What are Unsecured Loans in Singapore?

Do you feel awkward borrowing money in general? If you do, you should stop yourself from excluding unsecured loans to help you stabilise your finances. 

Because in the world of finance, a person borrowing money from a lending company is the industry’s order. In many circumstances, both parties aptly benefit from the whole transaction accordingly.

Benefits from Borrowing Money

Of course, it would benefit a borrower to gain knowledge and understanding of loans. The information can assist you in deciding which type of loan to pursue when you are in need—or what kind of loan it is and the fees you must prepare for.

Since you are already contemplating getting a loan, you must first prepare. Understanding vital details about Singapore’s most popularly known loan is essential. It’s an unsecured loan in Singapore or also referred to as a consumer or a personal loan.

What are Unsecured Loans in Singapore

An unsecured loan in Singapore is a debt that usually grants the borrowing applicant a smaller loanable amount. In addition, it is a loan that does not ask or demand you to surrender valuable possessions as collateral. 

Due to the lack of security that collateral mainly sets in place, the lender assesses and evaluates your creditworthiness. It’s because the borrower’s ability to repay the unsecured loan is a crucial factor.

Unsecured Loans Function

The primary function of unsecured loans in Singapore is to provide the funds borrowers need. For instance, you can take out this loan if you require additional cash for your trip overseas.

Do you have a wedding planned soon but don’t have extra cash? You may apply for an unsecured loan. All eligible borrowers may apply for this loan product regardless of purpose. So long as the intention isn’t illegal.

In terms of the process, it can either be slow or fast. The varying factor would depend on your capacities to fulfil specific criteria tied to this type of loan.

The personal loan process moves forward for approval even when you do not have any assets or properties as collateral. The primary focus on financial service providers is aligned with your credit score. Your excellent credit score and risk grade guarantee your application for immediate loan approval.

On the other hand, what if your credit score and risk grade show high default possibilities? It’s highly possible your loan request may not push through.  

Credit Score and Risk Grade in Singapore

Singapore’s financial industry has had its influential streak over the centuries. And recently, the country’s relevance in the financial market became even more prominent, for in 2022, Singapore became the formidable financial hub in Asia. It has surpassed Hong Kong and comes after New York and London.

Being the country’s economic background, it oversees, regulates, and is particularly stern in implementing the importance and impact of credit scores.

The credit scores in Singapore range from 1000 to 2000, and the risk grades are from HH to AA. These two immediately reference whether you are a low-risk or high-risk borrower. Low-risk borrowers predominantly have exceptional credit scores of 2000 and a risk grade of AA, while high-risk borrowers have 1000 credit scores and an HH risk grade.

For the most part, a strict financial institution may decline your loan request if you are a high-risk borrower. Nevertheless, when you’re a low-risk borrower, your appeal for unsecured loans in Singapore may be approved instantly.

As a personal loan lacks a guarantee from any form of collateral, you are then required by the financial service provider or a licensed lender in Singapore to pay higher interest rates and other fees.

Where to Apply for Unsecured Loans in Singapore?

You have acquired the basics on an unsecured loan. It is time to know precisely where to apply for it in Singapore. To move forward, where can you request unsecured loans in Singapore? You have to answer some questions below before proceeding.

  • Do you have an existing account with the local banks in the country?
  • Do you belong to cooperatives or credit unions?
  • Or do you prefer a more independent financial institution to apply for a consumer loan?

Did you answer “yes” to all the questions asked of you? If you did or even if you didn’t, let’s go ahead with what you have to do for the bank, financial institution, or moneylender small loan request and approval. 

Banks and Financial Institutions Unsecured Loans Process

Are you a member of any legitimate financial institutions in the country? 

Or have an existing account from a local bank? It’d be easier for you to get approval for the unsecured loan.

You do not need additional proof of your identification and other documents to support your eligibility. Unless you are not of legal age, won’t stay long in Singapore or have a problematic credit score, everything will go smoothly for you.

When you need the money from a small loan as soon as possible, it’s better not to pursue your application from these institutions as the process is rigorous and takes a lot of time. The purpose of acquiring immediate cash from an unsecured credit via these businesses would lose its essence.

Licensed Moneylenders Unsecured Loans Process

A licensed moneylender in Singapore reviews and assesses a borrower if you’re qualified for a small loan. Since it is possible you do not have any records with a licensed moneylender or from their moneylending company, especially when you’re a new borrower, then you have to prepare documents like;

  • Proof of your identification
  • Proof of home address
  • Certification of employment
  • Proof of annual income
  • Creditworthiness

Most certifications you’ll provide will be reviewed and verified by the licensed moneylender through the Moneylenders Credit Bureau MLCB. 

MLCB and Forgiveness on Credit Assessment

The Moneylenders Credit  Bureau is the central network of data regarding your loans and repayment documentation with licensed moneylenders.

Your creditworthiness shall reflect with ease by the MLCB. The licensed moneylender can fully access it if you commit to an unlicensed loan and repayment responsibilities. You can anticipate faster consumer loan approval when no concerns are seen in your records.

Furthermore, although it is duly explained and regulated in the Moneylenders Act that all borrowers must show good to excellent credit background to be approved for loans, licensed moneylenders can be flexible with the strict rules. 

It only applies if you have proof of decent income and shall be granted the unsecured credit.

Fast and Easy Unsecured Loans Approval 

Requesting a consumer loan in Singapore from licensed moneylenders is faster than other financial businesses. If you have prepared all necessary certifications and proofs, your unsecured loan will take less than an hour to be granted.

Before visiting the financial business, you must ensure you are eligible.

Unsecured Loans Eligibility Criteria

Aside from an individual’s creditworthiness, citizenship and yearly income are the criteria for eligibility for an unsecured loan.


A borrower’s citizenship plays a role when asking for a personal loan. Among the primary functions in Singapore’s financial industry, a borrower must live and work in the country, not solely stay for short periods. 

As a result, Singapore’s prioritised borrowers for a consumer loan are Singapore Citizens, Permanent Residents, and foreigners residing in the country. 

Salary or Annual Income

A borrower’s salary or annual income is the primary basis for a financial institution to approve a consumer loan. However, the most preferred proof of income is from three consecutive months of wage verification or certification of yearly earnings.  

Financial businesses in Singapore will welcome a borrower with a decent income ranging from less than $10,000 to more than $20,000 annually. 

An important note is that borrowers such as yourself must know that when you apply for a personal loan in Singapore, your citizenship and annual income are the fundamental grounds for the accessible maximum loanable amount.

Unsecured Loans Maximum Amount Accessible

A small loan in Singapore entails borrowers a small amount to loan. The licensed moneylender will review your citizenship and yearly wage to ensure concerns with overborrowing won’t occur. But it’ll weigh more on the annual earnings such as;

Less than  $10,000 Yearly Wage

If you are a Singapore Citizen or Permanent Resident earning less than $10,000 yearly overall wage, you can take $3,000 as the max loanable amount.

For a foreigner working in the country who’s getting below $10,000 annual wage, you can take a $500 loanable sum.

At least $10,000 and not more than $20,000 Annual Income

A Singapore Citizen, Permanent Resident, or foreign work pass holder making a minimum of $10,000 and not exceeding $20,000 annual salary can take a $3,000 max loanable sum.

A minimum of $20,000 Yearly Income

Singapore Citizens, Permanent Residents, or a foreigner residing in the country earning at least $20,000 a year are allowed to take a maximum loanable sum of six times their monthly income. 

These are the maximum loanable sum for all eligible Singapore borrowers applying for a personal loan. The loan’s interest rates and fees are under a capping regulation.

Unsecured Loans Interest Rates and Fees

For financial institutions or a licensed moneylender in Singapore who grants personal loans, the best leverage to acquire is demanding you, as the borrower, higher rates and other fees. 

A bank and financial institution in Singapore has its set of policies and regulations regarding rates and fees associated with a personal loan. Some are higher interest rates and charges, while others are lower. It will vary on the monetary business you are currently working with.

But, moneylending in Singapore implements fixed or capped loan costs and charges if you apply for a consumer loan from them. 

A licensed moneylender in Singapore lends money to eligible borrowers like you. These individuals or groups are authorised to grant loan money under the regulations of the Moneylenders Act. The Ministry of Law – Registry of Moneylenders oversees all moneylending activities and serves and assists both moneylenders and borrowers in the country.

Licensed moneylenders in Singapore are recognised in the financing industry, mainly due to their focus on smaller loans or personal loans and fixed fees.

With the recognition in the moneylending industry, licensed moneylenders in Singapore focus on granting unsecured loans. Along with these debts are specific interest rates and fees that must never exceed the capping requirement.

The interest rates and fees applied for this financial product via a licensed moneylender in Singapore are as follows;

10% Administrative Fee

What is an administrative fee? It’s the specific charges taken from the loan’s principal amount. The Moneylenders Act permits such fees under its regulations.

A licensed moneylender may collect the administrative fee only once. They cannot charge it more than once. Moreover, the maximum capping percentage is up to 10% only.

4% Monthly Interest Rate

Since 1st October 2015, the Moneylenders Act has amended the interest rates a licensed moneylender in Singapore can charge its borrowers. From its activation, licensed moneylenders in the country can collect the interest rate percentage for a small loan is 4% a month. 

Delayed Payment Charges

Sometimes, even the most meticulous borrower may experience lapses in their obligations. A borrower who cannot or did not pay on time has to face specific charges for delayed payments.

An unsecured loan in Singapore is much smaller than other debt options in the country. But borrowers like you can expect fixed charges even when you’re already behind the repayment schedule. 

Today, the Moneylenders Act has enforced a cap on the interest rates of 4% for late payments. It is 4% for each month that borrowers miss the schedule. Licensed moneylenders in Singapore may charge up to $60 for late fees.

Any attempt from a moneylender to push the fees higher than the intended loan caps imposed in the Moneylenders Act will face court and legal punishment when found guilty.

Seek Unsecured Loans For Financial Needs

Unsecured or personal loans in Singapore are prominently favoured by borrowers as the sum accessible is much smaller and easier to request approval than secured loans. The loan terms and conditions are simple to understand and comply with. 

When you seek an unsecured loan from a moneylender and notice an unfair set of terms, conditions, higher interest rates, fees, and charges, call the Registry at 1800-2255-529.

Please click here to apply for unsecured loans today!

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