Loans for 21-year-olds

You can still get a personal loan even if you’ve just turned 21.

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If you’ve just turned 21, you may be interested in getting a loan. However, finding credit may be more challenging than simply applying and getting approval. Although you may have little to no credit history and scarce savings, there are financing options available to you. Read our guide to find out your loan options.

Compare loans for 21-year-olds

Name Product Interest Rate From Effective Interest Rate Minimum Loan Amount Maximum Loan Amount Loan Tenure
HSBC Personal Loan
3.7%
7%
S$5,000
S$200,000
Up to 7 years
Get S$108 cashback plus an S$88 processing fee waiver if you apply by 30 April 2020. T&Cs apply.
Standard Chartered CashOne Personal Loan
3.88%
7.67%
S$1,000
Up to 4x fixed monthly salary, subject to a cap of S$250,000.
1 - 5 years
Take advantage of 50% cashback on your first month’s loan instalment, resulting in a S$199 refund on your loan account. Offer ends 30 June 2020.
Citi Quick Cash Loan
4.55%
8.5%
S$1,000
S$100,000
Up to 5 years
Get cash starting at 4.55% p.a. (EIR 8.5% p.a.) on a 36-month loan tenure. The interest you pay will vary depending on factors such as your credit score.
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Types of loans for 21-year-olds

If you’re 21-years-old, you may be eligible for the following loan types:

  • A loan from your current bank. One of the problems 21-year-olds encounter when trying to be approved for loans is that they have limited or no credit history. One way to get around this is to apply with your current bank. You’re likely to have a long history with your bank with transaction accounts and any other products you’ve held, so they may be more willing to give you a loan.
  • Unsecured loans for lower amounts. If your bank doesn’t have a loan you want to apply for, you can consider personal loans for lower amounts. The standard minimum amount for loans is usually around S$5,000, but you can find some lenders offering S$3,000 or even as low as S$1,000. Compare your options and only apply for as much as you need.
  • Secured car loans. If you want to buy a car, secured loans are less risky for lenders because they will be able to recoup their losses if you default. New and used car loans are available and you can get a lower rate than with an unsecured loan.
  • Getting a guarantor. If you that find you are ineligible for a bank loan, you may consider asking your parents, another relative or even an older close friend be your guarantor. This person will be taking on a large responsibility as they are agreeing to take on the loan payments if you can no longer make them. You can compare loans that accept guarantors on this page and joint application personal loans here.

How to compare loans

When you’re choosing a loan, consider the following factors:

  • The interest rate the loan comes with. Check whether the interest rate is fixed or variable and how competitive it is compared to other similar products.
  • How much you’re able to borrow. Lenders offer varying minimum and maximum loan amounts, but what you’re offered ultimately depends on what you can afford to repay. This is determined by the criteria set by the lender.
  • The features on offer. Have a look at the different features on offer, which you can find out more about by reading the reviews on finder Singapore. It’s important to familiarise yourself with the value-adding features of a loan. These can include the ability to make extra repayments, an offset facility or extended warranty on a car loan.
  • The fees you will be charged. There are different types of fees you can be charged, ranging from establishment fees to monthly fees and early repayment fees. Find out what charges are associated with your loan before signing on the dotted line.

Tips for loan approval

  • Show that you have savings. If you can show the lender that you’re good at saving, it may be more willing to approve you. A steady savings history will work best with your current bank as they can view your account information when you apply.
  • Offer a deposit. Having a deposit when you apply for a car loan shows you’re in a good financial position. The larger the deposit, the less you need to borrow, and the more likely an approval may be.
  • Get a letter from your employer. If you’re only employed casually or have not been employed for long, a letter from your employer stating the security of your employment may help your application.
  • Apply for a lower amount. Applying for too much when you have little or no credit history or don’t earn a high income can be a red flag to lenders and result in an automatic rejection, instead of an offer for a lower amount.
  • Apply for a secured loan. Secured loans, such as car loans, are less risky for banks because they will be able to recoup their losses.

Pros and cons of applying for your first loan

  • Get access to funds. This is an obvious ‘pro’. Get access to the funds you want to make the purchase or investment you need.
  • Build up your credit history. Acquiring a loan allows you to establish and build your credit history. This ultimately affects your eligibility for other types of loans and access to better interest rates as well.
  • Limited loan amounts. If you have no or limited credit history, you may only be eligible for a small loan, which may not be enough for what you need.
  • Risk of getting into debt. Taking on any loan comes with risk, so make sure to budget your repayments and don’t apply for a higher loan amount than you can afford.

Frequently asked questions about loans

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