Small Loan in Singapore: How to Apply for it?

When does a small loan become a necessary funding solution for a person? As money can make the world around, limited amounts can be a problem unless people utilise debts to their maximum potential. 

Borrowing money from a person or company is considered a debt. The amount associated with the debt is frequently the basis for interest rates, charges, and fees. 

Yet when the goal is to have small loans in Singapore, it is a specific type of credit that people want. 

So, here we’ll discuss small loans in the country. Know the facts behind the reference, how to apply, and whether foreigners are eligible for the debt option. Let’s uncover the interesting financing concept of small loans in Singapore.

What is a Small Loan?

A small loan in Singapore comes in another term. It is referred to as a personal loan. It is another debt option accessible to eligible borrowers in the country.

It’s significantly called in this manner mainly because of the max amount loanable to the borrowers. Moreover, its primary purpose is to fill the monetary gap for individuals who require an immediate source of funds. 

It’s a personal or consumer debt and is an unsecured credit. It is the kind of credit a borrower may apply for and would not have to defer any valuable possessions like titled deeds, investments, real estate properties, vehicles and more.  

Where to Apply for a Small Loan in Singapore?

Now you have come to a final decision of getting an unsecured credit. The problem is you need help figuring out how to get it. The solution to the problem is easy.

First, choosing a financial business that offers small loans in Singapore is imperative. Which financial institutions in the country can you go to?

The standard options are banks, financial providing businesses and licensed moneylenders. These three financing enterprises are associated with the finance market but are under different laws and regulations. Nevertheless, they allow borrowers to request small loans yet must comply with the requirements.

Banks in Singapore 

These businesses grant small loans to any individual with legal citizenship as a Singapore Citizen and Permanent Resident of legal age from 21 years old. 

The minimum annual income is subject to the bank’s choice, and the documents required are frequently the borrowers’ NRIC, credit score, and history. 

Financial institutions

Institutions like these often impose the exact prerequisites when a borrower requests a small loan from their businesses. However, there are apparent differences, such as minimum monthly basic salary, employment levels, etc. 

Furthermore, in many cases, these financial institutions mainly focus their services on individuals within their society rather than a comprehensive inclusion of other borrowers.

Licensed moneylenders

Moneylending in Singapore has pushed through the financial market’s boundaries and continues stabilising its influence. 

The moneylending industry’s impact is impressive. Licensed moneylenders are currently the favourable resort when acquiring small loans in Singapore. 

A licensed moneylender can grant a borrower lawful and verified citizenship in the country. A legal moneylender often focuses on proffering small loans in Singapore. It is because it is their industry’s financing focal point to permit personal loans to whoever in the country needs them.

How to Get a Small Loan in Singapore?

You must choose the right financial business to get a small credit in the country. These companies have different scopes of requirements that a borrower has to satisfy. 

Nevertheless, one institution could be sterner than another. So, you must be ready to switch options when those circumstances arise.

For instance, banks and financial institutions are not entirely flexible in granting loans to anyone. In many cases, they would prioritise their clients who desire a small loan. If a person isn’t a client, they could qualify for unsecured credit, typically only if the borrowers have an outstanding credit score and history.

Licensed moneylenders in Singapore evaluate a borrower’s application via their credit score, risk grade, and history. It is among the necessary steps when processing and granting the debt. However, a licensed moneylender in the country can be a lot more flexible in considering a person’s credit background. 

As a result, even if you do not have the most impressive credit background yet have a decent income and capacity to pay small loans, the chances of getting the approval are relatively possible. 

Singapore’s Credit Score and Risk Grade

The country has a specific credit score range and risk grade system. The score ranges are from 1000 to 2000, while the risk grades are from HH to AA. 

This information is among the qualifications a borrower has to comply with to get a small loan in Singapore. 

If a borrower has a score range of 1000 with a risk grade of HH, the probability of defaulting on loans is high. Thus, lenders consider them high-risk borrowers. On the other hand, people with a credit score of 2000 and risk grade AA are low-risk borrowers. 

Aside from the credit scores and risk grades, financial-providing businesses will also assess the credit history for defaults or current existing loans. It is essential to understand that when you have an excellent credit score to show, it is much easier to obtain small loans in Singapore. 

In addition, your credit background can become your leverage when negotiating in asking for multiple loans when required. 

Annual Income and Citizenship

A person like you who is willing to get a personal loan in Singapore must provide and show essential documents like your citizenship and annual income proof. 

Banks and financial institutions mainly focus solely on Singapore Citizens and Permanent Residents, as these are their typical clients. Nevertheless, foreigners may apply. The accessible amount is small but still depends on the annual income.

Foreigners in Singapore could get small loans with help from a guarantor. Guarantors must be Singaporean Citizens with excellent credit scores. They will take full responsibility if the foreigner cannot pay the debt during their tenure.

For licensed moneylenders, they have regulations in terms of managing the max amount for small loans in Singapore, specifically on yearly income and citizenship, as follows;

Under $10,000 Yearly Income

Do you have citizenship as a Singapore Citizen or Permanent Resident and earn a yearly income under $10,000? If you do, you can get a personal loan of $3,000. 

But what if you’re a foreign work pass holder acquiring an annual income of under $10,000? Will you still acquire small loans in Singapore? Yes, you can, and the total attainable amount is $500.

$10,000 at the minimum  and then not more than $20,000 Yearly Income

You may take small loans in Singapore if you are among Singapore Citizens, Permanent Residents, and foreigners. Still, you must prove that you’re achieving $10,000 at the minimum and not more than $20,000 annual income to borrow up to $3,000.

Yearly Income of at least $20,000

A Singapore Citizen, Permanent Resident, and foreign with an employment permit or work pass are allowed to secure small loans in Singapore. However, the requirement has to be an annual income of at least $20,000 to lock in the loanable amount of up to six months’ income worth. 

Smaller Amount Accessible via Small Loans

Loans can either be secured or unsecured. Along with these classifications is the amount accessible to the borrower.

When it is secured credit with collateral, the particular advantages are excellent interest rates with more significant amounts of funds. The typically secured loans in Singapore are mortgage or house loans, vehicle loans, secured credit cards and credit lines, etc.

Meanwhile, unsecured or personal loans do not ask a borrower to pledge any goods or properties of any value in connection to the request. As a result, the amount available is relatively smaller than other credit.

Is it a disadvantage for a borrower to only reach specific loanable amounts when seeking small loans? The truth is it isn’t much of a burden. Mainly because with a smaller amount, the debt fees are bearable for most people.

Furthermore, individuals apply for small loans because of their personal uses. Or they need quick funds for emergencies, education, and other necessities. Personal loans befitting the requirements of the communities without going overboard could lead to undesirable outcomes.

Small Loan in Singapore Application

No specific time or date is necessary when applying for a small loan in Singapore. But that can matter massively on which lender you plan to request the personal loans from.

Banks and financial companies primarily operate only on weekdays. What’s more, these are typically closed on holidays. Unless you apply and have it approved that meets your fixed schedule, that’s alright. Nonetheless,  if you ever find yourself in a tough financial spot, abort any plans to get it from these financial service companies. 

A licensed moneylender might be the ideal choice to obtain a personal loan in Singapore primarily as it targets personal loans to proffer its borrowers like you. These legal moneylenders in the country are well-organised and regulated by the Moneylenders Act. The interest rate, fees, and charges are fixed per the Act and Rules, such as;

  • 4% monthly interest rate regardless if the credit request was a secured or unsecured credit
  • 10% one-time administrative fee via debt principal
  • Late fees and interest rates are locked in at $60 and 4% per month

And last but certainly not least, you can apply for a small debt from a licensed moneylender even on weekends. You don’t have to wait for days or even hours. It is more convenient for a borrower’s fund necessities, especially emergencies. 

For your fast and easy small loan approval, contact the best-licensed moneylender. Apply here now!

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