Personal Loan Rates: Compare Top Lenders in Singapore

Before you dive into comparing personal loans, it's crucial to assess your financial needs and goals. This involves:

• Determining loan amount and purpose: Clearly define how much you need to borrow and what you plan to use the funds for. This will help you narrow down your options and choose a loan that aligns with your requirements.

• Evaluating repayment capabilities: Assess your current financial situation, including your income, expenses, and existing debts. This will give you a realistic idea of how much you can afford to repay each month. 

When comparing personal loans, pay close attention to the following key factors:

• Interest rates and fees: Look for loans with competitive interest rates and minimal fees to minimise your overall borrowing costs. Understand how the Effective Interest Rate (EIR) works to get an accurate estimate of how much you’ll actually pay after interest is included.

• Loan tenure and flexibility: Choose a loan tenure that suits your repayment capabilities. Consider lenders that offer flexible repayment options, such as the ability to make early repayments or change your repayment schedule.

• Lender reputation and customer service: Opt for reputable lenders with a strong track record of customer satisfaction. Read reviews and compare customer service offerings to ensure you'll have support when you need it.

A personal loan in Singapore is an unsecured or secured loan that provides you with a lump sum of money that you can use for various purposes. Secured loans require you to pledge an asset as collateral, such as a car or property, while unsecured loans do not require any collateral.

They typically have fixed interest rates and monthly repayments, making it easier to budget and manage your finances. Specifically in Singapore, personal loans typically have the following characteristics:

Personal loans can be used for a wide range of purposes, including:

• Debt consolidation: Consolidate multiple high-interest debts into a single, lower-interest personal loan, making it easier to manage your repayments and potentially save on interest.

• Home renovations: Finance home improvement projects, such as kitchen upgrades or bathroom renovations, with a personal loan.

• Medical expenses: Cover unexpected medical bills or planned procedures with a personal loan.

• Education costs: Fund your own education or your child's education with a personal loan.

• Major purchases: Finance large purchases, such as a new car or a dream vacation, with a personal loan. You can even pay for and finance your wedding!

MORE: How to get a personal loan

You can obtain a personal loan in Singapore from several sources:

Most banks in Singapore such as DBS, OCBC, UOB, HSBC, and Standard Chartered, offer personal loans with varying terms and conditions. They offer competitive interest rates and established customer service, but they may also have stricter eligibility criteria. 

Our Picks: Best banks for personal loans.

Credit unions are member-owned financial institutions that offer personal loans to their members. Credit unions may offer lower interest rates and more personalised service than banks. Examples of credit unions in Singapore include NTUC Income and Singapore Police Co-operative Credit Union.

Online lenders such as Lending Club and SingFinance are becoming increasingly popular in Singapore, offering a convenient and fast way to access personal loans. Online lenders often have faster approval processes and more flexible eligibility criteria, but it's important to compare interest rates and fees carefully.

Our Picks: Best online personal loans 

Looking solely at the listed annual interest rate of a loan may only tell a limited story. An Effective Interest Rate (EIR) can provide a more complete picture of your loan's actual cost. 

EIR incorporates not just the interest rate, but also all the other fees and charges you'll be responsible for paying. It takes into account the impact of compounding and the timing of your repayments, providing a more accurate reflection of the total cost of borrowing. 

Because it includes all costs borne over time, EIR is a more reliable metric to compare the financial impact of a personal loan and help you make informed financial decisions.

Factors influencing interest rates

Your credit score, income, loan amount, loan tenure, and debt-to-income ratio (DTI) are some of the factors that can influence the interest rate you're offered. 

Credit score: A good credit score is essential. Lenders use your credit score as a snapshot of your creditworthiness. A higher score indicates a history of responsible borrowing and timely repayments, making you a less risky borrower. Factors that influence your credit score include your payment history, outstanding debt, credit history length, types of credit used, and recent credit applications. 

Income: Lenders also consider your income and employment status as indicators of your ability to repay the loan. A stable income and secure employment history demonstrate financial stability and reduce the perceived risk for lenders. Conversely, an unstable income or frequent job changes might result in higher interest rates. 

Loan amount: The amount you borrow can affect the interest rate. Larger loan amounts might carry lower rates than smaller ones.

Loan tenure: The length of your repayment period (loan tenure) can also influence the interest rate. Shorter tenures often have lower interest rates, but higher monthly payments. Longer tenures have lower monthly payments but accrue more interest over the life of the loan.

Debt-to-income ratio: Your DTI, the proportion of your monthly income that goes toward debt repayments, is another crucial factor. A lower DTI indicates that you have more disposable income available, making you a lower-risk borrower and potentially qualifying you for better rates. A high DTI, on the other hand, may lead to higher interest rates or even loan rejection.

Interest rates on personal loans in Singapore can vary significantly between lenders. In the current market, the average personal loan interest rates from major banks like DBS, OCBC, UOB, HSBC and Standard Chartered typically range from 1.99% to upwards of 3.80% depending on loan product, tenure and individual credit assessment. Standard Chartered boasts the lowest interest rate, starting from 1.90% while OCBC has the highest interest rate of 3.80%.

Here’s a breakdown on the prevailing annual personal loan percentage interest rates in Singapore:

MORE: Personal loan application guide

Maintaining a good credit score, having a stable income, and choosing a shorter loan tenure, and a low DTI can help you qualify for the best personal loan rates. A lower DTI demonstrates your ability to manage debt responsibly, making you a more attractive borrower to lenders. This can lead to more competitive interest rates. Similarly, a stable income and secure employment history signal financial stability, reducing the lender's risk and increasing your chances of securing a lower interest rate.

SingSaver’s personal loan calculator can help you estimate monthly repayment rates to better compare between your options.

EIR

The EIR is a crucial factor to compare as it represents the total cost of borrowing, including interest rates and fees. Look for loans with lower EIRs to minimise your borrowing costs.

Funding time

If you need funds urgently, consider the loan's funding time. Some lenders offer same-day or next-day disbursement, while others may take a few days to process your application. Find out more about how long it takes to get a personal loan in Singapore.

Payment flexibility

Check if the lender offers flexible repayment options, such as the ability to change your repayment date or make early repayments without penalties.

Monthly payment

Calculate your monthly repayments based on the loan amount, interest rate, and loan tenure. Ensure that the monthly repayments are affordable and fit within your budget.

Fees

Pay attention to any fees associated with the loan, such as processing fees, late payment fees, or early repayment fees. These fees can add to the overall cost of borrowing.

Loan amount and tenure

Ensure that the lender offers the loan amount you need and provides a suitable loan tenure that aligns with your repayment capabilities.

Eligibility criteria

Check the lender's eligibility criteria to ensure you meet their requirements before applying for a loan.

Customer reviews and ratings

Read customer reviews and ratings to get an idea of the lender's reputation and customer service.

Matching personal loans to your needs

Some lenders offer specialised loans for specific purposes, such as debt consolidation or financing your wedding. Consider these options if they align with your needs. 

For instance, DBS personal loan offers home renovation loans with competitive interest rates and flexible repayment options, allowing homeowners to finance renovations with fixed monthly payments. Their packages may include features like deferred payment options or preferential interest rates for eco-friendly renovations. HSBC also offers solutions to finance home improvements with features like personalised loan amounts and flexible tenures, often bundled with benefits for existing HSBC customers.

Additionally, if you have valuable assets to pledge as collateral, you may pre-qualify for a secured loan with a lower interest rate. However, if you don't have collateral or prefer not to risk your assets, an unsecured loan is a suitable choice.

Some steps you can take to identify which personal loan meets your needs:

• Seek professional advice: If you're unsure about which loan is right for you, consider seeking professional advice from a financial advisor.

• Utilise SingSaver's resources: At SingSaver, we provide comprehensive resources and tools to help you compare loans and make informed decisions when it comes to your personal loan applications. We are here to assist you in finding the best loan offers that match your specific requirements and financial goals.

Setting up a repayment plan

• Establishing a budget: When it comes to your loan repayments, creating a budget plan to pay it off is crucial to ensure you can comfortably afford them.

• Automating payments: Set up automatic payments to avoid missing any repayments, incurring late payment fees, or defaulting on your personal loan.

Avoiding common pitfalls

• Make your loan repayments on time: Avoid deferring loan payments to prevent late payment fees and negative impacts on your credit score.

• Monitoring your loan balance: Keep track of your loan balance and make extra repayments whenever possible to reduce your overall interest costs and pay off your loan faster.

MORE: When and how to refinance a personal loan

We consider various factors when evaluating personal loans, including:

• Interest rates (EIR)

• Fees and charges

• Loan amount and tenure

• Eligibility criteria

• Funding time

• Repayment flexibility

• Customer service and support

• Lender reputation and reliability

Importance of transparency and accuracy

We strive to provide transparent and accurate information about personal loans. Our ratings are based on objective data and analysis, and we clearly disclose our methodology to ensure you can trust our recommendations.

Continuous improvement

We are committed to continuously improving our personal loan ratings and methodology.

Updating ratings with market changes

We regularly update our ratings to reflect changes in the market, such as fluctuations in interest rates or new product offerings. This ensures that you always have access to the most up-to-date information.

Incorporating user feedback

We value your feedback and use it to improve our ratings and services. We encourage you to share your experiences with personal loans and lenders on SingSaver to help other users make informed decisions.