Looking for a personal loan can feel overwhelming, but we’ve got your back. Lendingpot simplifies the process, helping you find the best rates and terms without the hassle. Scroll down to:
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.
A personal loan is disbursed directly into your personal bank account, offering flexible use.
This differs from auto and renovation loans, which are paid directly to the dealer or contractor. As a result, auto and renovation loans aren't suitable for business use due to their restricted usage.
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.
*A loan quantum is the maximum amount of money you can borrow from a lender.
To check your credit score, you need to obtain a credit report from the Credit Bureau Singapore (CBS). You have two options:
1. Soft Copy Online: Request your report digitally.
2. Hard Copy: Collect it at SingPost outlets, the CBS office, or CrimsonLogic Service Bureaus.
Cost: S$8.00 (before GST).
When lenders assess your loan eligibility, your Credit Bureau Report is crucial. Here are three key factors they consider:
1. Overall grade.
2. Presence of defaults or bankruptcy.
3. Absence of a score.
Banks offer significantly cheaper interest rates, typically ranging from 6-8% p.a. (EIR). In contrast, licensed moneylenders charge monthly interest rates, capped at 4% per month by the Monetary Authority of Singapore (MAS), which translates to a much higher annual rate.
When comparing personal loans in Singapore, you'll see at least two interest rates:
In Singapore, lenders must disclose both the advertised rate and the Effective Interest Rate (EIR). The EIR shows the loan's true cost by including processing fees and compounding interest as you repay. This means you get a more accurate view of what you'll really pay.
The Annual Percentage Rate (APR) represents the annual cost of borrowing or investing, including fees but excluding compounding interest. It provides a clear picture of the total annual cost over the loan term.
Banks offer a significant advantage by providing loan terms up to 5 years, which can significantly lower your monthly instalments. In contrast, moneylenders' higher interest rates make loans beyond 2 years less practical.
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.
Licensed moneylenders can provide loans up to $3,000
As long as you are not in default, licensed moneylenders are still open to providing credi
While most banks can only extend up to 2 times, licensed moneylenders can lend up to 6 times your monthly income
Personal loans often offer lower interest rates, ranging from 5-6% p.a., and can be as low as 2-3% p.a. with collateral. This is significantly better than the high rates from alternative lenders, which can be 3-4% per month.
Personal loans are based on your income, allowing you to borrow up to 8 times your monthly income. This can be a substantial boost for start-ups, as business loans typically disburse based on revenue, which may be negligible for new companies.
Personal loans are quick and easy, using existing info like MyInfo, so you skip the hassle of paperwork and financial reporting required for business loans.
You can apply directly with individual banks or moneylenders, but using Lendingpot lets you compare multiple personal loan options online in one place—saving you time and helping you find the best deal.
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Our dedicated team of experts walks you through the loan process and helps with market research.
We compare rates across banks and non-banks to ensure you get the lowest interest and highest cash-out.
Our service is free, with lenders paying us to compete for your business. Plus, enjoy rewards when you secure a 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 21 and 70
• You must have a monthly salary of at least $2,500.
• You must be a Singaporean with a salary, a PR, or an EP holder.
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!
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.
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.
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