Your Ultimate Guide to the Best Personal Loans in Singapore

If you are looking for a low interest rate personal loan to tide you over a rough financial patch, you should at least be well verse and informed of what you’re getting yourself into.

Learn what a personal loan is used for
Understand the steps to apply and compare the best personal rates in Singapore
Know the difference between a bank and a moneylender

What is a Personal Loan?

A personal loan is properly defined as a loan that is disbursed into a borrower’s personal bank account. This is not to be mistaken with other loans typically associated with it such as an auto loan or a renovation loan. The two mentioned are loans that are paid directly to the car dealer and contractor and not into the personal bank account. As such, auto loans and renovation loans are not appropriate for business use as there is no flexibility in its usage.

What can a personal loan be used for and what are its benefits?

Flexible Usage

One thing great about personal loans is that it is not restricted in its use but the most common usage are:
Family Emergencies
Medical Emergencies
Wedding Expenses
Vacation Expenses
Household Furnishing
Honeymoon Expenses
Credit Card Bills
Educational Expenses
Fund a Start-up
Make an Investment


Fixed Interest Rates Up to 5 Years
Fast Availability Within 24 Hours
No Need for Collaterals
Lower Interest to Credit Cards

Here’s Why You Should Fund Your Start-up Dream with a Personal Loan

Enjoy Lower Interest Rates

As new companies are often subject to high interest rates from alternative lenders (3-4% per month). Personal loans rely on your annual income and can go as low as 5-6% p.a. If you have collaterals, they can even be as low as 2-3% p.a.

Enjoy a Higher Quantum

Business loans are disbursed at a proportion of your revenue which is negligible for a start-up or pre revenue company. However personal loans are provided at a multiple of your monthly income. This can stretch up to 8x for some banks which can be a good boost for your business.

Reduced Administration

A personal loan is one of the fastest loan. Reduce the need for administration with a business loan which entails, monthly reporting, provision of financials and bank statements etc. With a personal loan all information required are often already captured through MyInfo with no documentation required.

The Classic Personal Loan

Here’s a classic path to your best personal loan

It all starts with your income

Depending on your annual income, you may be entitled to a loan quantum that is a multiple of your monthly income. See table.

As you can see, banks in Singapore only serve the segment earning more than $30,000 a year and can lend up to 8 times your monthly income. Thus, anyone earning less than S$30,000 can only borrow from a licensed moneylender.

Individuals earning S$20,000 to S$30,000 are best served as they can borrow up to 6x of their monthly income. For individuals with no declared income, or income lesser than $20,000, the maximum loan they can obtain is S$3,000.

Maximum Loan Quantum

Annual Income
Licensed Moneylender
< $20,000
Max S$3,000
S$20,000 - S$30,000
> S$30,000
> S$40,000
> S$120,000

Second, your Credit Bureau Score

The second most important thing that many lenders see is your Credit Bureau Report. Here’s a quick guide to understand your credit bureau report.

While there are many things to look at the report, the 3 things that can determine your eligibility are:

1. Overall Grade
2. Presence of default or bankruptcy
3. Absence of score

How to Check Your Credit Score in Singapore?

To check your credit score, you’ll have to generate a credit report from the Credit Bureau Singapore (CBS).

You can either:  
1. Request for a softcopy online or  
2. Request for a hardcopy at SingPost outlets, the CBS office or CrimsonLogic Service Bureaus

Price: S$6.42 (incl. GST) + S$2.00 for multiple delivery modes.

You may collect your report within 2 hours at any SingPost outlet for an additional administrative fee of S$17.12.

Licensed Moneylender
Overall grade
Min DD and above
No restrictions
Presence of default of bankruptcy
Not eligible
Absence of score
Typically not eligible
No restrictions

Third, interest rates

As you can see, banks present a significantly cheaper option with rates ranging from 6-8% p.a. (EIR). Licensed money lenders on the other hand charge monthly interest rates and can go up to 4% per month. This is a upper cap regulated by Monetary Authority of Singapore (MAS).

Licensed Money Lender
6-8% p.a. (EIR)
1-4% per month
1.5% processing fee
2.5 - 10% processing fee

Understanding Interest Rates

When comparing personal loans in Singapore, you may have realized that each loan has at least two different interest rates.

Effective Interest Rate (EIR)

The effective interest rate, or EIR, must be stated alongside the advertised rate in Singapore. This includes processing and other costs, as well as the specifics of your repayment plan. In a nutshell, EIR displays the personal loan's "actual" interest rate as it takes into account the compounding of the interest as you make your repayment.

Annual Percentage Rate (APR)

The yearly interest earned by an amount charged to borrowers or paid to investors is referred to as the annual percentage rate (APR). APR is a percentage that indicates the real annual cost of money for a loan or investment over the period of the loan. This includes any fees or other expenditures incurred throughout the transaction, but does not include compounding.

Lastly, figure the tenor.

Licensed Moneylender
Up to 5 years
Up to 24 months

One of the greatest benefits of banks is that they can lend for an extended tenor up to 5 years which significantly reduces your monthly instalments. As for moneylenders, because interest rates are almost 3-4x, it seldom makes sense for a loan past 2 years.

In summary,

The choice between banks and licensed moneylenders is not entirely obvious for personal loans as there is a gap that money lenders are able to fill that traditional banks cannot. While banks are the preferred choice in most scenarios, here’s 3 scenarios you want to go with a money lender.

Your income is less than $20,000

Licensed moneylenders can provide loans up to $3,000

You do not have a good CBS record

As long as you are not in default, licensed moneylenders are still open to providing credit

You need a larger quantum but earn less than $40,000

While most banks can only extend up to 2 times, licensed moneylenders can lend up to 6 times your monthly income

Tip: Apply for a personal loan while you are still on payroll

How To Apply

You can decide to apply it directly through each individual banks and moneylenders or you can apply it through Lendingpot to compare across multiple personal loan lenders online.

Why get your personal loan through Lendingpot?

A team that will support you

We have a dedicated team that will walk you through your entire loan process and help you do the market research you need.

We let Lenders compete for your loan

Be ready to be spoilt for choice when we help you compare the best rates across all banks and non-banks so you only get the lowest interest rate and the highest cash out amount. Our rates are same as what the banks can offer or even better.

It’s FREE! Plus get rewards!

We do this entirely without cost to you. However our lenders pay us a referral fee to let them compete and win your business. Hence, you can be assured that our advice is unbiased and true to you. Additionally, we give rewards to our members when they get a loan as a way to share our joy.

Frequently Asked Questions

Am I eligible for a personal loan?

The ultimate loan approval is always contingent upon the internal regulations, procedures, and eligibility standards of each loan source. As a result, it is challenging to determine your eligibility for a final loan prior to utilizing our application form. We boost your chances of acquiring a loan by working with several banks and financial institutions; even if one bank rejects your application, you still have a strong chance of getting accepted by others. 

However, in order to apply with Lendingpot, you must meet these minimal requirements: 
• You must be between the ages of 18 and 70 
• You must have a monthly salary of at least $1,200. 
• You must be a Singaporean with a salary, a PR, or an EP holder.

Can I reject a personal loan offer?

Absolutely.Your application carries no obligation, and you are free to reject any and all of the offers made to you. Please give us a try!

How much personal loans can I take up?

This is based on your yearly income. In Singapore, banks allow you to borrow up to eight times your monthly income and licensed moneylenders up to six times your monthly wage.

What are the interest rates available?

The loan conditions, such as interest rate, duration, processing charge, etc., are determined by the particulars of your application. It is therefore challenging to predict the interest rate that you will be offered before you have filed your application. Keep in mind that interest rates might range greatly depending on the loan amount and length granted, as well as across banks and financial organizations. Prior to selecting the offer you like, be sure to evaluate all the offers made to you. If you like to compare the best bank loan interest rate in Singapore, click here.

Quickly compare against multiple lenders. Get your personal loan through Lendingpot now.

Still have doubts on your personal loan? Let us help!

We’re happy to answer your queries.


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