EIR)||Processing / Annual Fee||Interest charged||Total loan amount to repay (incl. interest)||Monthly repayment|
|OCBC*||0% p.a.||9.5% p.a.||S$90
(9% one-time processing fee)
|Standard Chartered Bank*||3.88% p.a.||8.27% p.a.||S$199 annual fee
(waived for the 1st year)
|POSB**||3.88% p.a.||8.2% p.a.||S$0||S$779||S$10,776||S$449|
|CIMB||4.5% p.a.||8.41% p.a.||S$0||S$900||S$10,900||S$454.17|
|Citibank (new customers)||4.82% p.a.||9.0% p.a.||S$0||S$964||S$10,964||S$456.83|
|Citibank (existing customers)||5.39% p.a.||10.50% p.a.||S$0||S$1,130||S$11,130||S$463.75|
|Maybank||6.38% p.a.||13.58% p.a.||$200
(2% processing fee)
|BOC||6.48% p.a.||15.74% p.a.||S$300
(3% processing fee)
|HSBC||7.1% p.a.||13.0% p.a.||S$88
(waived with S$88 cashback and $30 cash upon approval*)
|UOB||8% p.a.||14.68% p.a.||S$0||S$1,600||S$11,600||S$966.67|
*Exclusive rate only available on the SingSaver platform, not at the bank
**Estimated rate – actual rate varies depending on bank’s approval based on your credit profile
If you’re looking for a S$10,000 loan to be repaid over 24 months, and earn between S$30,000 and S$80,000 then the OCBC Personal Loan is the best option for you. It comes with a SingSaver-exclusive 0% flat interest rate (which means you pay no interest over the 24 months) and has the lowest monthly repayment of S$416.67.
But take note of any special charges like annual fees or one-time processing fees. In this case, the OCBC Personal Loan comes with a one-time processing fee of 9% of the total loan amount (S$900), so be sure to factor that into your overall calculation.
Compare and apply for the best personal loans on SingSaver
It’s important to compare personal loan interest rates because it can shave thousands of dollars in interest paid over the loan tenure. Read our guide into the best personal loans in Singapore. Remember not to take the first personal loan you come across. Compare and study the market for the best personal loan based on your loan amount, loan tenure, credit history and annual income.
What to read next:
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By Rohith Murthy
Rohith leads SingSaver, a financial comparison site aimed at helping consumers in Singapore save money and time by finding the right financial products.