Do you find yourself in a tight financial situation right now? If so, then the answer you may be looking for is personal loans in Singapore. These types of loans provide individuals like you quick cash for unexpected circumstances.
In this comprehensive guide, you’ll learn crucial information regarding unsecured loans in the country. In addition, this guide will cover the eligibility criteria, application process, and repayment terms for this kind of loan.
What are Personal Loans in Singapore?
A personal loan is an unsecured loan or a consumer loan. It’s the type of loan which permits borrowers to borrow cash from a licensed moneylender, bank, or financial institution without being demanded to provide collateral.
An unsecured loan like this is mainly utilised to cover unplanned expenses, such as vehicle or home repairs, medical bills or emergencies, or to consolidate debts.
Consumer loans are accessible from banks, financial businesses, and legal moneylenders in Singapore. Before you take out a loan from these financial assistance businesses, you must comply with specific criteria and show proof of eligibility.
The eligibility criteria, repayment terms, and interest rates vary, especially on the moneylender you’ve chosen to apply for the loan.
Eligibility Criteria for Personal Loans in Singapore
Regarding a consumer loan, a lender must ensure their borrowers can comply with the designated eligibility criteria. Borrowers must abide by and present all the necessary proof and documents before their loans are approved.
Here are the generally known requirements for a borrower’s eligibility:
Anyone under twenty-one (21) cannot take out a loan. 21 is the legal age level to participate in loan transactions. Moreover, they should e at most sixty-five (65) years old at the time of the application.
It is of utmost importance that a borrower has to be employed. Or they could be self-employed or have a business. So long as they have proof of having a stable source of income.
If a borrower is indeed self-employed, they have to present additional documentation. This paperwork is mostly bank statements and income tax statements.
Whether a borrower is employed or self-employed, they must present their income proof. It’s crucial to note that the minimum income requirement primarily relies on the borrower’s chosen lender. Although there are specific differences due to diverse types of loans, with a personal loan, there’s a general rule to follow.
The most common rule with an unsecured loan is a borrower has to have a minimum monthly income of S$1,500. In addition, they have to show validation of gaining an overall income per annum of less than $10,000.
Residency Status or Citizenship
Interested borrowers should have proof that they are indeed citizens or currently living in the country. As a result, they need to show they’re either a Singaporean Citizen, Permanent Resident, or a foreigner with a valid employment pass or work permit.
Singapore’s credit score system is known worldwide. It’s because it has proven an effective means of providing data to both moneylenders in Singapore and borrowers.
Thus, all licensed moneylenders in the country, banks, and financial institutions check and verify the borrower’s credit score. It’s to assess their creditworthiness from the data acquired by the Credit Bureau Singapore.
When an individual or company shows a high credit score and risk grade, they’ll have a higher probability of loan approval. In addition, they may obtain a lower interest rate.
These are the general rules about eligibility criteria for a consumer loan. It’s advisable to contact the lenders in person and check their specific requirements. In this way, the information a borrower gets gives them a better idea of their loan approval chances and helps them meet the qualifications accordingly.
Do you need help with your current credit rating? Do you feel the bank or financial institution won’t accept or approve your loan request? You need not worry at all.
Consider working with a licensed moneylender in Singapore. Their operations focus mainly on moneylending, especially small loans, and have flexible eligibility criteria.
Personal Loans’ Application Procedure
After listing the requirements, it’s time to learn more about the unsecured loans’ application procedure.
A borrower must diligently check and review each step for a smoother, hassle-free loan transaction. The application procedure for a personal loan is straightforward such as;
Researching Singapore’s Moneylenders
There are several legitimate moneylenders in Singapore. These are the banks, financial institutions, and licensed moneylenders.
These legal lenders have similar and dissimilar eligibility criteria and standard operating procedures. Thus, to avoid confusion and ensure you’re completing the proper paperwork, doing ample research will help you.
Aside from learning about the standards of these moneylenders, concentrate on the interest rates and repayment terms. It’s these specifications that vary the most.
Gathering Documents for Personal Loans
A vital step in processing personal loans in Singapore is gathering one’s documents. These types of paperwork play a significant role in loan approval. Thus, borrowers have to make sure they have specific documents to present, such as;
- Proof of Identification, which will be the NRIC or passport copy. This identification aims to verify the borrower’s identity and ensure they’re a Singapore Citizen or permanent resident.
- Proof of residency or address is helpful to certify where the borrower lives and quickly contact them when needed.
- Bank statements are a possible document needed by lenders. It’s mainly a valid requirement for showing your expenses and income. It gives businesses offering moneylending in Singapore a better way to assess borrowers’ financial situations and determine their ability to repay the loan.
- Proof of income documents is mostly updated pay slips, employment contracts, and income tax statements. Like bank statements, it verifies the borrower’s steady source of income and capacity to fulfil loan repayment.
- Employment pass and work permits are highly prioritised documents when the borrower is a foreigner or ex-pat to show proof of eligibility for working in the country.
These are the general paper works initially asked by companies providing moneylending in Singapore. But, it’s better to inquire from the legal lender directly about which documents or additional documents you have to present.
Also, borrowers should be sure to present clear and legit copies. Any information that’s either missing or unclear may delay the approval procedure.
A lender cannot efficiently process an application with essential details or information about the borrower. Thus, borrowers must answer and diligently fill in all questions before application submission.
Errors or missing details may lengthen the loan procedure further, negating the purpose of getting a personal loan quickly and easily.
Wait for Personal Loans Approval and Accept the Loan Offer
When a borrower applies, it’s time to wait for the approval and accept the loan offer.
Waiting for the lender to grant a personal loan request won’t take long, especially when all necessary documents are completed. It mostly takes a few hours or days, depending on the lender and the complexities of the application.
But, licensed moneylenders in Singapore may process the loan application much faster than other financial assistance providers.
Once a loan is approved, lenders usually send offers with specific terms and conditions. Among these are interest rate, repayment schedule, fees or changes associated with the loan and loan amount.
A borrower needs to read and understand the loan terms and conditions. This way, clarifications may be addressed immediately and resolved.
Receiving the Funds
As a lender and borrower meet halfway regarding the loan offer, it’s time to receive the funds. These are usually deposited to the bank account the borrower provided.
Due to stringent procedures and verifications, traditional banks in Singapore take several days to process applications and release loan funds. At the same time, credit unions may take a few days to disburse the loan funds.
Licensed moneylenders in Singapore can release loan funds on the same day or within a few days after loan approval.
Repayment Terms for Personal Loans in Singapore
Taking out an unsecured loan in the country means you must repay the loan over a specific period. It includes interest rates and other charges.
It’s important to understand that repayment terms differ from lender to lender. Nevertheless, the general rule includes the;
- Loan amount – It’s the total sum you borrowed
- Interest rate – It’s the percentage of the interest on account of the loan amount.
- Repayment period – it’s the specific period when borrowers have to repay the loan repayment. The tenure ranges from one to five years.
- Monthly instalments – These are the designated payable amounts for each month. It includes the principal amount with interest.
- Early repayments are accessible options to repay the personal loan you took from a lender. Some lenders will assess the repayment without fees, while others charge additional expenses.
Tips to Get Personal Loans In Singapore Fast and Easy
Do you want to get a fast and easy loan in the country? It’s easier than you’d expect.
Aside from the previously mentioned information in this guide, let’s explore the tips for a quick and easy process to get unsecured loans, such as:
- Check your Credit Score
Before you apply for a consumer loan, be mindful and check your credit rating first. Make sure it meets the moneylender’s standards.
- Never Borrow Money That’s More Than You Need
Taking out larger loans could lead to higher interest rates and extended repayment periods. It’s better to borrow money the amount you do need than go overboard.
- Always Read the Fine Print
Even when you feel the urge to be in a rush, always read the loan agreement as carefully as possible.
- Consider Reaching out to a Licensed Moneylender
Low credit scores are often the leading cause of loan rejections. Consider contacting a licensed moneylender through the Ministry of Law’s Registry of Moneylenders list for circumstances like these.
Although licensed moneylenders have higher interest rates and stricter repayment plans, they can help you if you have a low credit score. Even when you don’t meet specific criteria, they’ll be willing to work with you.
- Make Use of a Loan Calculator
Always come prepared to get a faster and easier unsecured loan in the country. How? You can make use of a loan calculator.
This way, you can easily estimate the monthly payment and overall interest fees based on the loan amount, repayment period, and interest rate.
It lessens your concerns about whether you can repay the loan or whether your income is enough to shoulder multiple loans. It also allows you to assess your ability to repay or get another or new loan.
Get Fast Cash only with Personal Loans.
When you require quick funding, sometimes you’d feel desperate to resolve the problem. Getting personal loans in Singapore can be an easy and fast solution for your financial needs.
Make sure to comply with the eligibility criteria and complete all essential documents. Applying to suitable lenders makes a big difference to your loan experience. Also, remember to compare rates, fees, and charges.
Research which lenders are the best and can deliver your needs as urgently as possible. Now, all you have to do is follow the steps in this guide to get a fast and easy unsecured loan.