Compare Personal Loans in Singapore

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How do personal loans work?

A personal loan lets you borrow a fixed amount of money for a set time period, typically at a fixed rate of interest. This type of loan is a secured or unsecured line of credit of up to S$250,000 over one to seven years. You can use the money for a range of purposes, such as consolidating debt, paying for a wedding or even taking a holiday.

Personal loans are an agreement between you and a lender for you to have a certain amount of money and pay it back over time, plus interest. A personal loan can be a more affordable way to borrow money than a credit card, if you’re looking to borrow a lump sum over an agreed timeframe.

Here is how personal loans work:

Application and approval.You can apply for a personal loan from a bank, credit union or standalone lender online, over the phone or in-branch, depending on what application types the lender offers. The time it takes to be approved depends on the lender, but it can range from anywhere between 60 seconds to a week or two.

Loan contract. When you are approved for a loan, you will need to agree to a loan contract that sets out certain terms. These terms include how long you’ll have to repay the loan, what fees you’ll need to cover, and the rate of interest you’ll be charged on your loan amount.

Loan terms. Your loan terms will be set out in your loan contract. Loan terms generally range between one and seven years.

Loan costs. Lenders agree to lend you money in exchange for interest, which is usually at a fixed rate in Singapore. Other loan costs may include establishment fees, monthly fees and annual fees. You should also check if you will be charged fees for repaying your loan early or making additional repayments.

Loan types.There is a wide variety of personal loans available in the market, each with varying terms and features. For instance, when you apply for a car loan the lender usually requires that the entire loan amount is used for the car purchase and the car to be used as security in case you default on the loan. An unsecured personal loan, on the other hand, is more flexible and you won’t have to use an asset to secure the loan.

The types of personal loans that are available to you

There is a wide range of personal loans available in Singapore to those who have stellar credit, average credit or bad credit. Find out what loan may work for you with the below options.

• Secured personal loans. This type of loan works by you offering an asset as security in exchange for lower rates and fees. Usually, this loan is used to purchase a car, but other types of assets can be used as well.
• Unsecured personal loans. If you don’t want to put up an asset as security or want to finance other endeavours unsuited to a secured personal loan, you might want to consider a loan that doesn’t require a guarantee. Note that the loans shown in the table above are all unsecured.
• Line of credit. You’ll get access to a set credit limit, but only pay interest on the funds you’ve used. You can consolidate debts or even fund a range of purchases with this type of loan.
• Debt consolidation loan. Existing debt can be managed by taking out a debt consolidation loan. Consolidate separate loan accounts into one easy-to-manage loan with a potentially lower rate and with fewer fees.
• Overdrafts. An overdraft is a lot like an unsecured loan, but it is generally attached to your everyday bank account. You are given a set amount that you can withdraw from your account, once your own funds have been exhausted.
• Bad credit loans. If you have bad credit but are in need of a loan, there are still options available to you. Either apply with a lender who doesn’t perform a credit check, or who accepts applicants with negative listings on their file.

Features of personal loans: What makes a loan competitive?

When comparing your personal loan options, it’s helpful to keep in mind the range of features that are available with these loans. When comparing, here are some of the questions you’ll need to ask.

• Does the loan have a competitive interest rate? Compare rates across similar loan products to ensure you’re getting the best deal.
• What are the fees and charges? You’ll need to consider both ongoing fees and fees charged at the onset of the loan. Common fees include an application fee or loan set-up fee, while monthly fees and annual fees are common ongoing fees. If you miss a payment for any reason, you can expect to be charged a late payment fee. You may also be charged to use additional features of the loan.
• Is there repayment flexibility? How often are you able to make repayments? Are you able to make additional repayments or pay off the loan early without penalty?
• Do the loan terms match your needs? Personal loans are usually offered for terms of between one and seven years, with other loans on offer for shorter periods. Some lenders are more restrictive than others when it comes to how long you have to repay your loan – for instance, only offering terms of one, three or five years. Make sure the loan terms on offer are what you need. Long-term loans over seven years often see lower repayments but a greater amount of interest paid.

Interest rates and fees to expect on personal loans

The interest rate and fees you are charged depend on the loan you apply with (you can compare these on the table above), but each loan type comes with similar costs, and understanding these can help you compare personal loan options.

The interest rate

Your interest rate will typically be fixed. At the time of writing, the average EIR is 12.6% p.a. It’s important to keep in mind interest rates can fluctuate from 8% p.a up to 30% p.a. (or more depending on your credit score).

The fees

There are three types of fees you should expect: Upfront fees (establishment and application fees), ongoing fees (monthly, annual or direct debit fees) and fees that are charged if you default on the loan or miss a repayment. Do note that the lender might not necessarily charge you all these fees, so make sure to check with them before applying.

Monthly repayments

To get an estimate of your borrowing power, input your loan amounts into a personal loan calculator on the lender’s website to see what the monthly repayments will approximately be.

How can I improve my chances of the loan being approved?

There is no way to guarantee your approval for a personal loan, but giving yourself the best chance at being approved starts with meeting the eligibility criteria set by the lender. To further your chances of being approved, keep the following in mind:

• Establish your borrowing capacity. What repayments can you afford? Lenders will use a variety of criteria to decide how much you’re eligible to borrow, but you need to know how much you can afford to repay.
• Building good banking history. Keep your account in good standing to build a positive relationship with your bank, even if you don’t plan on borrowing from them.
• Keep your credit rating in good standing. Make sure you keep track of all your payments, from credit cards to utility bills, because any arrears, debts, or missed payments will affect your ability to access credit.
• Keep track of your saving goals. If you manage to contribute to your savings regularly, it shows lenders that you are likely to manage ongoing loan repayments.

Am I eligible for a loan?

Eligibility for personal loans depends on a few different things:

• If you have a low income. Applicants with low incomes or who work part-time can still be approved for personal loans. It’s always a good idea to check the borrowing requirements and check your repayments with a loan calculator.
• If you have bad credit. You’re still able to apply for certain personal loans if you have negative marks on your credit file. Bad credit loans are still possible. You might end up paying a higher interest rate on these loans, so it’s important to compare a range of offers before applying.
• If you have an existing credit card or personal loan debt. You may still be approved for a new personal loan but if this is the case, but you should calculate your repayments and your debt levels before proceeding.
• If you don’t meet the minimum requirements. You still might be able to apply with a guarantor. This is where someone, usually a family member such as a parent, agrees to ‘guarantee’ your personal loan should you fail to meet your obligations.

How to apply for a personal loan

Required documents

Each bank and institution have their own criteria that you’ll have to meet when submitting a loan application.

• Proof of identification

  You will usually need any of the following to prove your identity:

  • Driver’s licence or I/C for Singaporean and Permanent Resident
  • S or E Pass and passport for a foreigner
  • Latest utility bill displaying your address

• Proof of income

  You will need to verify your income, with the actual verification required differing between lenders. Common requirements are as follows:

  • Latest three months payslips + Latest income tax notice of assessment
  • Bank statements
  • Letter of employment
  • For self-employed: Copy of latest income tax notice of assessment (must be in business for a minimum of 2 years)

• Other documents

  You may also need any of the following documents:

  • Statements from other loan accounts/credit cards

The questions we’ve been asked about personal loans

• How quickly can I get the money from my personal loan?

  Different lenders can have your loan amount transferred to you within different amounts of time. Some banks are able to offer existing customers same-day personal loans, and some payday lenders can have loan amounts transferred to new customers within an hour of approval:

  Loan name	Funds disbursement
  Standard Chartered CashOne	~15 minutes
  HSBC Personal Line of Credit	~5 business days
  POSB Personal Loan	Instant
  OCBC ExtraCash Loan	Instant
  UOB Personal Loan	Instant
  Citibank QuickCash (For existing customers)	~15 minutes
  HL Bank Personal Loan	~ 7 to 14 business days

  If you are in need of urgent cash, it is advisable to check how long it will take to receive your loan amount before you apply.

• I'm having trouble repaying my loan – what do I do?

  If you are having trouble repaying your loan, you’ll need to get in contact with your lender. They may be able to organise a payment plan with you or offer an alternative option to help you manage your repayments. You also have the option of getting in touch with Credit Counselling Singapore (CCS), a non-profit that helps people deal with their debts.

• What's the best personal loan?

  Unfortunately, there’s no easy answer to this question. The best loan for you will depend on what you need and also what loans you’re eligible for. You can use the comparison service available on Finder Singapore to compare similar loans and select the most competitive loan option that offers the features you want. If you are eligible, then you may apply.

  Best personal loans in 2023

• Do I have to tell the lender what I'm using the money for?

  The answer to this question depends on what type of loan you are getting. If you are getting a secured car loan then all details of the car and finance agreement and registration must be provided to the bank or lender before you receive the money. However, if you are getting an unsecured personal loan, then you only need to give a general idea of the loan purpose to the bank. If you are consolidating debts then you’ll have to give details of your other loans and credits to the institution.

• How much do you have to earn to get a personal loan?

  Most lenders will have a minimum income that you need to earn to be eligible, but others will only require that you are employed or have the means to repay the loan. Minimum incomes can range from S$20,000 p.a. to S$30,000 p.a. but there are low income personal loans available.

• Will my credit score affect my personal loan interest rate?

  Some lenders offer different interest rates to different borrowers depending on how risky they are to lend to. This is what’s called “risk-based pricing”. Lenders that use risk-based pricing may use your credit score as an indicator of how risky you are to lend to.