Top Personal Loan Providers in Singapore

What are personal loans?

Personal loans are unsecured loans that allow you to borrow money to use for whatever you want. Unlike a secured loan, you do not have to put up any collateral or pledge an asset such as your house when taking out a personal loan.

Given that personal loans are not tied to any of your assets, the interest rate on this type of loan tends to be higher. After all, there is nothing for the bank or moneylender to seize if you are unable to pay back on your loan.

How much can I borrow with a personal loan?

The amount of money you can borrow with a personal loan ranges anywhere between 2-6 times of your monthly salary. 

Currently in Singapore, there is a cap on the amount of unsecured loans you can have, which is at 12 times of your monthly salary. This includes personal loans, credit card loans, and education loans.

The loan amount that you are eligible for typically depends on your credit history, income stream as well as other existing credit facilities that you may have. Some banks or licensed moneylenders also look at your citizenship and age. Most banks will require the borrower to be of a minimum age of 21 before they can take out a personal loan.

What are the types of personal loans available?

There are several types of loans in Singapore that can be classified under the broad category of personal loan.

Personal term loan

Under a personal term loan, you are allowed to borrow a specific sum of money from a bank or license moneylender. You will then need to pay back an agreed amount, which is your loan repayment amount together with interest, on a monthly basis.

Most of the time, you will have the flexibility to choose whether you want to pay it over a specific period of time or a one-time lump sum. The duration for personal loan repayment ranges anywhere between one to seven years.

Line of credit

Line of credit, which sometimes goes by credit line, cash line, or flexible repayment loan, is when the bank agrees to set aside a pre-approved amount of money. This allows you to draw cash from it whenever you need it. You may withdraw the entire approved amount or just part of it. The interest will only be applied on the amount that you have withdrawn.

This type of loan typically does not have a fixed repayment period. You can opt to repay as quickly as you can as when you have the money. Alternatively, if you are unable to pay back the entire sum, you can repay the bank a stipulated minimum amount monthly. The remaining debt will then be rolled over to the next time. One important factor to consider is that the more money you owe the bank and roll over, the higher the interest you may end up paying.

Debt consolidation loan

If you have incurred a lot of debts with multiple banks or financial institutions, a debt consolidation loan may be the solution to managing these debts effectively. When you take out a debt consolidation loan with a particular bank, the bank will proceed to pay off your multiple debtors. This helps to consolidate all your debts such that you owe money to just that one bank, making it easier to manage your repayment as you only have just one repayment loan to worry about. Concurrently, this also means that you do not have to deal with varying interest rates slapped on by the different banks and financial institutions that you owe money to.

Do note that debt consolidation loans are very strictly regulated in Singapore. In order to qualify, you will need to have at least 12 times of your monthly salary.

When is a “good time” for me to take out a personal loan?

Before taking out a personal loan, always consider the interest rates charges and processing fees. It may be tempting to borrow money to go on a shopping spree or luxury holiday. However, when the interest rates kicks in, you may end up struggling to repay these loans and eventually find yourself heavily in debt.

As such, personal loans are usually the best option there is a financial emergency and you need a large sum of money urgently. 

Understanding personal loans interest rates in Singapore

When taking out a personal loan, it is crucial to do your due research as various banks or licensed moneylenders offer varying interest rates and repayment schemes. 

Here are some commonly used terms when advertising personal loans and what they mean:

Advertised interest rate

As its name suggests, the advertised interest rate is simply the interest rate that is shown for advertisement purposes. It is usually marketed as a low figure so as to attract potential customers who want to apply for a personal loan.

However, this figure does not give you the full picture as it excludes other fees such as admin fee or processing fee.

Effective interest rate

In Singapore, it is mandatory for banks to indicate the effective interest rate (EIR) next to the advertised interest rate. This figure takes into account other fees such as processing fees as well as tenure of your repaying schedule. 

Essentially, the EIR shows you the true interest rate of taking out a personal loan with the particular bank.

0% interest personal loans

Some banks may also offer a promotional 0% interest rate on short-term personal loans. However, do not be fooled by the 0% figure. These types of loans tend to come with extremely high processing fees.

This means that while you may “enjoy” zero interest rates on your loan, the bank actually collects your money upfront rather than in interest payments over time.

Where can I take out a personal loan in Singapore?

After considering all your monetary options and you have decided to go ahead with taking out a personal loan, here are some banks and companies that offer personal loans in Singapore:

Editor’s Note:

While every precaution has been made to ensure the accuracy and fairness of this listing, we acknowledge that they may be inaccuracies. Therefore, we urge you to contact the service provider above for the correct information and/or contact us with the correct information.

If you are a service provider and wish to be featured in this listing (MediaOne reviews are read by hundreds of thousands of Singaporeans), please contact us at [email protected]. There is no charge! Please allow us up to 3 working days to review before adjusting the information or including your entry.

Author Bio

Tom Koh is widely recognised as a leading SEO consultant in Asia who has worked to transform the online visibility of the leading organisations such as SingTel, Capitaland, Maybank, P&G, WWF, etc. Recently he was instrumental in consulting for a New York-based US$30B fund in an US$4Bn acquisition. Tom is a Computational Science graduate of the National University of Singapore. In his free time he performs pro-bono community work and traveling.
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