Can Personal Loan be Transferred to Home Loan in Singapore?

Loans in Singapore abound. There’s no shortage of options; from personal loans to home loans, there’s a loan for every occasion. However, let’s say you’ve secured a personal loan and now you’re eying your dream home; what do you do? The real query is, “Is it possible to transfer your personal loan into a home loan?” The answer may be nearer than you realize.

Understanding Personal Loans in Singapore

Collateral isn’t necessary for personal loans, making them unsecured. They come in handy for various purposes like settling medical bills, financing a massive birthday bash, or consolidating credit card debts. In Singapore, numerous lenders provide personal loans with set interest rates, typically varying from 3.5% to 10.8%. Lenders and loan amounts determine the repayment period, which can be between 1 to 5 years.

Understanding Home Loans in Singapore

Unlike personal loans, home loans are secured loans used to purchase a property. The collateral for the loan is the property itself, so if the borrower defaults, the lender can sell the property to cover the remaining balance. In Singapore, home loans typically come with variable interest rates linked to the Singapore Interbank Offered Rate (SIBOR) or Swap Offer Rate (SOR). Depending on the lender and the loan amount, repayment periods can stretch for either 30 or 35 years.

Can Personal Loans be Transferred to Home Loans in Singapore?

The answer is a resounding no when considering consolidating a personal loan balance to a home loan. Personal loans and home loans have distinct characteristics, terms, and conditions. Personal loans are not secured, unlike home loans that are secured against the property being acquired. Therefore, the interest rates, repayment periods, and qualifications differ for each loan variant.

Alternatives to Using Personal Loans for a Home Loan Payment in Singapore

It’s unwise to rely on personal loans for your home loan payments. Luckily, there are creative alternatives that allow you to finance your down payment without accruing additional debt.

CPF Funds. In Singapore, there’s an effective substitute to financing your home purchase via personal loans, and that’s tapping into your Central Provident Fund (CPF) savings. CPF savings can help Singaporean citizens and permanent residents to cover a substantial chunk of their home purchases, including expenses like legal fees and stamp duty.

Savings and Investments. When it comes to funding your down payment, dipping into your savings and investments is another viable option. Whether it’s through high-yield savings accounts or securities like stocks and mutual funds, you can use these assets to bolster your home purchase. But keep in mind the tax ramifications and risks of liquidating these holdings should be thoughtfully weighed.

Gift from Family. In the process of financing your home, having family members who can lend a helping hand may come in handy. A gift from them can go a long way in reducing the burden of paying for your home loan or downpayment. Nonetheless, it’s crucial to understand that the gift should be genuine, without any expectation of repayment or as collateral for a loan.

Down Payment Assistance Program. Acquiring a substantial down payment for homebuyers may seem like a daunting task. Fortunately, you can leverage a variety of programs available to lend a helping hand. By tapping into options like grants and loans, you can cover the initial expenses of your dream home. With the right assistance program, you can take the necessary steps to turn your homeownership aspirations into a reality. 

Insights

While personal loans may not be the optimal choice for paying home loans or down payments for Singaporean properties, you have other options to pursue your dream of homeownership. You can tap into your CPF savings, dip into your personal funds, seek help from your family, or look into down payment assistance programs.

Remember, before making substantial financial choices, it’s crucial to research extensively and seek advice from a mortgage specialist or financial advisor. Your unique circumstances require a tailored plan that fits your goals and aspirations.


Your Ultimate Financial Ally – Accredit Pte Ltd

Although you can’t transfer a personal loan into a home loan, it can still serve as a useful tool for covering additional expenses. Whether you need fast cash to enhance your living quarters or upgrade your furniture, Accredit Moneylender is the top choice for you. With a remarkable 17-year reputation, we’re Singapore’s preferred source for cost-effective short-term loans.

Reach out to Accredit Licensed Moneylender now and secure the funds you require!

Accredit Pte Limited has 4 locations island-wide, to bring our transparent services closer to you.

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