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A fast personal loan is one of the best options for financial relief when you need cash quickly. It is perfect for emergencies or as a temporary bridge for your monthly budget during a money crunch. Getting fast loan approval in Singapore is simple if you know what to expect. What is a fast loan? A fast loan is…
This is the most complete and updated guide to understanding Legal Licensed Money Lenders in Singapore. Regardless of whether you are: New to taking a loan from a licensed money lender in Singapore Looking for an urgent loan due to financial difficulties Rejected by the bank for your loan application In need of a loan but have bad credit history…
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Do you still remember the good old days before Covid-19 hit our shores? It’s been more than 2 years since the world was swept up in the pandemic; many people are still struggling to manage their finances while some have had their finances negatively impacted.
What is the best way to manage your finances during a pandemic? Who can you turn to if you need financial assistance? Where can you find the best money lenders in Singapore? We’ll answer some of your burning questions and give you tips on how to better manage your finances during this trying time.
Stick to a tight budget
If your income has been affected during this time, we would strongly advise you to devise a tighter spending budget and stick to it. Take stock of your savings, income sources, and expenses. While you’re at it, try to be stricter with your spending as much as possible.
If you are new to budgeting or are creating a new budget with your family, besides manually tracking your expenses in spreadsheets, you can make use of free mobile budgeting apps (e.g. Planner Bee,Wally, Spendee, Monny) to stay on top of things on the go. These apps usually churn out monthly reports for you so to help you track your spending across various categories such as bills, food, entertainment, and transport. Scrutinise the reports, then cut back on or reallocate your funds accordingly. Having access to such data can help you set a more realistic budget.
Once you get the hang of tracking your finances, you’re likely to be more disciplined to spend within your means and be more mindful of how much goes into your savings.
Clear your credit card bills
If you have accumulated hefty credit card bills and are struggling with your cash flow, clearing your bills may be easier said than done. If possible, you should at least pay the minimum sum , and whatever you can spare (instead of waiting until you have enough cash to clear them in one go).
In more dire situations where you have trouble clearing your debts, you can connect with a licensed money lender in Singapore. A financial institution or a money lender in Singapore will be able to offer you financial relief if you meet their application criteria. For example, you may consider a debt consolidation loan from a licensed money lender in Singapore to consolidate your loans and pay through a single, lower interest account every month.
Increase or jump-start your emergency fund
Remember that saving even a small amount goes a long way. Living in a pandemic is certainly a reminder that we should always have an emergency fund to fall back on.
However, all hope is not lost if you don’t have sufficient savings and require cash for an emergency. You can consider reaching out to a licensed money lender in Singapore or other financial institutions for a quick and safe, legal loan option.
The best money lenders in Singapore
LoanHere is a platform that connects our customers to the best money lenders in Singapore. If you are looking for 12-month loan lenders in Singapore or a shorter-term loan for personal needs or business purposes, we are here to support and provide you with the necessary information that you require.
We help you narrow down your search for the best money lenders in Singapore by making it easier for you to compare your options and make an informed decision. All you need to do is fill out this application form on our website and we will reach out to you with a curated list of licensed money lenders.
Our LoanHere platform is completely free to use as our goal is to connect our consumers to reliable money lenders in Singapore in the shortest amount of time possible, with the best loans to meet their needs.
Whenever we apply for a loan, our top priority is almost always to look for the cheapest rates. This is completely understandable as all of us are merely trying to save on some cash and not burn a hole in our pockets.
However, it is crucial to remember that if something sounds too good to be true, it probably isn’t real, or legitimate. For example, a money lender that offers extremely attractive rates but uses high-pressure sales tactics and demands upfront payment.
The easiest way to differentiate a licensed money lender in Singapore from an illegal one is through the Ministry of Law’s Registry of Moneylenders site. This list contains the legal and credible money lenders that are approved by the government.
Take note that every legal lender should have a license number. These money lenders have been approved to manage their business under strict regulations set by the ministry. Before you apply for a personal loan, check your money lender against the list and if you don’t find them there, take that as a red flag.
Another way you can check if your money lender of choice is legitimate is by doing a little digging into their reviews and contact details. Money lenders should have their phone numbers and their business address on their secured websites. These are some of the information that illegal money lenders may leave out as they prefer being untraceable.
2. Pay attention to the required documents for verification purposes
Your money lender would require you to submit your income tax statements, payslips, along with your NRIC.
Based on these documents, your money lender officer will determine your loan amount and personal loan interest rate before drawing out a verification document that you will have to sign. While some money lenders may not ask for your credit report when applying for a personal loan, they will always ask for your income statements.
If your lender does not ask for any sort of documentation related to your salary, it is probably a warning sign for you to walk away.
3. Compare with other lenders
A good way to gauge the credibility of your lender is to compare them with other money lenders. If your cheapest personal loan quote seems too good to be true, it probably is. Many illegal money lenders promise the cheapest personal loan interest rates in Singapore, which also come with unreliable protocols. For example, they may demand upfront payment even before processing an application and may even want money to be sent through an untraceable method, such as a prepaid gift card.
Licensed money lenders are not authorised to charge an administrative fee or processing fee to secure the loan before the loan is disbursed.
Another clear warning sign is that unlicensed lenders usually do cold calls or send out unsolicited text messages; legal lenders deal at their physical offices, which are verified by the ministry.
4. Ensure you aren’t being charged extra interest for your loan
While some illegal lenders promise the most hassle-free, cheapest personal loan in Singapore, they may also be trying to charge exorbitant rates without you even realising.
There are laws set in place by the ministry that put a cap on interest rates that licensed money lenders are allowed to charge their clients. For example, licensed money lenders in Singapore are authorised to charge a maximum interest rate of 4% per month. If the interest rate offered is higher than that, cancel your transaction immediately!
Before engaging with a money lender, it is important to do your research and tick off a checklist comprising both red and green flags.
A fast personal loan is one of the best options for financial relief when you need cash quickly. It is perfect for emergencies or as a temporary bridge for your monthly budget during a money crunch. Getting fast loan approval in Singapore is simple if you know what to expect.
What is a fast loan?
A fast loan is a personal loan with a quick approval process. The application process is as secure as any other loan but the lender accelerates the approval process so that the loan principal is paid out to the borrower quickly.
Personal loan fast approval is more common with licensed money lenders than with banks. A good licensed lender can disburse the amount within a day of the formal application process. By contrast, most banks might take up to 2 weeks for bad credit loans fast approval.
The main reason for this difference is that licensed money lenders have a less stringent vetting process for applicants compared to banks. This simplifies the application stage, saving time and paperwork. The downside of fast loan approval in Singapore from a licensed lender is that they generally charge a higher interest rate.
What can fast loans be used for?
Fast loans may be used for a very wide variety of financial purposes. However, most people who end up applying for cash loan fast approval do so for a few common reasons:
Medical emergencies such as sudden surgery or hospitalisation
Pay utility bills (gas, water, phone, etc.) to avoid disconnection
Cover instalments of other loans to avoid huge penalties
The common factor for all these reasons is time. When you need cash urgently, fast cash loans are the obvious answer.
Who can apply for a personal loan fast approval and what documents do you need?
Cash loan fast approval with banks
Applicants must be:
Singaporeans or PRs. (Some banks extend loans to foreigners residing legally in Singapore)
At least 21 years old
Employed
Earning at least $20,000 if they are Singaporeans and $45,000 if they are foreigners (salary requirements vary between banks)
Documentation is essential for fast bank loan approval in Singapore. Applicants must also provide the following documents:
NRIC or FIN
Proof of employment or legal residency in the case of foreigners
Last 1 year Income Tax Notice of Assessment (NOA)
Note that salaried employees may provide a CPF contribution history statement for the past 9 months or their latest payslip or salary account credit statement in place of the NOA.
Fast loan approval in Singapore with licensed money lenders
Applicants must be:
Singaporeans, PRs or foreigners residing legally in Singapore
If you want to get fast loan approval in Singapore, you must understand what affects the speed of the approval process. Here are the 5 most important factors:
1. Credit score
Credit score is a number issued to an individual by the Credit Bureau Singapore (CBS). It varies between 1000 and 2000 and indicates the likelihood that an applicant will repay a loan. Banks usually reject loan applicants with a low score but licensed money lenders may still approve them. However, a low score may still affect the loan (which we will explain in the next section).
2. Credit utilisation
This is the proportion of total credit available to an individual that they have already used. A higher utilisation means that the person is approaching their debt limit.
3. Financial history
This shows how an applicant handles previous loans. A history of missed and delayed payments as well as defaults means that they are a high-risk candidate.
4. Employment
Current employment is important but so is the applicant’s work history. Those who have maintained steady employment over a longer period are seen as ‘safer’ borrowers.
5. Residency status
Singaporeans and PRs get the highest priority because of their ties to Singapore. Foreigners are seen as a higher risk because they are more likely to abandon the country when in debt.
An ‘ideal candidate’ is someone who has a high credit score, a credit utilisation of less than 20%, a strong history of timely repayments, a lengthy and uninterrupted work history, and who is a Singaporean or PR.
How do these factors affect your loan?
The section above touches on the individual factors that affect how fast a loan is approved. While speed is important, being a ‘good’ borrower comes with a host of other advantages, too.
Speed of loan approval
Better candidates can get faster approval for loans because there are fewer checks associated with their applications. This can be the most important advantage during an emergency.
Loan principal
If you are deemed more trustworthy (according to the factors above), you might be eligible for larger loans. Bigger loans give you a greater ability to meet your financial obligations.
Interest rate
Better candidates might also be charged less interest as a ‘reward’ for their reliability. Lower interest rates save you money with every instalment.
Repayment term
If you have a good credit score and financial history, you might be given a longer period to repay the loan. With repayment spread out, each instalment is smaller and easier to repay.
Processing fees
Also, better candidates might have some fees reduced or waived entirely.
Chapter 1
Introduction to licensed money lenders in Singapore
What are legal licensed money lenders?
A licensed money lender in Singapore is a registered loan company that carries out the business of moneylending, in consideration of a larger sum being repaid, with the business authorised, licensed and regulated by Singapore’s Ministry of Law.
How are licensed money lenders different from banks?
There are a few ways to get a loan in Singapore, such as borrowing from the bank or from a licensed money lender. What’s the difference between taking a loan from a bank and from a licensed money lender?
Take a look at our comparison illustration below:
Borrowing from banks
Borrowing from licensed money lenders
What is the maximum sum you can borrow?
Up to 10 times monthly income
Up to 6 times monthly income
What is the repayment period? (Personal loan)
Up to 5 years
Up to 12 months
How fast is the loan approval?
Up to 2 weeks
Same day, usually less than 30 minutes
How easy will your loan be approved?
Very strict: Bad credit history No stable income Low income < $20,000 a year
Less strict: Employed Did not default on existing repayments to money lenders
What is the interest rate?
3.5-11% per annum
1-4% per month
How to apply
Can apply online or visit branch office
Must visit their office
Processing fee
Interest + processing + other fees can add up to 6.5-20% per annum
Up to 10%
What are the pros and cons of taking a loan from licensed money lenders?
Borrowing from licensed money lenders often comes with its advantages and disadvantages. Some of you might know that licensed money lenders have less stringent loan application processes than banks but have higher interest rates.
What are the pros and cons? We summarise it for you:
Pros and Cons of Taking a Loan from Licensed money lenders
Pros:
Cons:
Instant approval (usually within 30 minutes)
High late charges (late interest up to 48% p.a. on overdue principal and/or interest)
Simple loan application form
High interest (up to 48% p.a.)
Minimal documents required
High processing fee (up to 10%)
Fund is disbursed to you by cash or bank transfer immediately after loan approval
Shorter repayment period (up to 12 months)
No credit discrimination. You can apply even with bad credit history
Loan up to 6 times monthly income
What is the Money Lenders Act?
The Money Lenders Act is an Act for the regulation of moneylending, the designation and control of a credit bureau, the collection, use and disclosure of borrower information and data, and for related matters.
In short, it lists out all the legal confines within which authorised money lenders in Singapore are allowed to conduct their business activities.
According to MinLaw’s list, there are 156 money lenders in Singapore.
Chapter 2
Comparing, choosing and verifying best licensed money lenders in Singapore
Here’s how you can verify and check the license of money lenders
Before you take a loan from a money lender, it is very important to check if they are legal and licensed, to avoid illegal money lending or money lender scams in Singapore.
Call the landline of the licensed moneylender to verify. Illegal moneylenders or scammers might disguise themselves as licensed moneylenders, so besides checking if they are on MinLaw’s list, you should still call their office landline to confirm if you are really dealing with them.
Ensure they have a physical office. It’s not possible to complete the loan process entirely online. Borrowers will still need to go down to the office for a face-to-face verification during the loan application process.
How you can choose a good and reliable licensed money lender
There are many licensed money lenders available offering similar loans. How can you ensure that you choose a good licensed money lender and a reliable one? Here are some tips:
Make sure they are under MinLaw’s list of licensed money lenders in Singapore
First, check whether they are licensed and are part of MinLaw’s list of licensed money lenders in Singapore. If they are, it is safe to proceed to apply for a loan with them.
If they are not, they might be illegal money lenders and we do not recommend using those as you may end up having to pay hefty fees and interests or get harassed by them if you are unable to repay your loan.
Check reviews of licensed money lenders in Singapore
Check the money lender’s reviews on Google and other sites, especially verified reviews to check its reputation and credibility. It is better to take a loan with a reliable money lender that has a higher number of positive ratings.
Compare money lenders’ fees and rates
Approach the licensed money lenders you are interested to take a loan from and ask about their fees. It’s always recommended to compare rates across different money lenders before deciding on one.
Check their loan contract terms and conditions
Before you sign the loan contract, remember to check their terms and conditions carefully to make sure that all the agreed terms are stated clearly in the contract. If there’s anything that’s unclear, clarify with them. If you feel uncomfortable with any terms that you have not agreed to, you can always walk away and choose another money lender.
Ensure they are a good fit and are polite when communicating with you
Make sure that the representatives of the licensed money lender are communicating with you politely at all times, regardless of whether you are speaking with them on the phone or meeting them at their office.
Check for recent news/stories on licensed money lenders
Sometimes, some money lenders might be in the news due to bad practices – there are a number of money lender horror stories recently! So remember to do your research and check if the money lender you are interested to take a loan from has good records and are not in the news for the wrong reasons.
Chapter 3
Types of loans, interests and fees charged by licensed money lenders
What are the interest rates licensed money lenders in Singapore can charge?
Maximum interest rate licensed money lenders can charge: 4% per month
If you fail to repay your loan on time, the money lender can charge you a maximum rate of late interest of 4% per month for each month the loan is repaid late.
What are the other fees licensed money lenders can charge?
Licensed money lenders can only impose these additional charges:
Late repayment fee of not exceeding $60 for each month of late repayment
A fee not exceeding 10% of the principal of the loan when a loan is granted
Legal costs ordered by the court for a successful claim by the money lender for the recovery of the loan if the borrower has defaulted on the payment
The total fees charged by a money lender for any loan (including interest, late interest, upfront administrative and late fee) cannot exceed an amount equivalent to the principal of the loan. For example, if you take a loan of $8,000, the interest, late interest, 10% administrative fee and monthly $60 late fees cannot exceed $8,000.
How do licensed money lenders compute their interest rate?
Licensed money lenders’ interest rates are not flat, but are instead reducing. Personal loan interest rates are calculated based on the principal amount outstanding at the end of a specific period.
For example, if you borrowed $10,000 and have repaid $1507.62 of the principal loan amount (not including interest), interest for your next payment will be calculated based on the remaining balance of $8,492.38.
Find out more about the difference between flat and reducing interest rates.
How do money lenders calculate late charges: Late fees, compound interest and late interest?
If you don’t repay your loan on time, you will incur late payment charges from licensed money lenders. These can include late fees, late interest and compound interest.
A licensed money lender must not impose any late fee of more than an aggregate of $60 within a period of a calendar month. A period of a calendar month extends from a particular numbered day of a month up to the corresponding numbered day of the following month less one. Accordingly, the general rule is that the earliest date a money lender may impose the next late fee, if the repayment is still not made, would be the same corresponding date in the next month.
Late interest is accumulated on a daily basis based on an interest rate not exceeding 48% per annum on the overdue principal and/or interest.
Compound interest is accumulated on a daily basis based on an interest rate not exceeding 48% per annum on the overdue principal.
Both late and compound interest can only be charged on the amount that is repaid late, but not on the outstanding loan that is not yet due to be repaid.
What are the common market practices for loan tenure, loan amount, interest and other fees?
Most money lenders provide a repayment period of 1 to 6 months. Only good money lenders will provide a loan tenure of up to 12 months.
The loan amount approved is usually around 1-3 times of your monthly income, charged at 4% interest rate, with processing fees of 8-10% of your loan amount.
What are the different types of loans you can get from the best money lenders in Singapore?
Personal Loan
Personal Loans are a form of credit that can help you make a large purchase or consolidate your other debts. Lenders will deliver a one-time cash payment to borrowers and borrowers will need to repay with interest over regular installments. There are many reasons why people take personal loans.
Most employed Singapore residents can apply for personal loans online, such as full-time employees, part-time employees, and self-employed people such as property agents, insurance agents, Grab/ Gojek/ taxi drivers, food delivery riders, etc.
Most foreigners in Singapore can also borrow from licensed moneylenders as long as they are residing in Singapore.
SME Business Loan
Often, to kickstart new businesses, you need capital injection or funding. And sometimes, unforeseen circumstances such as the Covid-19 pandemic might cause many small and medium businesses to run into financial difficulties.
During this time, a financial boost from an SME Business Loan would help to fuel the business operations and help the company tide through this difficult period.
Chapter 4
Loan application requirements and processes
What is required when applying for a loan from licensed money lenders?
What is the maximum amount you can borrow?
For Secured Loans:
Secured loans are protected by an asset, such as a home or a car, which can be used as collateral. This means the lender will hold the title or deed until your loan has been repaid in full. If you default on the loan, the lender will be able to repossess the collateral and sell it to recoup their losses. Examples include Residential Property Loans and Motor Vehicle Loans.
Borrower’s Total Debt Servicing Ratio (TDSR) for property and car loans
(The portion of a borrower’s gross monthly income that goes towards repaying all their loans)
Maximum 55%
Borrower’s Mortgage Servicing Ratio (MSR) for HDB and EC loans
(The portion of a borrower’s gross monthly income that goes towards repaying all of their property loans for HDB flats and Executive Condominiums)
Maximum 30%
Loan-To-Value (LTV) for car loans
(The amount of loan expressed as a percentage of the purchase price (including taxes and COE price) of the motor vehicle)
Maximum 60-70% depending on open market value of vehicle
For property loans and car loans, a borrower’s Total Debt Servicing Ratio (TDSR), which refers to the portion of a borrower’s gross monthly income that goes towards repaying all their loans, has to be maximum 55%. The borrower’s Mortgage Servicing Ratio (MSR), which shows the portion of a borrower’s gross monthly income that goes towards repaying all of their property loans for HDB flats and Executive Condominiums (ECs), is capped at 30%.
The maximum Loan-To-Value (LTV) for car loans, which refers to the amount of loan expressed as a percentage of the purchase price (including taxes and COE price) of the motor vehicle, is 60-70% depending on the open market value (OMV) of your vehicle.
For Unsecured Loans:
Unsecured loans don’t require collateral from the borrower, which means the lender is taking a higher risk to loan money to the borrower. Hence, unsecured loans tend to have higher interest rates and a certain maximum amount you can borrow.
Maximum amount you can borrow for Unsecured Loans
Borrower’s annual income
Singapore Citizens and Permanent Residents
Foreigners residing in Singapore
Less than $10,000
$3,000
$500
At least $10,000 and less than $20,000
$3,000
$3,000
At least $20,000
6 times monthly income
6 times monthly income
Is your personal information secure with a licensed money lender?
As you will need to submit your personal information and documents when you apply for a loan, some of you might be concerned about whether your information is secure with a licensed money lender.
Licensed money lenders have to adhere to the Personal Data Protection Act (PDPA), so rest assured that your information will be secure.
Tips you should take note of when taking a loan from money lenders
When encountering financial difficulties, taking a loan from licensed money lenders can help you with cash flow problems and help you to ease your financial worries in the short term.
However, it does not mean your financial troubles would be solved in the long run. You still need to do careful financial planning to ensure that you are able to repay your loan on time to avoid accumulation of late fees and additional interests.
Here are some tips you need to take note of before you get down to borrowing:
1. Make sure you are able to repay the loan on time
When taking a loan from a licensed money lender, it is important to repay your loan on time. Late repayment will cause you to incur late fees and additional interest for late repayment, which can cause your debt to accumulate. So make sure to do your financial planning and budgeting well.
2. Make sure you fully understand the contractual terms
Before you sign the loan contract, it is crucial that you read the contract carefully before you sign. Ensure that the agreed terms are stated correctly in the contract, which should include:
Your particulars
The amount you are borrowing
Interest rate and fees
Repayment terms and schedule
money lender’s details such as license number, business registration number, etc.
If you do not qualify for a loan, good money lenders in Singapore will usually give you the option of getting a guarantor.
4. Be careful of taking multiple loans
If you have an existing loan, you can still take a second loan, subject to approval.
You can loan up to the total maximum borrowing amount, regardless of the number of licensed money lenders you borrow from. However, this is not recommended as it can be stressful to manage multiple loans.
You can opt for a Debt Consolidation Plan from a money lender which helps you save money by reducing the amount of interests you have to pay
5. Take note of your credit score
Although licensed money lenders will generally allow you to take a loan even if you have a bad credit score, as borrowing from some private money lenders often involves no credit check, some may still check your credit score with Credit Bureau Singapore (CBS), which will reflect your outstanding loan(s) with banks and other financial institutions, not including licensed money lenders.
If you have a bad credit score and are in a lot of debt, we highly recommend you to seek help with relevant organisations before taking another loan and adding to your debt. If you are unable to pay your debt to the bank, here’s what you can do.
6. Beware of illegal money lenders in Singapore
Licensed money lenders have strict protocol to adhere to and are not allowed to finalise the loan without meeting you face to face and signing a loan contract. If they are not in MinLaw’s list of licensed money lenders in Singapore and don’t want to meet you physically, they are likely illegal money lenders or scammers.
Also, licensed money lenders are usually not 24-hour money lenders. If you find a 24-hour money lender in Singapore, they are usually illegal. However, Singapore has many online money lenders, meaning you can apply for your loan anytime on online licensed money lender loan portals anytime, such as on LoanHere.
When you are at the licensed money lender’s office, be sure to look for and check their money lender license certificate. Every licensed money lender will need to display their license certificate in a conspicuous place.
7. Consider financial assistance schemes by government agencies
If you are facing financial difficulties due to loss of income or employment and are struggling to make ends meet, it may be better to consider financial assistance schemes by government agencies before considering taking a loan from a licensed money lender, as taking a loan can add to your debt.
Some resources where you can find and apply for financial assistance schemes:
ComCare
Short to medium financial assistance to urgent interim assistance provided by the Ministry of Social and Family Development (MSF).
Hotline: 180-222-0000 Website
SupportGoWhere
A portal where you can find financial support for families, Covid-19, disability, healthcare and more. Website
8. Take a loan from licensed money lenders only when you don’t qualify for a bank loan
As bank loans generally offer longer repayment periods, lower interest rates and lower late charges than licensed money lenders, it is better to apply for a bank loan first.
Taking a loan from a licensed money lender can be your second option if you don’t qualify for a bank loan. Some money lenders may have low interest rates depending on your loan and loan tenure. You will need to compare between various money lenders and check.
How to borrow from licensed money lenders (Procedure)
What is the Money Lenders Credit Bureau (MLCB)?
The MLCB is a platform that shows borrowers’ existing outstanding loan principal amount with other money lenders, total payable amount, repayment records and borrowers’ borrowing limit.
When you apply for a loan with licensed money lenders, they will need to submit relevant information to the MLCB to check your borrowing limit at that time.
Chapter 5
Loan rejection
Possible reasons why your loan is rejected
Although loan applications with licensed money lenders are usually approved easily, there might still be a chance that your loan might be rejected due to the following reasons:
You don’t have a Singapore home address
Only Singapore Citizens, Permanent Residents and foreigners residing in Singapore can borrow from licensed money lenders.
You defaulted loan repayment from money lenders recently
This might mean there might be a risk of you defaulting on your loan with your next money lender, so they may decide not to approve your loan application.
Money lenders will need to check your loan details with other money lenders through MLCB, so they will be able to know your current loan status and debt before they decide if they should approve your loan.
You have ongoing litigation
If other licensed money lenders or banks are taking legal action against you for defaulting on loans or if you have other ongoing litigation, it is likely that money lenders may decide not to approve your loan.
You are bankrupt or under Debt Repayment Scheme (DRS)
Usually, when borrowers have accumulated so much debt that they are unable to repay them, they might declare bankruptcy as a last resort or be placed on a Debt Repayment Scheme. In this case, you will not be allowed to take up another loan.
Inaccurate or insufficient documentation provided
When applying for your loan, do ensure that all your particulars and details are accurate and that you’ve submitted all the relevant documentation.
Regarding showing proof of income, even if you don’t have a payslip or CPF Contribution Statement, you can still get a personal loan if you can show your income proof through other documentation.
You are unemployed
If you are unemployed and do not have a stable source of income, there is a risk that you may not be able to repay your loan. So money lenders may decide not to approve your application.
You had applied for multiple new loans recently
This can mean you might have difficulties repaying all your debt. Also, if you have reached the maximum borrowing limit, you will not be able to take up any more loans.
You have multiple loans and your salary cannot sustain
If your salary is insufficient to repay all your current multiple loans, it may be tough for the next money lender to approve your application.
Chapter 6
Things to note when repaying your loan
Loan Repayment Tips
How do you settle your loan with your licensed money lender? When repaying your loan, remember to check these details carefully:
Repayment frequency
The loan repayment frequency may be different for different money lenders. It can be a weekly, bi-weekly, a single-payment payday loan or monthly loan with moneylenders depending on your loan contract and agreement.
When your payment is due, most of them will send out a payment reminder. But it’s recommended to set your own personal reminder just in case. Late repayment will incur late fees and late interest. This can cause your debt to add up.
Payment methods
Available repayment methods to licensed money lenders include cash, interbank transfer and cheque.
Send proof of repayment every time you make payment
Every time you make payment for your loan (such as every month, etc, depending on your repayment cycle), remember to keep the payment receipt and send it to the licensed money lender as proof that you have paid.
Receipt needs to be issued within 7 days
Every time your repayment has been made, the money lender also needs to send you a receipt either by mail or digitally (such as through SMS, email or WhatsApp) within 7 days after the loan repayment has been made. The receipt will show the outstanding amount until the loan has been repaid in full.
If you did not receive the receipt after you made the repayment, remember to request for one.
To check outstanding loan amount, request for a Statement of Accounts (SOA)
You can request for an SOA to check your outstanding loan amount and outstanding repayment sum. A licensed money lender will also send you an SOA every 6 months.
Take note of outstanding payment
Usually, the outstanding payment would be included in the receipt after you have made your monthly repayment. Some money lenders allow you to access it through their portal online. Alternatively, you can check with them directly.
After you have repaid your loan in full, and if you have no more arrangements with the money lender, you will no longer receive any calls, emails, mails, SMS or any other form of communication from them regarding your fully paid loan.
What can you do if you are unable to repay moneylenders in Singapore?
Taking a loan may help you with better cash flow in the short term, but it does not mean solving your financial problems in the long run. Even after taking a loan, it is important to manage your cash flow to ensure that you are able to make repayment on time and that your debt does not accumulate.
If you really can’t repay your loan, you can do the following:
Request for payment extension
It is best to approach your licensed money lender and negotiate with them a realistic payment extension deadline that you can meet. Make sure you do your budgeting and financial planning well to ensure that you can really make the payments on time by the new deadline.
Seek help from social service agencies:
If you are struggling to manage your finances and debt, and if these are causing you a lot of distress, please seek help from these social service agencies here for credit counselling and debt management.
File for bankruptcy
If your debt has amounted to at least $15,000 and if you are still unable to repay your loan despite payment extensions, filing for bankruptcy may be an option for you.
When you file for bankruptcy, the accumulation of loan interest stops and money lenders would also not be able to carry out legal proceedings against you.
However, filing for bankruptcy comes with serious consequences (such as having your assets sold to repay your debt) and it should be your last resort.
Chapter 7
Licensed money lenders debt collection
What can licensed money lenders do if you default the loan?
Usually, when borrowers default on their loans, licensed money lenders would hire debt collection agencies to collect the debt from borrowers.
Although there are currently no laws in Singapore that regulate debt collection, licensed money lenders and debt collectors need to adhere to the code of conduct and good practices set by MinLaw.
Money lenders will also need to bear the consequences if debt collection agencies use illegal means to collect debt from borrowers, such as using violence, harassment, etc.
They will usually try to collect the debt through these methods:
Send Letter of Demand (LOD) to you by post to your residential or employer address.
Visit your home or office to recover the debt (either directly or sending debt collection agencies to do so).
File for litigation against you (yes, money lenders can file a case in court)
How can you settle disputes with licensed moneylenders?
Sometimes, when the moneylender or debt collector turns up at our doorstep or calls us due to late repayment, some borrowers might panic or get upset.
Here’s some tips on how you can settle conflicts with money lenders:
Try to resolve the conflict by empathising with the debt collector or moneylender and react in a calm, non-defensive and respectful manner.
Try to negotiate for a compromise – an extension of the repayment deadline that is reasonable to you as well as to the moneylender.
If you are unable to control your emotions or are having difficulties negotiating, get someone else (a family member or friend) to help mediate or negotiate for you.
If negotiations fail or if the situation gets ugly, call the police.
What can you do if you encounter licensed money lenders’ harassment?
However, if you encounter unlicensed money lenders’ harassment, call the police immediately.
Getting a loan from a legal money lender can help to ease your cash flow, especially during emergencies. However, remember to do your due diligence to check that the money lender you are borrowing from is legal and licensed, and do your budgeting well to avoid incurring late fees and charges.
If you are experiencing difficulties, we can assist you with your financial planning and help you to find the best money lenders that provide loans suitable for your needs.
Moving to a new country can be daunting. The distance from family and friends, contending with unfamiliar ways of doing things and a general sense of isolation can be very stressful. Add financial problems to the mix and it is easy to feel overwhelmed. If you are an expatriate working in Singapore and in need of extra cash, a foreigner loan may be the best solution.
Can foreigners apply for personal loans in Singapore?
A personal loan for foreigners is not as easy to obtain as a regular loan. The income criteria are stricter, particularly for those in the low-income bracket. For those on dependent visas, the restriction on casual work limits the avenues of additional income as well so that’s when a loan might be helpful if you are in need of cash.
If you are struggling with this, one way for you to better qualify for a foreigner loan in Singapore would be to find a guarantor with a good credit history. (This, however, might be tough for those who don’t have a strong social and familial network here.)
Note that most banks will only accept an application for a cash loan for foreigners in Singapore if you are 21 years of age or older.
What are the eligibility criteria for personal loans for foreigners in Singapore?
Applicants have to satisfy several criteria before they are approved for a foreigner loan in Singapore.
Residency
To be eligible for a foreigner loan, you need to be residing in Singapore. This applies to loans from both banks and licensed money lenders.
Employment criteria
Licensed money lenders generally do not place restrictions on employment when it comes to personal loans for foreigners. Anyone who is legally employed and can produce the relevant employment and income documents is eligible to apply.
Employment requirements vary between loan providers. Generally, Work Pass holders need to be able to show at least 3 months of employment to qualify. Additionally, there should be at least 3 months (or 6 months for certain lenders) remaining on their contract or work permit from the day of the loan application. Because the exact criteria vary between institutions, speak to each to familiarise yourself with their conditions.
Loan limits
The limits for a cash loan for foreigners in Singapore set by the government are summarised in the table below.
Borrower’s annual income
For loans with licensed money lenders
For bank loans
Less than $10,000
$500
Not eligible
At least $10,000
and less than $20,000
$3,000
$20,000 to $40,000
Up to 6 times monthly income
Above $40,000 ($60,000 for some banks)
Up to 10 times monthly income
However, licensed money lenders in Singapore are private businesses and are free to set more stringent criteria. Many of them might only approve a foreigner loan if the applicant earns over $20,000 per year.
Why is the criteria for foreigner loans stricter?
The tighter restrictions for a foreigner loan in Singapore protect the lenders from bad debts.
This is because a foreigner has less reason to stay in Singapore compared to locals. If they incur very large debts, they may be tempted to leave and abandon their repayment obligations. This is especially the case with low-income foreign workers; lenders are generally more lenient towards high-income borrowers who may have higher income capabilities to repay their loans.
Another reason is that foreigners have a limited (or no) credit history in Singapore. The lack of supporting credit information automatically disqualifies them from some loans and lenders.
Where to apply for personal loans in Singapore for foreigners?
Foreigners in Singapore have two main choices for personal loans, namely banks and licensed money lenders.
All major local banks will extend a cash loan for foreigners in Singapore if they satisfy certain criteria. The five biggest banks are:
Comparing the best rates and offers from different licensed lenders? Use LoanHere to help you compare different quotes so you can find the best deal for a foreigner loan in Singapore.
What are the documents you need?
You will need several documents to apply for a personal loan for foreigners in Singapore.
Proof of identity – FIN card, passport and work pass (valid for a minimum of 6 months from application)
Proof of address – Latest bank statement, utility bill or telephone bill
Proof of income (salaried) – Bank statements and CPF statements with at least the previous 3 months of contributions, income tax assessment and/or payslips for at least the previous 3 months
Proof of earning (self-employed) – Bank statements, CPF statements, income tax assessment and/or payslips for at least the previous 12 months
Note that lenders do not inform employers when an employee takes a loan. You may apply for a loan without worrying if it might affect your job.
How can you apply for the best foreigner loan in Singapore?
The loan procedure for foreigners is similar to that for locals. You can either apply in person at the bank or licensed lender’s office, or make an online application on the respective websites. Once you have submitted your online application, the financial institution will contact you.
They will then need to verify all your relevant documents before approving your loan. It may take up to 2 weeks with a bank loan and as fast as one day with a licensed money lender. If you need an urgent loan, a licensed lender is clearly the better option.
Once your loan is approved, the lender will draw up the loan contract. Always read through the terms of the contract and pay particular attention to the interest rates, instalment due dates, repayment period and fees. If you do not understand, always clarify before signing.
When the loan contract is signed, the money will be disbursed immediately. Banks will do this via a bank transfer or cheque while money lenders may do it via bank transfer or in cash.
Loan repayments for banks may be made using cheques or bank transfers. Money lenders accept cash, cheques or bank transfers.
Do you need a foreigner loan from a licensed money lender in Singapore?
Recently incurred an emergency expense and don’t know where to get enough funds to tie you through this difficult time? An instant loan could be a lifesaver in such circumstances and the best part is, instant loan approval in Singapore is really not that hard to achieve.
Before we get into the details of how to get fast loan approval in Singapore, let’s first define what an instant loan is. Essentially, such loans are short-term loans that are provided by a legal money lender. The flexibility lies in the simple approval process, fast funds deposited straight to the borrower’s bank account, and the short repayment period. It is suitable for those who need to manage unexpected financial obligations such as a repair bill or medical expenses. Some examples of instant loans include credit card consolidation loans, personal loans, and wedding loans.
Features and Benefits of An Instant Loan
As the name suggests, an instant loan is fast and convenient. There is also a myriad of features that make such loans more attractive than others. Here are some key features and benefits that pique the interest of most borrowers:
Instant loan approval in Singapore is simple and straightforward.
There is no need to queue up at the money lender’s office because the application can be done online. There is also no need for a guarantor or collateral.
Fast approval loan in Singapore that is regardless of borrower’s credit scores
Instant loans are available to individuals with good or poor credit history because the loan amounts are relatively small and the repayment period is usually within six months. As such, the legal money lender is more confident about issuing the loan since the chance of recovering the borrowed funds is relatively high.
Fast disbursement of cash and reliable instant loan interest rate in Singapore that is regulated by the Ministry of Law
Upon loan approval, borrowers can receive cash disbursement into their bank account immediately. This is extremely useful for those who are in urgent need of cash. Furthermore, borrowers’ interests are protected by local governing bodies hence eliminating the chance of being scammed with escalating rates.
The entire loan application process with any legal money lender takes no more than 30 minutes. Even the instant loan approval in Singapore is almost immediate if the supporting documents and information required are presented simultaneously.
Here’s how the application process looks like:
Step 1 – Fill up the online form on the legal money lender’s website, schedule an appointment in the office, and provide all the supporting documents and information required for loan processing
Step 2 – Once the loan is approved, sign the loan agreement to agree on the loan terms and conditions including the chargeable loan interest rate in Singapore
Step 3 – Get approval in as fast as 30 minutes and receive cash in your account immediately.
7 Requirements To Obtain an Instant Loan
Ready to apply for an instant loan? Make sure to get the required supporting documents and information ready before you rush ahead with the application. Providing essential data to the legal money lender is a must for getting instant loan approval in Singapore. Don’t miss out on any details because they may disrupt your application process.
Refer to the following table for the 7 requirements you need to meet before submitting your instant loan application:
1) Age
Loan applicants must be at least 18 years old and above
2) Nationality
Singaporeans, Permanent Residents, and Foreigners are eligible
3) Employment status
Applicants must be gainfully employed at the time of loan application
4) Prove of identity
Singaporeans and Permanent Residents to provide Singpass MyInfo or NRIC
Foreigners to provide passport details
5) Proof of employment
Employed applicants to prove with a certificate of employment while self-employed ones can provide income tax statements or Notice Of Assessments
Foreign applicants can provide work permits, E-passes or S-passes
6) Payslips
Employed applicants to provide the most current three months’ payslips or CPF statement
(Freelancers who don’t have a local income but have regular foreign income streams can also provide relevant income proof during application of instant loan)
7) Proof of residence
Foreign applicants to provide tenancy agreement or bills with address and name listed on them
Some people assume that investing requires a big sum of cash and is usually practiced by wealthy people. However, this is very untrue as investing can be done by anyone, no matter your wealth size. Investing is very important especially when you work hard for the money you earn. The money you save can be used to grow your wealth exponentially over the years, which offers some financial security. Your investments can become another stream of income for you or be used for your retirement so you can live comfortably. Not only can you invest your own savings, but you can also create a steady payout by finding the best personal loan in Singapore to help in your investment plans. While anyone can begin investing, a beginner might find it a little daunting as there are many types of investments and certain things to note before diving into it. Here are the basics of what you need to know before creating your first investment portfolio.
How much time and money do you have?
When starting your investment portfolio, you have to consider the amount of time you want to put into investing. There are active and passive investments and they reap different rewards but choosing which type to get into depends on the amount of time you have. Active investing will require a lot of research on your own to find out the different opportunities that work for you. It will also involve analysing the stock market which requires some knowledge in investing. As these active stocks are constantly changing, it will require you to closely monitor them, which can take up a huge chunk of time in your day. Active investing is a riskier option but it can incur a huge amount of returns when done right. On the other hand, you have passive investing, which can be done through a trusted financial advisor by depositing a lump sum of cash into your investment of choice. You will not have to touch your money as it steadily grows on its own over the years. The longer you leave your money in the investment, the more return you will receive. Passive investing is a hands-off approach that can get you moderate profits.
Next, you have to think about the amount of money you have to put into investments. Once you receive your monthly income, you should pay off your expenses and loan repayments before using the remaining money to invest. Even a small amount of $100 can be used to invest but what is more important is that you set aside a long-term budget as investing will require consistent funding. While some investments can also profit from getting the best personal loan, it is still important to set aside your own investment fund.
Assess Your Risk Tolerance
Investing inevitably comes with some risks but deciding your risk tolerance can make it easier when choosing the right investment plan for you. Not all investments have a huge return and most of the time riskier investments will get you the big bucks while low-risk plans have a much smaller profit. To find out your risk tolerance, you can ask yourself some simple questions. Firstly, are you able to take risks? This largely depends on your current income, loan payments, and other expenses. If you have a high income but just a few liabilities, you are most likely able to take risks. Secondly, do you need to take risks? This correlates to your financial goals of how much you would like to earn from your investments. If you need higher returns in a short span of time, you will probably need to take a risk. Lastly, are you willing to take risks? This is a personal decision that depends on your comfort level.
What should you invest in?
The big decision is deciding what type of investment to dive into and this should depend on the above factors. If you’re looking into an equity portfolio with high returns but high risks as well, stocks would be your best bet. If you’re looking to maximise your income and gain a medium to high profit, dividend-paying stocks are a possible investment option. If you prefer a low-risk plan for capital security, bonds can help with that.
However, investments don’t just stop there. There are also mutual funds, exchange-traded funds (ETF), and even real estate investments. Investing in property and renting it out can provide a steady income. As purchasing a property can be hefty, finding the best personal loan in Singapore is a viable option. Local banks provide such loans and once you’ve bought a home with these funds, you can then rent it out. However, even if you’ve managed to get the best personal loan deal, you need to charge a rent high enough that it covers your monthly mortgage loan while also collecting a profit. These are just some of the ways you can diversify your investment portfolio to ensure financial security and independence.
A bridging loan is a popular form of loan in Singapore that homeowners and investors look for. If you are looking to purchase a new home or investment property, here are some things you should know about bridging loans and how they can come in handy.
When should you get a bridging loan?
As the name suggests, a bridging loan is a form of loan that gives you the money you need to bridge the gap in your finances to make a payment. For example, you may require an urgent loan to cinch the deal on a property while waiting for sales proceeds from your current home or other investments. Most people who take out a bridging loan are usually homeowners upgrading their property from a HDB flat to a condominium or private housing, or investors looking to purchase a property while the price is right. These require considerably large down payments and a bridging loan can be an ideal option to help pay for their dream property even if they do not have enough cash on hand. Bridging loans are not just exclusive to private property buyers. They are also available to homeowners buying a HDB flat too. They are a great loan option for your property needs.
Factors to consider when applying for a bridging loan
1. Interest rate
Taking out a loan from a licensed money lender is often a wiser solution as they offer lower interest rates compared to banks or other financial institutions. There are many free-to-use platforms offering a wide network of licensed money lenders to their customers, to help them compare loans and find the best one for their needs. Besides being free and convenient to use, they also help to verify the legality of the money lenders in their network and ensure that their customers only engage with money lenders with positive reviews.
While every money lender offers different interest rates, make sure you shop around and look for competitive prices and packages to suit your needs. If you are looking for a reliable bridging loan with a lower interest rate, why not consider looking for one from a licensed money lender?
2. Flexible repayments
An important factor to consider is the monthly repayments. We cannot emphasize enough the importance of taking out a loan within your means. A bridging loan has its benefits but you will need to crunch the numbers and see if you are able to repay it on time. As a bridging loan is meant to help bridge the gap in your finances, do make sure that you are able to afford the repayments on top of the mortgage of your new home.
3. Loan amount
A bridging loan should finance only up to 25% of your property purchase and not the entire amount. Ideally, it should help you pay for the deposit or down payment while you wait for the sales proceeds from your current home. While urgent loans, especially personal loans, offer a lower interest rate with a longer loan tenure, you should only borrow the amount you need to bridge the financial gap and not take out more than what you need.
Ready to take the next step with a bridging loan for your dream property? Visit LoanHere to find out more.
Notorious Types of Scammers to Watch out for when Seeking Fast Cash loans
Have you ever bumped into a personal loan provider whose deal sounded straight out of an angel’s mouth? Maybe fell into a financial snare that ripped you off of your hard-earned money, just because you needed an urgent cash loan? You’re not alone. Year in year out, thousands of Singaporeans get nipped by the sharp claws of loan scammers. Cases of loan hoaxes are so prevalent in the Singapore cash loan market that it’s become harder and harder to separate the wheat from the chaff. To make it worse, loan scammers have a clear mastery for slipping in between identities and wearing different faces and personalities. So if you’re new to Singapore’s personal-loan space, this article peels off the masks of six common types of loan scammers you need to be wary about.
The mystery caller
Just like an agent on a mission, this one operates like a faceless man. They insist on strict phone communication and turn down any request to finalize the deal in person. Most, if not all of their loan offers are promoted via Facebook, email, SMS, or calls. Of course, they’re hiding something, and it’s not good. Keep in mind that Singapore’s laws prohibit lenders from marketing their products online or personally. So if you receive a mystery phone call from a personal number that’s promising you fast cash loans at crazy rates, don’t fall for it.
The Eager Beaver
We’ve all encountered this one. He is overly enthusiastic and acts with an impending sense of urgency. His frequent victims are desperate individuals who are in dire need of fast cash loans to fix emergencies. How they move from “Just take your time” to “this offer expires tomorrow, so you need to act fast” is um…suspicious. If you’re keen enough, you’ll notice that every minute you spend negotiating or asking questions drives them insane with impatience. This manic enthusiasm should raise an eye-brow because genuine, licensed lenders will never coerce you into taking their personal loans.
The One your Guts doesn’t like
Looking for an urgent cash loan in Singapore? Your gut is your most loyal ally. Somewhere along the way, you’ll meet a money lender that’s difficult to trust. The trust just isn’t there, and it will never be there. Maybe you spot some gaps in the loan contract, or their misdemeanor is telling. As soon as you smell that something’s off, just abort the mission.
The Proverbial Dumb and dumber
Of course, you’re bound to come across that one stone that isn’t blessed to become a diamond. The foolish scammer is the type who’s just beginning to learn his scamming chops. Their plot leaves behind obvious loopholes that you can use to bust them. But do you know what’s even more appalling about this scammer? It’s the fact that in their head, they’re smarter than everyone else. For instance, when you ask for the loan contract, they’ll give you a lengthy, incomplete document, hoping that you won’t read the whole thing. Or, they could even give you a fake physical address thinking you can’t use an address validation system to rat them out. In a nutshell, their scamming schemes are the equivalent of walking in mud and hoping you leave no footprints. The only victims they manage to dupe are those who are as intellectually challenged as they are. Or worse.
The Physically Enchanting One
Armed with suave looks and an endearing personality, their charm will lead you to the gallows. Startling in their outward appearance and inward charm, this type will use their pleasant qualities to bait anyone looking for an easy cash loan. These will go the extra mile of showing up at your doorstep to lure you into their fast cash loans. Resist.
The Computer Wizard
This scammer is more cunning than the rest because he actually knows what he’s doing. Their mastery of tech is out of the ordinary borrowers’ grasp, hence many people fall into their trap. Among all the arrows in their quiver, their two favorites are phishing emails and scam DMs. For instance, you might receive a loan advert via SMS, featuring a website link. On clicking the link, you’ll be led to a site that’s a replica of a licensed lender’s site. The ensuing events will involve being convinced to make an upfront payment before approval or refund $800 once $500 is relayed to your account. But here’s the catch- the $500 will never be relayed to your account. However, even “smart” scammers can be smoked out. Look out for links to fake websites, spelling errors in website addresses, and any impersonation attempts of licensed moneylenders.
To avoid getting scammed in the process of acquiring an easy cash loan, stick to licensed money lenders.
Personal loans – does it have a negative connotation when it comes to mind? Well, it is no surprise that people often associate the word ‘loan’ with poor financial management, but we are here to change that mindset. When used correctly and responsibly, personal loans can be a useful solution to help you take charge of your finances especially during emergencies.
With rising costs of living, we might inevitably stumble upon unexpected situations in life that may require immediate financial assistance. Crises such as medical emergencies would require a sum of cash pronto. In times like this, a personal loan can be a viable option for you.
What are personal loans?
A personal loan is typically a type of unsecured loan that can be customized to fund any of your needs such as your medical bills, home renovation, education, wedding expenses and so on. An unsecured loan means that you are not required to put up any form of collateral to secure funds, which is good news because it means less risk for you. Regardless of your situation, a personal loan can be a viable short-term solution to get access to a sum of cash.
Here are the 3 different types of personal loans in Singapore to help get you started on this journey should you ever require a personal loan.
Personal installment loan
A personal installment loan, or a term loan, is a sum of money that you can borrow from a bank or licensed moneylender in Singapore. The loan name varies across different banks and moneylenders, but the principle is the same. It is one of the most common and flexible types of personal loans you can find in the market.
A personal installment loan can be repaid in fixed installments, typically up to 60 months, depending on the financial institution, and may include a one-time processing fee ranging from 0% to 10% of the principal amount.
Personal instalment loans are useful in situations such as medical emergencies, in an unforeseen circumstance where a huge sum of money is required.
Personal line of credit
A personal line of credit is a type of personal loan that allows you to withdraw loans within a credit limit. This loan is often regarded as “standby cash” as there is no repayment penalty and the approval rate is fast.
The financial institution would first determine the limit in which you can borrow from your line of credit. You will only be required to pay interest on the amount and the duration that you have borrowed and are not obliged to pay anything else until you decide to borrow from your lender again.
Unlike a personal loan, the repayment term of a personal line of credit is open-ended and the interest rate can vary. It also comes with an annual processing fee that renews yearly.
Balance transfer
The third type of personal loan is called a balance transfer. It is used to help reduce interest rates of different loans and is a great option for the borrower to consolidate their outstanding debt into a single account with a fixed interest rate. It provides the borrower with a pre-determined interest-free period that they can use to pay off their existing loans.
Usually, there is a one-time processing fee ranging from 1.5% to 5.5% and up to 12 months for borrowers to pay off their debts without incurring any interests during this period. If there is still balance left after the interest-free period, additional interest fees may be incurred on the remaining payment.
It can be a great way to pay off outstanding debt within a short period if you are confident that your cash flow will improve and that you can repay your debt as soon as possible.
Bad credit history
Employed
