Personal Loans For Temporary Residents
Temporary residence doesn't cut off your access to finance. Find out what your options are.
Whether you’re planning on making your permanent residence here in Singapore or you’re just here to work for a few years, you still might find yourself in need of a personal loan. There are banks and lender who may consider you for a loan even if you aren’t a permanent resident. However, it’s important to know what loans you’re eligible for and how to find the right one for you before you submit your application.
How does a personal loan for a temporary resident work?
A personal loan is a product that allows you to purchase an asset or make an investment. You will then pay the lender back with interest over a set amount of time, usually within five to seven years. For a temporary resident, such as an individual on a work visa, extra criteria need to be met in order to qualify.
Most lenders will need the details of your visa before you are approved to ensure that the terms of the personal loan do not exceed the amount of time left on your visa. You may also need to meet higher minimum income criteria or show extra credentials. One advantage of applying for a loan in Singapore is that your overseas credit history is not a factor.
Personal loans temporary residents may be able to apply for
There are a number of banks and lenders in Singapore who consider applications for personal loans from people that have a temporary resident visa.
How you can compare your personal loan options
When comparing your options, be sure that you consider the following points:
- Interest rates. Interest rates can vary greatly between lenders. Make sure that you study this carefully and understand how much your monthly repayments will be, as well as how much over the loan amount you will be paying in interest. A personal loan calculator can help you determine these numbers.
- Fees. Compare the fees between various lenders. Some may charge for processing the application while others could have a monthly charge.
- Eligibility requirements. Not all temporary visas are widely accepted. Most banks will require at least a P1, P2 or Q type Singapore Employment Passes, and that you have a certain amount of time left on the visa. Investigate this thoroughly before filling out an application.
- Secured. In some instances, you can qualify for a secured personal loan. This is where an item of worth, such as a car, is used to guarantee the loan.
What are the benefits and drawbacks to consider?
- Overseas credit history is not a factor. Any bad credit you hold overseas is not a determining factor when applying for a personal loan in Singapore.
- Competitive rates. You can find competitive rates if you compare your options before applying.
- Flexibility. You can choose to pay the loan off over a term of between one and seven years, depending on what works best and when your visa ends.
- Higher rates. In comparison to a home loan or refinance, the rates for a personal loan are generally higher.
- Less choices. As not all personal loans are available to temporary residents, you have less to choose from.
- Documents that are required. As a temporary resident, you may have to show more documentation than a permanent Singapore resident or citizen. A copy of your passport and visa will be required, along with details of your work history in Singapore.
Is there anything to avoid?
- Applying for more than you need. Only apply for the amount of money you need to make your purchase or fund a trip. You want to make sure that you are not paying interest for something you could have paid for out of pocket.
- Making too many applications. Compare your options first and only apply with one that you find meets your individual needs and offers you the best rates. If you apply for too many in a short space of time, your credit history can be negatively impacted.
How can I make sure I’m approved?
There’s no way to make sure you’re approved for a personal loan, but a way to give yourself the best chance is to ensure you meet all of the minimum eligibility criteria. Minimum criteria for personal loans usually stipulates:
- Age. You’ll need to be over the age of 21.
- Visa. Check if any specific Visa types are excluded from the lender’s criteria, or if any other criteria are mentioned.
- Employment. You will generally need to be in permanent employment earning an income of S$45,000 p.a.
- Financials. You will need a Singapore bank account that is in good standing.