Do you enjoy and love your job? If you do, you are among the lucky people who get paid beyond the minimum salary to get a personal loan. A stable job, especially in times of economic crisis, is excellent.
Yet somehow, being employed isn’t the only attainment crucial these days. Many people have trouble with their wages, which don’t meet their necessities.
Because the country has no minimum salary regulations, you must have done your best to bargain and negotiate a just living salary. But what is the minimum requirement salary achievable in Singapore?
Singapore’s Minimum Monthly Salary Benchmark
The latest data on Singapore’s monthly average wage as of January 2023 is S$5,783. Singapore residents with full-time jobs acquire S$4,563 Median Gross Monthly Income from work, including the employer’s contributions for CPF.
However, only some people living and working in Singapore can attain the average monthly salary. Specifically, the foreign work passes holders in the country unless you’re a qualified and highly skilled professional obtaining SGD 5000 to SGD 5,500. On the other hand, people who belong to different industries may earn a minimum wage of $1,000 per month.
The economic unrest and soaring expenses mainly affect the cost of living in the country. People increasingly ponder that getting a personal loan from a moneylender in Singapore will be best.
If you are among the individuals trying to figure out the minimum salary to get a personal loan and the steps to do it, you’re in the right place. Let’s begin.
What is a Personal Loan?
In Singapore, a personal loan is among the most recognised and often considered type of credit. Primarily due to it being the highly viable loan choice that the majority of communities in Singapore can obtain.
It is also called a consumer loan, but the banking and moneylending in Singapore refer to it as an unsecured loan. An unsecured loan is a credit that does not ask a borrower like yourself to surrender or add a valuable possession to the loan application.
A personal loan becomes a risky moneylending transaction because it lacks any collateral, such as vehicles, real estate, and assets. To balance out the risk taken by the licensed moneylender in the country and to ensure the safety and protection of borrowers, loan caps are implemented by the Moneylenders Act in Singapore.
Before applying for an unsecured loan from a moneylender in the country, you must prepare some documents to prove your citizenship, address, employment, credit background, and, most importantly, your proof of salary. In Singapore, your annual minimum stipend is a significant factor in whether you can get a small loan.
Minimum Salary to Get a Personal Loan in Singapore
A licensed moneylender may evaluate a borrower’s monthly wage to see if you are eligible for a personal loan. But in Singapore, your annual minimum earnings are usually assessed for the whole process.
What if you are in an industry that earns $1000 a month or a foreign work pass holder?
Would these factors matter and can cause personal loan rejection?
A borrower can apply for a personal loan in compliance with the Moneylenders Act, particularly after meeting the minimum salary eligibility.
Minimum Salary to Get Personal Loan Eligibility
- Below $10,000 Per Annum
When you are a Singapore Citizen or Permanent Resident earning a yearly minimum salary of below $10,000, you can get a small loan of $3,000.
And if you’re a foreign work pass holder with the same annual salary of less than $10,000, you can get a personal loan of $500.
Foreigners, especially those with work passes who obtain a yearly minimum requirement of $10,000, can take as much as $1,500 in the past.
But, the continuously rising concerns about overborrowing and illegal moneylending activities have become too overwhelming in the country the government had to step in.
As a result, the Ministry of Law – Registry of Moneylenders has since stipulated and activated on 1 October 2015 that all foreigners residing in the country are granted $500 for proof of a yearly minimum wage of less than $10,000.
- $10,000 minimum and not more than $20,000 Per Annum
Are you a Singapore Citizen, Permanent Resident, or a foreigner living and working in the country earning at least $10,000 and not more than $20,000?
You’re qualified to get a personal loan. The max total amount you may take is $3,000.
- $20,000 Per Annum
Are you a Singapore Citizen, Permanent resident, or a foreigner residing in Singapore applying for a personal loan?
You must show proof of your annual minimum salary of $20,000 to the authorised lender.
When you have met the requirement, the licensed moneylender will approve your request to get a personal loan with a maximum loanable total of up to six times your monthly wage.
You must only borrow money from a licensed moneylender in Singapore. Or else, the process could be breached, and troubles may manifest in your life, disrupting your personal and professional plans.
Where to Get a Personal Loan in Singapore?
A country like Singapore has its financial services providers. It is mainly because Singapore’s banking and moneylending industry has strengthened its economy despite the rising economic issues in recent years.
As such, you can get small loans via banks or financial institutions. It would be advantageous if you already have an existing account with these businesses and good to excellent creditworthiness to back you up.
What if your credit score doesn’t reach the bank or financial institution’s criteria? Don’t worry; you can get a small loan from a licensed moneylender in Singapore.
Singapore’s Licensed Moneylenders
A licensed moneylender is among the three authorised lenders in Singapore. The others are excluded, moneylenders and exempt moneylenders. Yet, from the classifications, licensed moneylenders are most acknowledged and accessible to borrowers in the country.
How will you know if you are making a significant personal loan transaction with a licensed moneylender?
That’s easy. You must visit the Ministry of Law website and search for the Registry of Moneylenders page. You will get a comprehensive list of all licensed moneylenders in Singapore from the page.
And if you do not have commendable creditworthiness? A licensed moneylender in Singapore shall assess your personal loan application, credit score and history with the help of the Moneylenders Credit Bureau. The process is quick and efficient, mainly when your data is accessible within the system.
Even when you have had your share of personal loan mishaps, a licensed moneylender can be forgiving concerning creditworthiness. And so long as you have employment certification, annual minimum salary proof, and a decent current wage, they’ll gladly offer you their financial assistance regardless of your credit score and background.
Always verify if the moneylender is legitimate from the Registry of Moneylenders. If you’d rather be more cautious, you may visit the office first-hand and compare it with other moneylenders near your location. Ensure it is a licensed moneylender from which you’re getting a personal loan, not an unlicensed one.
How to Avoid an Unlicensed Moneylender?
Since the introduction of moneylending in Singapore, the reputation of moneylenders had fallen from good to bad, mainly when moneylending wasn’t appropriately regulated yet. Loansharks, or ah longs, as Malaysians and Singaporeans call them, wreaked havoc and disturbance on their borrowers.
The modern-day ah longs or unlicensed moneylenders aren’t any better either. They will harass, abuse, spray paint, leave notices, disturb communities, and even set properties on fire if the victim does not conform and repay debts with excessively high-interest rates.
The way to handle any possibility of meeting and transacting with an unlicensed moneylender in Singapore is to avoid them altogether.
Tips to Help You Avoid Unlicensed Moneylenders
Awareness and self-education on unlicensed moneylending modus operandi do the work. It’s because when you know the tactics an unlicensed moneylender uses, it becomes a conscious effort to avoid them and report to the authorities without delay.
So, these are the common illegal tactics an unlicensed moneylender commits such as;
- Feeding you misinformation regarding the “lower interest rates” if you’ll get a small loan from them.
According to the Moneylenders Act, the interest rate for secured and unsecured loans from a licensed moneylender is fixed at 4% per month. Any digits or percentage promised that’s lower or exceeds 4% is a red flag.
- Inviting you for a “faster loan process and grant” of personal loan via text or private messages on social media platforms. A licensed moneylender in Singapore cannot advertise or solicit their financial services to anyone. You, as the borrower, would seek them and not the other way around.
- Demanding to get hold of your details like SingPass user ID and password, NRIC, work permits, employment passes, passports, driver’s licence, etc.
Licensed moneylenders in Singapore may ask for proof of your annual minimum salary to get a small loan and other essential information. But they’d never let you disclose beyond that or ask you to take a photo of your documents and send it to them. Ah, longs are primarily guilty of doing this tactic.
Never fall into the trap of an unlicensed moneylender. Once you notice these methods, call the Registry at 1800-2255-529, the National Crime Prevention Council’s X-Ah Long hotline at 1800-924-5664 or the Singapore Police Force at 999.
Meet the Minimum Salary to Get a Personal Loan
Loan transactions can be meticulous. It’s only natural since it involves money. There needs to be trust between you and your chosen loan lender.
To establish that trust, borrowers like you must be truthful with every detail you’ll divulge in the application form. Along with this information are your minimum salary to get a personal loan.
Getting a personal loan is a massive obligation for anyone. Thus, it’s wise not to take it too lightly and commit to the eligibility criteria and requirements. Choose the best-licensed moneylender that can assist and guide you without hassles.
No matter how tempting it is, avoid unlicensed moneylenders at all costs. They’ll only disrupt your financial goals in the end.
Thus, your emergencies or financial needs are more crucial than paying 4% per month; it is an understandable risk. With an annual minimum salary of at most $10,000, you can still get a personal loan.
For a foreigner struggling in the country, communicate with your employer before taking a personal loan. In this way, they can assist you with the process. It’s wiser and safer to approach.