The best personal loan is the one that meets your needs and circumstances. While one person might need a personal loan to buy a car, another might want to borrow to fund home renovation or consolidating debt. With a large number of options available, how should you try to find the best personal loan in Singapore for you? This guide will take you through what you need to know.
We’ve chosen the loans on this page based on the providers available through Finder. These loans are not representative of the entire market. No single loan will be the best choice for everyone, so compare your options before picking your new deal.
Existing customers of POSB or DBS could take advantage of a very quick approval process. Everything is done online. You can receive instant approval upon meeting the requirements.
3 steps to finding the best personal loan in Singapore for you
What do you need? Decide why you’re taking out the loan and what you need from it. For example, you might need the loan to buy furniture as well as a car and you want to be able to make additional repayments.
What personal loan types are available? Compare the types of loan you want to apply for. Personal loans can be secured or unsecured, and can be taken out in the form of a line of credit or an overdraft facility. Compare different loan types according to their features and find one that offers you everything you need. Then, check the eligibility criteria to make sure you can apply for it.
What does my loan cost? You need to find a loan you can afford. Look for upfront and ongoing fees and see how flexible the repayments are. Make sure the ongoing repayments will be manageable on your budget.
How to compare personal loans
When you want to apply for a personal loan, you should first compare multiple offerings so you can track down the right product. Ask yourself:
Do I want a secured or unsecured loan? If you get a secured personal loan, you stand to lose the asset you’ve used as a guarantee in the event you miss repayments. An unsecured personal loan, on the other hand, offers no such risk – if it turns out that you can’t meet your repayments, a lender can’t repossess your car or home. Unsecured loans typically attract a higher interest rate.
What are the advertised interest and effective interest rate (EIR)? Make sure you compare the Effective Interest Rate (EIR) before signing up to a personal loan. The EIR takes into account the actual interest rate you pay, plus, any other fees or charges involved in the loan. This gives you a more complete picture of the full cost of your loan. The advertised interest rate, on the other hand, won’t show you the ‘true’ interest rate of the personal loan.
What are the fees and charges of my loan? Some personal loans attract prepayment penalties, late charges that vary from loan to loan, and some even require you to pay application fees. Comparing these extra costs as they are important when you’re trying to determine the true cost of the loan.
What will the term of my loan be? While a lower interest rate might seem promising at first, you should also compare loan terms. Personal loan terms vary depending on the type you take out and the provider you choose, but it could be anywhere from one to 10 years. The shorter the loan’s duration, the less you pay in the form of interest over the lifetime of the loan.
Pros and cons of personal loans
Online applications are easy and can offer quick turnaround The application process is quick and the majority of lenders allow you to complete the whole process online. Some lenders, including major banks, offer same-day turnaround for personal loans.
Range of personal loans available You can choose from secured and unsecured personal loans as well as lines of credit, car loans and even peer-to-peer loans.
You can get access to a competitive interest rate If you compare the interest rates between personal loans and credit card, you’ll see why some people prefer personal loans over credit cards.
You may not be approved As some personal loans do not require any form of security, you can expect strict eligibility criteria. If you don’t have a good credit rating, your chances of approval are slim.
The loan purpose might be restrictive Depending on the type of personal loan you choose, you may be restricted as to how you can use it.
What to keep in mind when looking for the best personal loan?
While personal loans are helpful in many scenarios, it’s in your best interest to avoid certain traps and pitfalls.
Read the fine print. Scrutinise all your options carefully right from the start and remember to look for ongoing account-keeping fees, early repayment fees and late payment fees. Read the terms and conditions document from start to finish.
Check if the lender is licenced. There are some credit brokers and providers in Singapore that operate illegally. If you wish to safeguard your interests, it is best that you do your research to avoid borrowing from these lenders.
Don’t take on a loan you can’t afford. When borrowing money, it’s important to understand exactly what your repayments will be and for how long you will need to commit to re-paying the loan. If you can’t comfortably afford a loan, don’t be tempted to consider this type of borrowing.
How to apply for a personal loan
You can use Finder Singapore to compare personal loan rates, fees, charges and term periods of different personal loans. Once you find a loan you wish to apply for, proceed to the lender’s website by clicking Go to site.
Remember that lenders will want to ensure your ability to repay a loan before they lend you any money. As a result, they might want to take a look at your credit file and may also ask for copies of your payslips, details of other loans you have, credit card bills and bank account statements.
DBS Personal Loan
DBS Personal Loan
Borrow from S$500
Repayment flexibility, subject to lending criteria
*The products compared here are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order for the products we list on our site, so we enable you to re-order and compare products. The initial display order is influenced by a range of factors including commercial partnerships, product costs and conversion rates, so please don’t interpret the listing order as an endorsement or recommendation from us. We’re happy to provide you with the tools you need to make better decisions, and we encourage you to make your own decisions and compare and assess products based on your own needs, preferences, and circumstances.
Frequently asked questions
That’s up to you to decide. You can use a personal loan to cover almost any large expense or even to consolidate your debt. A loan can help you reach your next goal, whether it’s buying your dream car or boat, taking care of financial obligations like bills, or funding your next big purchase.
The Effective Interest Rate (EIR) offers a more complete picture of the total cost of your loan. It’s the loan’s rate of interest, plus any other fees charged. Also, EIR takes into account your repayment schedule and considers how much of your monthly repayment goes to paying off the money you borrowed, and how much goes to paying off interest.
The interest rate is more simplistic and doesn’t take into consideration how much fees – such as a processing fee – impact your repayments. That’s why you’ll see it expressed as a lower percentage than the EIR.
Late payment fees, insufficient funds fees and early repayment penalties are just some of the charges you could face. It’s really important to read the terms and conditions of any loan you are considering, so that you understand both the overall cost of your loan and all fees and charges.
Do you care the most about rates? Monthly repayments? Overall loan cost? Consider what matters the most to you and start comparing lenders based on that feature.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over five years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at the IT Journalism Awards. Elizabeth has found writing about innovations in financial services to be her passion (which has surprised no one more than herself).
Citi Quick Cash Loan ReviewIf you’re looking for a loan to meet any type of expenses, Citi Quick Cash Loan could be an option to consider. Existing Citibank customers with a Citi Credit Card or a Citibank Ready Credit can apply to convert their unused credit limit to cash in their Citi Deposit Account. This needs to be paid back in monthly instalments, along with your regular credit card payments.
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