Best Personal Loans in Singapore (2020)

A personal loan is a loan you can take from a bank which you repay through fixed monthly instalments. Unlike loans such as home loans or renovation loans, you can take a personal loan for any purpose, without a collateral required. Collaterals could be items like your car or home, which banks can repossess in the event you default on your loan. Personal loan interest rates range from 3.5% p.a. to 10.8% p.a. and most banks offer loans with a tenure of 12 to 84 months, with a minimum loan amount of $1,000.

A borrower can apply for an instalment loan online by filling out an application with a bank. The banks will then assess your credit history and decide on the downpayment, the term of loan, payment schedule, and repayment amounts. Typically, borrowers will have to pay other fees such as processing fees on top of interest charges. You can save on interest charges by making timely repayments or by paying off the loan early. However, some loans may have an early repayment or cancellation penalty.

A personal loan can help you clear your debts and have more manageable repayments at lower interest rates. The personal loan can have a positive effect on your ability to manage debt responsibly, as long as you make repayments on time and pay off the full amount required during the term of the loan. This could then help to improve your credit score.

Personal instalment loans can come in handy to help pay for needs that other loan types cannot cover. These include paying for weddings, renovations, travel, and medical costs not covered by insurance. A personal loan offers interest rates between 3.5% p.a. to 10.8% p.a. These rates can go even lower when banks offer promotional interest rates. You can also read this article on why and when you should use personal loan.

Firstly, can your needs be financed with another loan type? For example, education loans, home loans, and renovation loans could be more appropriate for those specific purposes, especially if the interest rate offered is lower than that of personal loans. Secondly, you should ensure that you will be able to pay off the loan during the loan period, taking into account the Effective Interest Rate (EIR), rather than the advertised interest rate, based on your loan tenure. This will help you to ensure that you can keep up with your monthly repayments to avoid any late fees or additional interest charges.

Banks look at a variety of factors when deciding on your loan amount. These include your your income level, credit score, your Total Debt Servicing Ratio (TDSR), your existing credit facilities, and more.

The average approval time can be about 3 working days, with loan disbursement taking 5 to 7 working days. Some banks such as Standard Chartered are offering instant loan approval and disbursement for customers who apply through MyInfo.

Yes, as long as you fulfil the eligibility criteria. These requirements can vary from bank to bank, but generally, personal loan applications for foreigners require you to:

• Hold a valid Singapore employment pass
• Have a residential tenancy agreement (or any other proof of your residential address in Singapore)
• Produce a bank statement (reflecting account activities for the past 6 months)
• Meet the minimum annual income requirement for foreigners (usually $40,000 to $45,000 p.a.)

If you don't qualify for a personal loan (an unsecured loan) or if you want a lower interest rate, some lenders offer secured loans. Secured loans are backed by collateral, such as a savings account or cash deposit. Should you be unable to make your payments, your lender usually has the right to claim your asset as payment for the loan. While most banks set the minimum annual income S$30,000 to be eligible for a personal loan, there are other options for those earning less than S$30,000 per annum. For example, Credit Culture provides an unsecured loan amount of up to $3,000 for those with an annual income less than S$20,000.

Advertised Interest Rate: The advertised rate, or nominal interest rate, is used when calculating the interest charge on your loan. For example, if you are considering a loan for $200,000 with a 6% interest rate, your annual interest charges will come up to $12,000 per year, or a monthly payment of $1,000.

Effective Interest Rate (EIR): The EIR reflects the true cost of borrowing to the consumer. This interest rate is usually higher than the advertised rate because it includes service fees, annual fees or one-time processing fees for processing and approving your loan application.

0% Interest Personal Loans: Some banks offer 0% interest rate personal loans for short-term loans. However, these tend to come with higher processing fees. This means that you will still be paying the bank for the loan, with the main difference being that the bank collects your money upfront rather than through interest payments in the future.

The main benefit of a personal loan is the low interest rates being offered by banks, relative to other debts such as credit card interest rates of around 28% or loans offered by unlicensed moneylenders. If you take advantage of promotional offers, you can get a personal loan with interest rates as low as 3.5% p.a.. Administrative charges such as one-time processing fees or annual fees can also be waived during promotional periods.

Many banks also offer instant and digital loan approval, which means quick cash for you, as well as less documentation needed if you use MyInfo. Personal loan tenures also range between 12 to 84 months, giving you a longer time frame to pay off your loan.

You have to be at least 21 years old to apply for a loan and the maximum age can go up to 65 years old. A minimum annual income of $30,000 is required to apply for a personal loan. You will also need to produce documents during your application, such as your NRIC and the latest 3 months computerised payslips. Foreigners in Singapore are also eligible to apply for a personal loan, depending on your salary and employment permit/pass type.

The minimum salary to get a personal loan in Singapore is usually an annual income of $30,000. If your annual income exceeds $120,000, you can borrow up to 8x your monthly salary, or a maximum of $200,000. Foreigners residing in Singapore will need a minimum annual income of $40,000 to $45,000 to apply for a personal loan.

This depends on the salary that you earn, as your borrowing amount is typically a multiple of your monthly salary. A common limit to the loan amount you can borrow is 4x your monthly salary. Some banks also set a maximum amount that can be borrowed, such as a limit of $200,000 regardless of how much you earn.

The current personal loan interest rate ranges from 3.5% to 10.8% per annum. The interest rate varies across banks and depends on factors such as the loan tenure.

Besides the processing fee that is charged, other fees involved when taking up a personal loan include:

• Late payment fee: Charged if you miss your monthly repayment.
• Early repayment fee or cancellation/termination fee: If you choose to repay your loan early, or cancel your loan.
• Change of tenor: Fee incurred if you change your loan tenure.
• Annual fee: To be paid every year (this fee could differ from the first year and subsequent years).

Factors to consider when choosing a personal loan include:

• Annual interest rate: How much will you have to pay in interest for the year?
• Loan Tenure: How long is the loan period? Some banks offer shorter loan tenures, while others, such as HSBC, offer loan tenures of up to 7 years.
• Processing fee: This could range from $0 to $500. Some banks charge higher processing fees when they offer low (or 0%) interest rates. Other banks offer to waive the processing fee altogether.
• Early repayment or cancellation fee: Some banks charge a fee for early repayment or cancellation of the loan.
• Ongoing promotions: Look out for the latest promotions for personal loans. This could come in the form of enjoying cashback, lower interest rates, lower processing fees, instant approval, gifts and other perks.

A personal instalment loan is a disbursement of a lump sum from the bank to you. You then pay off the principal and interest over a fixed period (also known as the tenure of the loan). A personal line of credit is when the bank gives you access to a fund that you can draw on, whenever needed. You typically pay an annual fee for having access to this fund, and only pay interest on the amount that you borrow.

The best personal instalment loan can vary depending on a few factors including: loan amount, loan tenure, your income level, interest rate, processing fee, promotions and more. Different individuals could also have different preferences when it comes to personal loans. For example, some might prefer a personal loan with a 0% interest rate but higher processing fee but others might prefer a low interest rate personal loan with no processing fee charged. Use the SingSaver platform table to find the personal loan that suits your needs.

On the SingSaver website, you can start by comparing personal loans. You can then sort the personal loans based on annual interest rate, processing fees or monthly repayment to find the personal loan that suits your requirements. By clicking apply now, you will be prompted to fill in an application form from the bank. The bank will then follow up with the next steps for the personal loan application.