Category: Personal Loan

Life happens, and sometimes you may be stuck in a rut when faced with an emergency, requiring a large sum of cash that you don’t readily have. Sometimes, you may also need a better money-saving alternative to high-interest rate credit cards for a big-ticket expense. 

Instant personal loans in Singapore can help you to save money when used responsibly. Different personal loans can be used for various purposes, such as renovating your house, paying off your student loans, taking out a new mortgage, planning a wedding, and so on. While loans are usually tied to a specific purpose, the beauty of personal loans lies in their flexibility and attractive personal interest rates. Find out how instant personal loans can be a great option to help you save money.

When should you use one?

Before taking out any type of loan from a bank, financial institution or legalised money lender in Singapore, always ask yourself if you can repay it. Instant personal loans are best used for purchases that you intend to repay in less than 5 years so that you don’t risk accumulating debt. You can easily find a personal loan promotion in Singapore which you can use to fund a one-time big expense. There might come a point in time where you may require a huge amount of cash for emergencies such as medical expenses or even personal milestones such as a wedding or home renovation. 

Since personal loans are used at your discretion, you must know how to repay a personal loan in the shortest time possible through a detailed, reliable repayment plan. This can help you save up some cash for a rainy day while still being able to pay off your debt at a lower personal loan interest rate compared to other money lending options.

Debt consolidation loans

A debt consolidation loan is one of the most popular and smartest instant personal loans you can use to pay off existing debt. It can help you pay off high-interest credit card debt with a lower personal loan interest rate. As our financial commitments pile up, it can be tricky to keep track of the various types of loans we have. Using a debt consolidation loan to combine your different debts into a single payment can help make repayment more manageable and stress-free for you. It would be a good option to consider especially if you are already in debt.

Of course, this is assuming that you do use an instant personal loan wisely to pay off your debts and not as a tool to postpone or accumulate them further. 

Ditch high-interest rates

Another way a personal loan in Singapore can help you save money is that it can absorb a higher interest loan with a lower interest one. If you have a good credit score, you should have no problems obtaining a lower interest rate compared to your credit cards or other money lending options.

If you qualify for a lower personal loan interest rate, make sure you can repay the loan over the stipulated repayment period to save on interest rates and help you clear your debts quickly.

For example, if you have an existing $10,000 debt with an interest of 12%, having an instant personal loan with 4% interest would help you pay off this debt at a lower interest rate, thus allowing you to save more as you would be paying less than half the original interest rate.

The bottomline of using a personal loan in Singapore to refinance your debts is that it can help you save more money if you manage to secure a lower personal loan interest rate. It can also help you fund big-ticket expenses during emergencies that you can comfortably repay over a period of time.

About the Author

Clio Goh

Armed with years of experience crafting content for brands and companies across industries, Clio is ever-passionate about putting out top-notch, well-researched personal finance pieces that seek to educate.

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. When used right, a personal loan can save money and even improve your credit score, provided that you repay the loan in a timely manner. 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, different personal loans can be viable short-term solutions 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.

1. Personal installment loan

A personal installment loan, or a term loan, is a sum of money that you can borrow from a bank, financial institution, or a legalised money lender 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.

2. 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.

3. 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.

About the Author

Clio Goh

Armed with years of experience crafting content for brands and companies across industries, Clio is ever-passionate about putting out top-notch, well-researched personal finance pieces that seek to educate.

Amid the hustle and bustle of life, there might come a point in time where you may need some extra cash to tide through a month or two. Sometimes a personal loan can come in handy when emergencies occur. For first-timers applying for a personal loan, just the thought of applying or searching for the right loan may be daunting. Fret not, we have here some dos and don’ts to guide you through your first personal loan application.

Do’s

1) Get your facts right

Before applying for a loan, it is important to do thorough research on the type of loans that best suit your needs. There are many types of personal loans out there for various purposes such as a debt consolidation loan for consolidating debts, a renovation loan for revamping your home interiors, a medical loan for paying hospital bills and so on. Personal loans can either fall under “secured” or “unsecured” categories depending on your needs and repayment ability.

 While every moneylender has their packages and interest rates for secured and unsecured loans, you should familiarize yourself with the types of loans available in the market and your ability to meet specific credit criteria. This would help you make more informed decisions when applying for a personal loan to meet your needs.

2) Survey the market

The difference between a licensed and unlicensed moneylender makes a world of a difference, so does a low interest rate and a high interest rate. Finding the cheapest personal loan in town may not always be the best deal, you might be dealing with an illegitimate lender. You should always do proper research and background checks to make sure that you are dealing with a licensed private money lender in Singapore. Surveying the market for competitive interest rates would help you save on forking out extra in interest rates over time as well. It pays to do your homework.

3) Read, read, read

Understanding the different types of loans and interest rates is just as important as reading the fine print on your loan application. Always go through the fine print in detail to check for hidden or additional administrative fees and so on.

Don’ts

 1) Not checking your finances

 For many first-time loan applicants, it is easy to fall into the trap of taking out a loan amount beyond your means. We do not recommend taking out a huge loan just because you think you can afford it. A loan payment may seem manageable at first but you may run into unexpected circumstances such as losing a job or incurring emergency medical expenses. Overborrowing can be dangerous as it might lead you to an even greater debt.

 For first-timers especially, before applying for a loan, make sure to check your financial health and account for any existing debts and rainy days to avoid taking out a loan that is not within your budget. When in doubt, you can always consult potential moneylenders to put together a plan for your loans.

2) Making late payments

 This is by far one of the biggest mistakes a first-time loan applicant can make. When you take out a loan, you will have to pay both the principal and interest back to the lender. First-time loan applicants may overlook the fact that interest rates can accumulate over time, especially when payments are late. To avoid this mistake, schedule automatic withdrawals or reminders to pay your loans on time. Your pocket will thank you later.

 Taking out a personal loan for the first time doesn’t have to be scary. With these tips in mind, go forth and search for the best loan suited for your financial needs. When in doubt, our team of experts is always ready to help at Loan Here.

About the Author

Clio Goh

Armed with years of experience crafting content for brands and companies across industries, Clio is ever-passionate about putting out top-notch, well-researched personal finance pieces that seek to educate.

Readers, wouldn’t you agree that life is unpredictable? It’s so unpredictable that one day you’re on top of the world, living comfortably and the next, you’re weighing your options to get out of a temporary monetary hiccup. In fact, many folks face financial setbacks due to the economic crisis that was triggered by the Covid-19 pandemic.

Fortunately, the lending industry in Singapore acts as a saving grace for many Singaporeans and permanent residents for a multitude of reasons. But what could those reasons be, you ask? Well, get comfortable as we share with you the 10 most common reasons why people apply for personal loans.

#1 Going Back To School (Education Loan)

Going back to school is always an advantageous decision as it will surely benefit your career growth in the long-run, especially if your career field gives you the option to specialise in a certain area. But, if you’re short on savings, you might be inclined to put this dream on hold. Fret not! A personal loan, from banks, private money lenders or financial institutions is the practical solution to help cover your tuition fees. In fact, did you know that you can get a personal loan with no income proof? As a student in need of extra funds, this lets you put aside your worries and focus on your studies instead. So, if you’ve been putting your dreams of furthering your education on hold, here’s your chance with a study loan.

#2 Walking Down The Aisle (Wedding Loan)

Weddings don’t have to be extravagant, but it can certainly be costly! Did you know that the average wedding cost in Singapore is between SGD30,000 and SGD50,000? Just ask any married couples within your circle of families and friends. Luckily, wedding loans have made it possible for both Singaporeans and permanent residents to wed the love of their life in a ceremony or banquet of their dreams.

#3 Improving Your Humble Abode (Renovation Loan)

It’s always exciting to come home to a home that is infused with your personality and lifestyle — furnished and decorated just the way you like it. That is, before you notice the cost you’ll incur to creating your dream home. Don’t worry; banks and licensed lenders have made it possible for you to design your dream via renovation loans… so long as you’re 100% confident in the design of your upgraded and improved home.

#4 Seeking Medical Attention (Medial / Surgery Loan)

Medical treatment is expensive and let’s not get started on the cost of surgeries. However, some advanced or specialised medical treatments and surgical procedures are necessary, especially if you’re diagnosed with long-term illnesses or sustained severe injuries. But, before you go wide-eyed and sigh over the estimated cost, take comfort in the fact that medical loans have made it possible for Singaporeans and permanent residents to seek medical treatment in Singapore.

#5 Investing In Properties (Investment Loan)

Have you been eyeing a property that your gut-feeling knows has immense money-banking potential, but lack the funds to move forward with the potential? Well, don’t lose hope just yet! An investment loan can be used for any type of real estate investing purposes, whether it’s commercial real estate or residential. So, now that you know a personal loan can help you secure the property, all that’s left to do is to take a sip of coffee and pen out your investing strategy.

#6 Selling or Buying A House (Property Bridging Loan)

Speaking of properties, did you know that a personal loan in Singapore can totally help you ‘bridge the gap’ if you find yourself short in cash to buy a new house and sell your old home? In fact, the loan is designed specifically to offer homeowners a short-term loan to help them secure their second property while they secure a buyer for their existing home, even if you’ve already have a mortgage. Basically, this bridging loan allows homeowners to traverse the gap between buying and selling legally.

#7 Keeping Your Business Afloat (Freelance Loan)

If you’re a business owner, then you’re probably aware how challenging it can be to keep your business running, especially while the pandemic is still at large. For some business owners, they would relish on the opportunity to pay the payments of their suppliers and the payroll of their employees rather than tightening the belt around their waist. How? Why, through personal loan, of course! Whether you take out a loan with banks, licensed lenders or financial institutions, personal loans have made it possible for business owners to keep their doors open. In this case, it’s through the power of freelancer loans.

#8 Covering The Costs of Your Vehicles (Private Hirer Loan)

Any Grab, Gojek or private drivers amongst us? We totally understand that the cost of maintaining your vehicles can be expensive, especially if you’re working as a private driver or running a hire driver business. Thankfully, private hirer loans like a Grab loan exist to offer you some relief should you find yourself scratching your head to fork out the necessary funds to maintain your vehicles. With a personal loan, you’ll never have to worry about your vehicles being late for maintenance.

#9 Managing Your Debt In A Breeze (Debt Consolidation Loan)

Let’s be honest, managing multitude debts with different payment dates can be a hassle. A practical solution to your problem is applying for a debt consolidation loan! Thanks to the personal loan, all your debts will be streamlined, which makes it that much easier for you to keep track of your debts as well as making payments. In doing so, you will never have to worry about late payments, forgetting any debts, or not being able to repay your loan on time.

#10 Streamline Your Credit Card Debts (Credit Card Consolidation Loan)

Like a debt consolidation loan, a credit card consolidation loan is used to pay off your credit card balances along with its high interests. This means that instead of making multiple credit card payments every month, a personal loan will help you make a single payment. Now, wouldn’t that make life much simpler?

Thanks to personal loans via banks, licensed moneylenders and financial institutions, personal loans have undoubtedly helped many individuals and businesses. So, if you’re looking for a little extra cash (for the right purposes!), then don’t write off personal loans.

About the Author

Drawing on 3 years of proven knowledge and counting, LoanHere has grown to become one of the go-to platforms for consumers’ diverse loan needs. Besides ensuring borrowers get their loan quotes promptly from the best private loan providers in Singapore, we also make an effort to craft well-founded blog articles focusing on loans, finance, and lenders.

Personal loans have become very common among Singaporeans as it is a fast and easy way for an individual to get a lump sum of money to support their needs. In 2020, nearly one in three Singaporeans had applied for personal loans to cover their cost of living which include buying daily necessities and paying their rent due to the financial impact of the Covid-19 pandemic. These were the reasons given by nearly sixty percent of Singaporeans that applied for personal loans. Personal loans can be helpful to Singaporeans with business ventures, living costs or in any emergency situations as personal loans can be approved within a week and in certain cases as quick as a day.

#1 Purpose of Loan

There are many pros and cons to consider when applying for a personal loan in Singapore. As a Singaporean, the eligibility requirements for a personal loan is to be above 21 years of age and to have a minimum annual income of $30,000 for banks, and to be above 18 years of age and have an annual income of $20,000 for private money lenders.

The first thing to consider is the purpose of applying for a personal loan. Some positive uses of a personal loan are paying medical bills, repairing household appliances, covering emergency costs and debt consolidation.

Meanwhile, taking up a personal loan for the purpose of extravagant weddings, luxury holidays and items are some purposes that are best to stay away from. Nevertheless, it is always advisable to take two steps back and thoroughly consider the purpose of the loan.

#2 Duration of the Loan

Most personal loans are used as a short term fix and this should be a factor when considering the duration of the loan, the interest rate and the amount that you are applying for. It is important to keep these factors in mind as it will subsequently impact our income, commitments and dues. The duration should be carefully considered when applying as it could have a large financial impact in the future which is why you are always advised to consult with a financial consultant before making a decision.

#3 Best Time to Apply Loan

When is the best time to apply for a personal loan in Singapore? You should factor your current financial position, your credit history and your credit score. All these factors will play a part in deciding whether you can get the full amount that you applied for. Other than those factors, you need to look at what the money from the personal loan is going to be used for such as medical emergencies, daily necessities or for business.

Other than these factors, the economy of the country also plays a big part as the interest rate and the availability of personal loans will vary depending on the situation of the country. If the economy of the country is bad, the interest rate will increase and the availability of personal loans will decrease and vice versa if the economy of the country is stable.

#4 Interest Rates

The next thing that you should consider is the banks’ and money lenders’ interest rates for personal loans. Personal loans in Singapore are known for having high interest rates because it is an unsecured loan and it is not bonded to any collateral and any other of your physical possessions such as your car or house are not at risk.

There are many options of organizations that we can apply personal loans from and we should consider all options as some may have a lower interest rate compared to others and some organizations also offer discounts and promotions such as not needing to pay the first 3 months of interest rates when applying for a loan.

Other than the interest rates and promotions that come when applying for personal loans, we should also consider the hidden costs such as report costs, appraisal fees and administration fees.

#5 Repayment Period

The repayment term of your personal loan shouldn’t be long term as the total amount of the interest rates will increase if the repayment term is longer. Other than the repayment term, you can also adjust the repayment amount and arrange for yourself to pay a larger amount on a monthly basis to reduce the repayment term of your personal loan. You should also avoid late payments as the penalty will ultimately end up increasing the repayment amount of your personal loan. So, always remember to repay your loan on time.

#6 Credit Score and Financial Situation

The main factor that you should consider is your credit score and your current financial situation as this plays the biggest part when applying for a personal loan. Taking personal loans will help in increasing your credit score if you are able to pay back your loans on time. This will help for your personal loans to be approved in the future because of your positive credit score.

A positive credit score helps you bring trust between yourself and financial organizations as these organizations will approve your loans based on your credit score. A lot of Singaporeans have bad credit scores because they have never applied for a loan or because they have proven that they are not capable of paying back their loans and taking a personal loan which is a short term loan can be an easier way of increasing your credit score.

Other than considering how a personal loan will affect your credit score, you should also consider your current financial situation and we should make sure we meet all criteria such as having the minimum annual salary requirements and that you have a fixed income to make sure that you are capable of paying the loan back on time.

#7 Consider Other Options

Other than applying for personal loans, we should also consider other options as it may have a negative impact on your credit score if you don’t manage to pay back your loan payments on time. Other options that you can consider is to borrow money from family and friends as this will not have an impact on your credit score and you are borrowing money from people who trust you.

In conclusion, there are many factors that come into play when you apply for a personal loan that could have a positive or negative impact for yourself when applying for credit loans in the future.

About the Author

Drawing on 3 years of proven knowledge and counting, LoanHere has grown to become one of the go-to platforms for consumers’ diverse loan needs. Besides ensuring borrowers get their loan quotes promptly from the best private loan providers in Singapore, we also make an effort to craft well-founded blog articles focusing on loans, finance, and lenders.

Undoubtedly, the Covid-19 pandemic opened a Pandora’s box of economic and financial problems that impacted economic growth and threatened livelihoods. As the pandemic rampages on, triggering further pay cuts, and job losses, it is only natural for some people to turn to personal loans to pay their dues or to keep their business open. In fact, borrowing money has been proven to offer a number of benefits, such as tax benefits as well as teaching borrowers money management skills. The real question is, however, where can we apply for a personal loan in Singapore? So, get comfortable as we share with you several avenues to apply personal loans from, and how they compare:

Banks

Naturally, banks are the common go-to sources for personal loans as they are bounded by the law, governed by, and operating according to legal standards. In fact, banks are known to lighten borrowers’ financial woes through personal loans, as such a loan will enable applicants to use the money for personal matters such as paying for their children’s education. More than that, banks have also enabled entrepreneurs to kickstart and build their business that contributed in the facilitation of economic activity.

Evidently, though, disadvantages of borrowing from banks do exist. One of the major downsides of applying for personal loans with banks is that the applicant needs to have a high credit rating, on top of having a minimum annual income of SGD20,000. Even if the bank approves the personal loan, it will subsequently impact the borrowers’ credit ratings, especially when repayments are delayed or defaulting personal loans. This, in turn, will impede future borrowing possibilities as well as chances of getting favourable rates in the future.

With such risks, it is no wonder that some are hesitant to turn to banks for financial aid. Thankfully, they are not the sole legal avenue when applying for loans in Singapore.

Licensed moneylenders

While banks typically extend loans to Singaporeans and permanent residents (PR) who bank in an annual income of at least SGD20,000 coupled with a good credit rating, private money lenders are more likely to approve personal loans, even with a less-than-stellar credit rating. This is due to the fact that licensed moneylenders offer a more flexible loan amount. Additionally, licensed moneylenders in Singapore are registered under the Registrar of Moneylenders. This entails that licensed moneylenders are legally required to adhere to the interest rates, the type of fees they can charge, as well as maximum amount they can lend to borrowers that have been stipulated by the Registrar.

Speaking of legal outlines, borrowing money from licensed moneylenders will guarantee borrowers a harassment-free repayment period as they are legally required to adhere to the strict rules that have been outlined by law. Therefore, licensed moneylenders will do their utmost best to ensure a legal, safe, and secure loan process on top of offering expert advice on how to manage your monthly finances properly as well as repayment plans that are tailored to fit every borrower’s financial situation.

There is no denying that applying for loans from licensed moneylenders is convenient with a simple application process. However, unscrupulous individuals, such as illegal moneylenders, are notorious for using the license numbers of registered moneylenders to trick woeful borrowers to fall for their loan scam. Speaking of loan sharks…

Illegal lenders

It cannot be denied that, for some, illegal lenders represent a viable channel for borrowing money, and speed and convenience are some factors why some turn to such sources, like loan sharks or “ah longs”, when they apply for personal loans in Singapore. However, what often slipped the minds of many are the risks involved that make illegal lenders an avenue that should never be considered. First and foremost, it should go without saying that borrowing money from illegal lenders is, well, illegal! Then, there is the fact that loan sharks charge high penalty fees, high repayment amounts in a short period, on top of high interest rates with no cap, which will contribute to high stress levels and pressure experienced by the borrowers.

What sets loan sharks apart from licensed moneylenders is the manner in which they conduct their business. While banks and moneylenders are legally obligated to adhere to the law, standards, and requirements that have been outlined by regulatory bodies, and the government, loan sharks often resort to harassment, intimidation, and threats. In worst case scenarios, loan sharks turn to illegal means or violence to recover the debt.

In fact, Channel News Asia reported that illegal lenders have resorted to aggressive tactics to push forward their loansharking activities, especially when the pandemic is still at large. To top it all off, Neighbourhood Police Centers indicated that loan shark harassment cases negatively impact a residential area’s value as well as threaten the safety of the neighbourhood. Therefore, it needs to be emphasised that borrowing money from loan sharks pose a threat to our families, and potentially our neighbour.

With that thought in mind, it is monumentally important for potential borrowers to check with the Registrar of Moneylenders in Singapore to ensure that the moneylenders are licensed and registered. One of the tell-tale signs of a loan shark include doing business without a contract; operating without a legal license number or an office; and offering huge amounts of money to lend.

About the Author

Drawing on 3 years of proven knowledge and counting, LoanHere has grown to become one of the go-to platforms for consumers’ diverse loan needs. Besides ensuring borrowers get their loan quotes promptly from the best private loan providers in Singapore, we also make an effort to craft well-founded blog articles focusing on loans, finance, and lenders.

If you ever find yourself in a difficult financial situation, chances are you would want a personal loan immediately. However, if you do not have proof of income in your bank statement, income payslip or your CPF statement, it may be harder for you to get a personal loan.

In this article, we will show you some friendly tips on how to get a personal loan even without an income proof.

Many factors are taken into account on how much you can get in Singapore. They include the loan provider, income, interest rates and tenure of the personal loans you have selected.

Loan provider

In Singapore, there are 2 main types of loan providers which provide personal loans as legal financial institutions. Banks and legalised money lenders in Singapore are the legitimate loan providers of personal loans.

Banks

Among the popular places to borrow money from are banks. They disburse personal loans to borrowers on a daily basis, under the watchful eye of the Singapore’s regulatory body, MAS.

Banks are able to offer you a loan amount that is large enough to cover most of your financial expenses. Their loan packages are attractive to help you tide over your financial difficulties within some short period of time. However, there is a catch to this. Strict eligibility requirements accompany the loans.

Normally, under the Singapore context, if your annual income falls below $30,000, you won’t be able to apply for a personal loan from a bank. This happens generally unless there are other conditions, such as giving you a personal loan with a higher interest rate, even if your salary doesn’t meet expectations.

Since it is rather cumbersome to try for a personal loan from a bank due to such strict criteria, the other alternative would be to get a personal loan from a licensed moneylender.

Licensed moneylenders

Another viable option is to consider borrowing from licensed moneylenders. They are not the same as loan sharks who disburse loans illegally with forever skyrocketing interests. These moneylenders fall under the jurisdiction of MAS in Singapore. You can find them in the list of authorised lenders.

Loan amount

The amount of personal loan you can obtain depends on how much you earn annually.

If you earn less than $20,000 annually, you can only get a loan extended to up to $3,000.

But if you earn more than $20,000 annually, you can borrow up to 6 times your monthly income.

On the other hand, if you take personal loans from banks, you can only borrow up to 4 times your monthly income and yet go through a lengthy process of approval.

Interest rates

Licensed moneylenders are unlike unlicensed ones that can charge exorbitant interest rates that go well past the roof.

Licensed money lenders’ interest rates are chargeable at up to 4% per month in Singapore. They can only charge up to a maximum of 4% interest per month.

As licensed moneylenders have to strictly abide by the regulations enforced by the Ministry of Law, it is assured that they do not go wishy washy in their interest rates rules.

Loan approval

It is easier to obtain a loan approval from licensed moneylenders than from banks. Generally, they are more lenient. When you apply for a loan, the licensed moneylenders tend to focus more on the ability to repay the loan than on your credit score. This leads to a higher chance that you might get your personal loan approved on first take.

The licensed moneylenders also customise their loan products according to the financial capabilities so that the loan tenure, interest and repayment are made more manageable.

What documents you need to obtain a personal loan

Since you’ve already noted the requirements for getting a personal loan in Singapore, you should take a closer look at the personal documents needed for application.

Identity card (NRIC)

If you are a Singapore citizen or permanent resident, you need to show your NRIC.

If you are a foreigner working in Singapore, you need to present your passport and employment pass.

Proof of income

The salary statement proof is needed to determine how much you can borrow at the maximum. With the interest rates together, you’ll need to calculate your repayment obligations.

Generally, with a higher salary, you’ll be able to obtain a higher principal loan amount with a lower interest rate.

Your income proof can be shown in 2 ways: CPF statement or payslip.

CPF statement

By using your CPF statement, you can show them your past 12 months contribution history to show the company name that does the transactions. This is to show the job changes, if any.

Your duration in the company may affect your ability to take the loan.

Moreover, as there is a cap on how much of your income is transferred to your CPF account, you may consider the payslip as another alternative if your salary is significant and you wish to obtain a larger amount of loan.

Payslip

Your payslip can be used as income proof. Most licensed moneylenders need you to submit 3 months of your payslips which you can get from your online HR portal or from your HR department.

With no income proof, can you still get a personal loan in Singapore

What if you don’t have a CPF contribution statement or a payslip as proof of income? Are you still able to get a personal loan in Singapore? The answer is technically yes.

You can still use other documents to make up so as to prove your ability in getting the loan and making repayments for it.

An example for this is that if you’ve just begun your job and have not gotten any CPF contribution. For this case, you can use your employment letter to support your loan application.

In some cases, you might not be able to show your payslip due to the nature of your job or company management.

They may include the following but not limited to:

• Self employed, including taxi or private hire, such as Grab driver
• Freelancer
• Worker paid in cash
• Contract staff

An employment contract or letter of offer will be sufficient in such situations.

Alternative documents

Licensed moneylenders still need some documents to ensure you’re able to repay the loan. Here are some of the examples:

Income tax statements

Your income tax statements can be used as income proof. Sources of income which are taxable include:

• Employment
• Business ventures
• Investments
• Rental income

Even if the income sources are non taxable, they can still be used as proof. If you provide the taxable and non taxable income sources together as proof, you can even increase your chances of getting a loan approval. The alimony and foreign sources of income are examples of non taxable income sources.

Notice Of Assessment (NOA)

Your NOA shows your taxes paid for the year and it shows your chargeable income and other taxes paid. To retrieve your NOA, simply log into IRAS portal with your SingPass details.

Employment contract or letter of offer

If you’ve become employed recently, you may not have CPF contributions immediately, or even your payslip. Hence, you can’t show them as proof.

In such instances, some licensed moneylenders will accept your employment contract or letter of offer as proof.

You have to ensure that your document shows the following:

• Company letterhead
• Date of commencement
• Full name
• Salary details
• Date of letter
• Signatures

Healthy credit score

Another way to be granted a personal loan quickly and easily is to have a healthy credit score. It is very helpful in increasing your chances of getting one.

This is because a healthy credit score will show the financial institutions how creditworthy you are.

Several factors can affect your credit score greatly:

• Recent credit
• Utilisation pattern
• Credit account history
• Available credit

Bad credit scores range from 1000 to 1700. If your credit scores fall within this range, you’ll most likely default on the loans you took. This will lower your chances of getting future personal loans.

Low credit scores can be caused by factors such as:

• Inability to make payments to credit card bills on time
• Short credit history
• Having many credit facilities such as credit card loans or other unsecured personal loans at the same time

So if your credit score has been affected by past financial difficulties, here’s how you can improve your credit score:

• Don’t take too much credit
• Don’t overuse your credit card
• Reduce your loans
• Don’t apply for loans within a short frame of time
• Check your credit report regularly

How to apply with LoanHere

To obtain the best personal loan for your needs, apply with LoanHere.
We have a fast and efficient process of streamlining your loan application process. This allows you to get your personal loan application within only a few minutes of your time.

All you need to apply is your NRIC and SingPass, which can pre fill your details automatically. This saves much time for you especially if you have a CPF contribution because that would save your effort in submitting your income proof.

Apply with us now if you need a personal loan immediately.

About the Author

Drawing on 3 years of proven knowledge and counting, LoanHere has grown to become one of the go-to platforms for consumers’ diverse loan needs. Besides ensuring borrowers get their loan quotes promptly from the best private loan providers in Singapore, we also make an effort to craft well-founded blog articles focusing on loans, finance, and lenders.