Best Loans for Bad Credit in Singapore

If your credit score isn’t where you’d like it to be, securing a loan in Singapore can feel challenging. Whether you’ve faced financial setbacks or missed a few payments, finding the right loan can seem daunting. But don’t worry — there are options available that cater specifically to those with bad credit.

Bad credit loans are designed for borrowers with low credit scores or thin credit histories, offering access to funds when traditional lenders may not approve your application. However, these loans for terrible credit often come with higher interest rates and stricter terms.

Some key considerations when exploring bad credit loans include comparing interest rates across different lenders, understanding your approval odds, carefully reviewing repayment terms, and meeting specific lender requirements.

If you’re thinking of applying for a personal loan with bad credit, consider applying for one with SingSaver’s cashback promotions to enjoy attractive rates.

Credible.sg

Why we chose this: Credible.sg acts as a bridge between borrowers and various vetted lenders in Singapore, offering a streamlined approach to finding suitable loan options, particularly for those who may have difficulty qualifying with traditional lenders. They highlight quick approvals and disbursement, making them a potential choice for borrowers with bad credit looking for personal loans to cover urgent financial needs.

Recommended loan uses:

• Emergency expenses

• Bridging loans while seeking larger financing

• Unexpected medical bills

• Time-sensitive personal expenses

Standard Chartered CashOne Personal Loan

Why we chose this: The Standard Chartered CashOne Personal Loan offers instant loan approval and disbursement, potentially within 15 minutes, directly to your designated bank account. Combined with competitive interest rates and attractive cashback rewards for longer tenures, it's a strong contender for borrowers needing quick access to funds.

Recommended loan uses:

• Emergency expenses requiring immediate funds.

• Time-sensitive investment opportunities.

• Urgent bill payments to avoid penalties.

• Capitalising on limited-time offers or deals.

• Bridging short-term cash flow gaps.

HSBC Personal Loan

Why we chose this: The HSBC Personal Loan offers a competitive interest rate starting at 2.92% p.a. (EIR 5.50% p.a.), making it an attractive option for consolidating debt. The availability of longer tenures, up to 7 years, also provides flexibility in managing repayment.

Recommended loan uses:

• Consolidating multiple high-interest debts (credit cards, other loans) into a single loan with a lower interest rate.

• Simplifying debt repayment with one fixed monthly payment.

• Potentially improving credit score by demonstrating responsible debt management through consistent, on-time payments.

• Reducing overall interest paid over the life of the consolidated debt.

UOB Personal Loan

Why we chose this: The UOB Personal Loan offers a range of repayment tenures, allowing borrowers to spread out their loan repayments over a longer period. This can be beneficial for managing larger loan amounts or for those seeking lower monthly payments.

Recommended loan uses:

• Financing larger purchases, such as home renovations or education expenses.

• Consolidating debt with the goal of lowering monthly payments.

• Managing unexpected expenses that require a longer repayment timeframe.

• Situations where a lower monthly payment is prioritised over a shorter overall loan term.

Citibank Quick Cash Personal Loan

Why we chose this: The Citibank Quick Cash Personal Loan offers a streamlined approach to accessing funds, leveraging your existing Citibank relationship. The personalised interest rates and flexible loan tenures allow borrowers to tailor the loan to their specific financial needs.

Recommended loan uses:

• Consolidating existing credit card debt.

• Funding specific personal projects or goals.

• Covering larger purchases or expenses.

• Managing unexpected life events or opportunities.

• Situations where a pre-existing credit line can be utilised for a structured loan.

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As the name suggests, personal loans for bad credit in Singapore are there to help people with poor credit scores, particularly those who can't get loans from regular banks because of their credit history.

What constitutes bad credit in Singapore?

The Credit Bureau Singapore (CBS) is the primary credit bureau in Singapore, and it provides the credit scoring system used by most financial institutions to assess an individual's creditworthiness and debt-to-income ratio.

By CBS, credit scores range from 1,000 to 2,000. A score under 1,723 is considered poor and poor credit is typically a result of late payments, not paying back debts, and using too much credit.

Bad credit loans in Singapore can be either secured or unsecured. Secured loans require collateral, such as a car or fixed deposit, which the lender can seize if the borrower defaults. This reduces the risk for the lender, making them more likely to approve the loan even with a low credit score.

Unsecured loans, on the other hand, do not require collateral and are based primarily on the borrower's creditworthiness and income. Due to the higher risk for the lender, unsecured loans for bad credit are generally harder to obtain and may come with higher interest rates.

Bad credit loan amounts in Singapore can vary, but they are generally smaller than loans offered to borrowers with good credit.

Typical loan amounts might range from a few hundred to several thousand dollars, depending on the lender and the individual's financial situation. Interest rates for loans for terrible credit are typically higher than those for borrowers with good credit, reflecting the increased risk for the lender.

Repayment terms for bad credit loans are generally shorter, ranging from a few months to a few years.

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Interest rates for bad credit loans in Singapore can range from 5% p.a. to 6.5% p.a. (EIR), this is considerably less than some countries such as the USA, where bad credit loans can have interest rates ranging from 20% to even 30%.

Fees associated with loans for bad credit in Singapore can impact the overall cost of borrowing. These include:

• Processing fees: Some lenders charge a one-time fee to process the loan application. This can be a fixed amount or a percentage of the loan. Some lenders advertise "no processing fees."

• Late payment fees: These are charged for missed payments. The amount varies and can be a fixed sum or a percentage of the overdue amount.

• Early repayment fees: Some lenders charge a fee for paying off the bad credit loan early. However, this is becoming less common, and several lenders now waive these fees.

• Other potential fees: These may include administrative fees, legal fees, or fees for specific services. Always ask for a full breakdown of potential fees.

Different lenders in Singapore have different criteria, and some specialise in providing loans for individuals with less-than-perfect credit. It's worth exploring various options and comparing offers. Consider using a loan comparison platform or pre-qualifying with multiple lenders to check your eligibility without impacting your credit score. This will give you a good starting point for finding a suitable loan.

To help you estimate your monthly repayments for a personal loan with bad credit in Singapore, you can use a personal loan calculator. These calculators are typically available on the websites of banks and financial institutions.

You can experiment with different loan amounts, interest rates, and repayment terms to see how they affect your monthly payments. Knowing this information ahead of time can help you better manage your personal loan payments.

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There are several types of loan options for those with bad credit scores in Singapore:

Secured loans (using assets as collateral)

These loans require you to pledge an asset, such as a car or property, as collateral. This reduces the risk for the lender, making them more likely to approve the loan even with a lower credit score

When to use: Consider a secured loan if you have valuable assets to use as collateral and need a larger loan amount or lower interest rate.

Unsecured personal loans

These loans don't require collateral, so approval is based on your creditworthiness and income. Unsecured loans for bad credit generally have higher interest rates and may be more difficult to obtain.

When to use: Consider an unsecured loan if you don't have collateral or prefer not to risk losing assets. Be prepared for a lower loan amount and potentially higher interest rates.

Payday loans

These are short-term, high-interest loans designed to be repaid on your next payday. They offer quick access to cash but come with extremely high costs. It's advisable to avoid payday loans unless it's a dire emergency and you fully understand the terms.

When to use: Avoid payday loans if possible due to their high costs. Consider them only as a last resort and ensure you can repay on time to avoid a debt cycle.

Installment loans

These loans provide a fixed amount of money upfront, which is repaid in fixed monthly instalments over a set period. They offer predictable repayment schedules, making budgeting easier.

When to use: Choose an installment loan if you need a fixed amount and prefer the predictability of fixed monthly payments.

Shop for other types of bad credit personal loans in Singapore:

• Best consolidation loans for bad credit

• Best home improvement loans for bad credit

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Pros:

• Fast approval and funding.

• Fixed, predictable repayments.

• Can improve credit score if repaid on time.

Cons:

• Higher interest rates than regular personal loans.

• Potential risk of default due to financial strain.

• Some lenders may have hidden fees or predatory practices.

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If you have a less-than-perfect credit history and are looking for a personal loan with bad credit in Singapore, there are several avenues you can explore:

• Online lenders: Several online lenders in Singapore cater specifically to borrowers with bad credit. These lenders may offer bad credit loans with more flexible eligibility criteria than traditional banks. They might consider factors beyond your credit score, such as your income stability and employment history.

• Licensed money lender: Licensed money lenders can be more flexible than traditional banks when it comes to giving personal loans to individuals with bad credit scores. They often offer smaller loan amounts and may have less stringent credit score requirements. However, it's crucial to ensure that the lender is reputable and licensed to operate legally.

• Non-bank financial institutions: These institutions, such as credit unions or online lenders, sometimes have more lenient criteria for borrowers with bad or even terrible credit scores. They might offer competitive rates and terms on personal loans, but it’s wise to compare offers and read reviews to find a trustworthy option.

• Banks and financial institutions: While banks generally have stricter lending criteria, some may offer bank personal loans with bad credit options or have more lenient policies for existing customers. It's worth checking with your current bank or exploring options from different banks to see if you qualify.

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Looking to apply for a loan while having terrible credit? Here’s a step-by-step guide on how to do so:

Before applying for a bad credit loan Singapore, you can perform a hard credit check by requesting for your credit score from the Credit Bureau Singapore (CBS). Knowing your score helps you understand where you stand and what kind of loan terms you might qualify for. A lower score might mean higher interest rates or stricter eligibility requirements.

Carefully review your monthly income and expenses to determine how much you can realistically afford to repay each month. Choose a loan amount and repayment tenure that aligns with your budget to avoid late payment fees and further damage to your credit score.

Different lenders have different criteria for bad credit loans. Check the minimum income requirements, employment history requirements, and any other eligibility criteria before applying. Some lenders may also have specific requirements for foreigners, such as a valid Employment Pass and a minimum length of residency in Singapore.

Many lenders offer a pre-qualification process that involves a soft credit check, which doesn't affect your credit score. This allows you to compare potential interest rates and loan terms from different lenders without any negative impact on your credit.

Once you've chosen a lender, gather the necessary documents, typical application requirements include:

• Proof of income (payslips, tax returns)

• Identification (NRIC for Singaporeans/PRs, passport for foreigners)

• Employment details (employment contract, employment pass for foreigners)

Submit your application online or in person, depending on the lender's requirements.

Once you've secured the loan for bad credit Singapore, incorporate the monthly repayment into your budget. Consider setting up automatic payments to avoid missing any deadlines and incurring late payment fees. This also helps build good credit habits for the future.

• Consider a secured loan: If you have assets to use as collateral, a secured loan might offer better chances of approval and potentially lower interest rates.

• Explore licensed moneylenders: Licensed moneylenders often have more flexible eligibility criteria for loans for bad credit.

• Improve your creditworthiness: Take steps to improve your credit score over time, such as paying bills on time, avoid defaulting on buy now pay later payments, and reducing existing debt.

• Seek financial advice: If you're struggling with debt or credit issues, consider seeking professional financial advice to explore alternative solutions and improve your financial situation.

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To expedite your bad credit personal loan application in Singapore, and increase your chances of approval, it's helpful to gather the necessary documents beforehand. While specific requirements may vary between lenders, here's a general checklist of what’s required:

• Proof of identity:

• Singaporeans/PRs: NRIC (front and back)

• Foreigners: Passport and valid work pass (e.g., Employment Pass, S Pass)

• Proof of income:

• Salaried employees: Latest computerised payslip or latest 6 months' CPF contribution history statement

• Self-employed individuals: Latest 2 years' Income Tax Notice of Assessment and latest 3 months' bank statements

• Commission-based earners: Latest 3 months' payslips or latest 6 months' CPF contribution history statement

• Proof of residence:

• Latest utility bill or tenancy agreement

• Other supporting documents:

• Latest Income Tax Notice of Assessment (for all applicants)

• Bank statements (for self-employed or commission-based earners)

• Educational certificates (for certain lenders)

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Comparing loans for bad credit in Singapore? Consider these factors:

• Effective Interest Rate (EIR): The EIR gives you a true picture of the total cost, including interest and fees. Compare EIRs from different lenders to find the most affordable bad credit loan.

• Legitimacy: Always ensure the lender is licensed by the Ministry of Law to avoid predatory practices. Check their website or the Ministry of Law website for verification.

• Monthly payments: Choose a loan with monthly repayments that fit comfortably within your budget. Consider the loan tenure and its impact on the monthly payment amount.

• Additional loan features: Look for extra loan features like flexible repayments or online account management. These can make it easier to manage your loan.

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When you're looking for a bad credit loan in Singapore, it's important to be wary of predatory lenders or scams. Learn how to spot a personal loan scam with these red flags:

• No credit check or guaranteed approval: Legitimate lenders in Singapore will always conduct a credit check to assess your creditworthiness. If a lender promises guaranteed approval without checking your credit history, it's a sign they may be operating illegally or engaging in predatory lending practices.

• Upfront fees or payment requests via gift cards: Licensed moneylenders in Singapore are allowed to charge fees, but these fees must be clearly disclosed and should be paid only after the loan agreement is signed. Be wary of lenders asking for upfront fees before approval or those requesting payment through unconventional methods like gift cards, as this is a common tactic used by scammers.

• Pressure to sign quickly or lack of transparency: Predatory lenders often pressure borrowers to sign loan agreements quickly without giving them sufficient time to read and understand the terms and conditions. If a lender is not transparent about their fees, interest rates, or repayment terms, or if they rush you into signing an agreement, it's a warning sign.

Verifying if a lender is licensed in Singapore:

To protect yourself from bad credit loan scams, always verify if the lender is licensed in Singapore. You can do this by:

• Checking the lender's website: Licensed moneylenders are required to display their license number on their website.

• Verifying with the Ministry of Law: You can search for licensed moneylenders on the Ministry of Law's website using their name or license number.

• Looking for the official licensed moneylender logo: Licensed moneylenders are required to display the official logo on their website and marketing materials.

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Looking for alternatives to get loans with bad credit? Here are some of the options worth considering:

Licensed money lenders can be more flexible than traditional banks when it comes to giving personal loans to individuals with bad credit scores. They often offer smaller loan amounts and may have less stringent credit score requirements. However, it's crucial to ensure that the lender is reputable and licensed to operate legally.

These institutions, such as credit unions or online lenders, sometimes have more lenient criteria for borrowers with bad or even terrible credit scores. They might offer competitive rates and terms on personal loans, but it’s wise to compare offers and read reviews to find a trustworthy option.

Some banks may consider applications for smaller loan amounts, even if your credit score is bad. These loans are typically easier to qualify for and can help rebuild credit if managed responsibly. After applying, don’t forget to check your personal loan application status.

If you're a homeowner, a home equity loan can be an alternative to a personal loan, even with bad credit. This type of loan allows you to borrow against the equity you've built up in your property. Because your home acts as collateral, lenders may be more willing to approve a home equity loan even if your credit score isn't perfect. However, it's essential to remember that you risk losing your home if you fail to repay the loan.

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Credible: Best for fast approval

CIMB: Best for flexible repayment

Standard Chartered: Best for instant cash disbursement

HSBC: Best for debt consolidation

UOB: Best for long repayment tenure

Citibank: Best for personalised loan options