How Much Personal Loan Can I Take In Singapore?
February 24, 2023
In Singapore, personal loans are readily available to all citizens, including foreigners with a Singapore residency visa and permanent residents.
With easy accessibility and fast approval, personal loans can help borrowers to meet every financial demand.
If you’re wondering ‘how much personal loan can I take’, this article can offer you a detailed idea about personal loans and the amount you can procure from various financial institutes.
What Is A Personal Loan?
In Singapore, a personal loan is an unsecured financial scheme that helps you take care of urgent money crunch. It’s called unsecured because money lenders or banks do not demand any collateral.
In simpler words, if the borrower cannot pay back the amount plus interest, the lender cannot seize their assets, like their property.
On the contrary, a secured personal loan asks for collateral. Such loan types are known as home mortgage loans.
You can use personal loans to meet almost all your financial requirements, like a medical emergency, additional tuition fees, the extra catering cost at your wedding, and more.
Often, loan experts point out that personal loans help repay short-term finance loans.
For instance, you’re paying credit card loans per year with 20% interest. Opt for a personal loan and pay it off at a lower interest rate.
Note: It’s wise to opt for something other than personal loans while renovating a home or paying long-term educational fees. In these cases, banks have specialised loan schemes and offer lower interest rates than personal loans.
How Much Personal Loan Can I Take?
The credentials of the personal loan scheme depend upon various factors. They include your financial sources, credit score, annual income, and interest rates.
If you think, ‘how much personal loan can I take out,’ the answer is two to six times your monthly income. The maximum amount you can borrow from the bank or a money lender is $200,000.
Much of the personal loan amount depends on your previous outstanding credit balance, transaction history, and the capacity to repay the amount within the stipulated tenure.
What Can A Personal Loan Be Used For?
A personal loan is appropriate if you’re considering taking a low-interest loan that you can pay off over a specific tenure. Understand in which circumstances a borrower can seek personal loans:
● Finance Weddings Or Vacations
Consider taking up a low-interest personal loan to cover your expensive wedding or plan a vacation. Such loan programs come in handy in covering the expenses for once-in-a-lifetime plans.
● Address Medical Emergencies
Is your close family member about to undergo urgent surgery? Even though you’ve saved up for unpredictable accidents and emergencies, it’s not always sufficient. Licensed money lenders can process your loan within a few hours.
● Pay Credit Card Debts
Though it’s not wise to use personal loans on a long-term basis to pay your card debts, it’s still a viable option. Make sure you spend within your limits.
Do You Qualify ForA Personal Loan?
In Singapore, permanent residents, foreigners, and Singaporeans can obtain personal loans from banks and licensed money lenders. Each of them has different eligibility criteria.
Licensed Money Lenders
If borrowing from the Ministry of Law enlisted moneylending agents, then Singaporeans or permanent residents need not have to earn $30,000 per year. Even if their annual income is $20,000, they’ll be eligible for personal loans.
With foreigners, if the annual income is between $10,000 and $20,000, then they can borrow $500 only. To access six times of their salary, they need to earn at least $20,000 yearly.
Bear in mind most money lenders check your credit score and capacity to repay the loan amount within the tenure before sanctioning the loan request.
While borrowing money from banks, the borrower must earn at least $30,000 per annum. This criterion is the same for both salaried and self-employed persons.
For foreigners, the annual income value differs from one bank to the other. However, most banks require a minimum yearly income range of $40,000 to $60,000.
What Are The Lowest Interest Rate Personal Loans Available in Singapore?
On a regular interval, banks revise their rate of interest. The lowest interest rates most banks promote range between 3-6%.
However, often they advertise lucrative loan offers. You can use them and pay much lesser interest.
Can You Take Multiple Personal Loans?
According to the Monetary Authority of Singapore (MAS), a borrower can apply for an unsecured loan amount 10 to 12 times their monthly salary.
These unsecured loans include home renovation loans, credit cards, personal loans, personal lines of credit, and other similar loans.
Depending on this determining factor, you can take out multiple personal loans.
Remember, if you exceed this limit for three consecutive months, financial institutions like banks and moneylending agencies will not lend you unsecured loans. MAS aims to prevent Singapore citizens from excessive borrowing practices.
Note: In the case of multiple personal loans, banks and moneylenders can lend you six times your monthly salary.
For better understanding, consider your monthly salary is $10,000. You can borrow up to $60,000, which is six times your monthly paycheck.
In this situation, you can either choose six personal loans of $10,000 each or three personal loans of $20,000. You can settle the arrangement with the bank or moneylending agents.
However, remember both financial institution agents will approve your multiple personal loans after checking your outstanding credit balance and credit score.
What To Consider Before Applying For Personal Loans?
When opting for the best personal loans in Singapore, make sure you’re aware of the following factors:
● Pay Back Plan
One of the first factors you must take care of is the payback plan.
The payback includes not only the initial principal amount but the interest rate as well. The financial source may charge you additional duty fees in a few circumstances.
However, paying them off at the right time is crucial to maintain a healthy credit score. That’s because a decent score means you’re trustworthy as a borrower.
If you cannot repay your debt, it can affect your credit score negatively. Moreover, you lose the chance of getting lower interest because of a bad credit score.
● Monitor Your Finances
Irrespective of the loan scheme, manage your monthly finances with care. Repaying the instalment amount with interest within the stipulated deadline can help procure better loan schemes in the future.
Therefore, before a borrower opts for a loan, they must know their financial capacity and should be able to create a budget to maintain expenditures accordingly.
When discussing the terms and conditions of the credit scheme, the borrower should decide on the repayment frequency. They must ensure the frequency (i.e. weekly, monthly, or quarterly) matches their convenience.
● Look Into Alternatives
A personal loan is always a viable option. If you’re incapable of handling the interest rates, explore other alternatives. A debtor can borrow money from family members or friends.
They must assure the potential lender about their trustworthiness and that they would return the amount on time.
The borrower should inform them why they require the credit amount and eventually set a target within which they’ll pay back the amount.
Should You Be Borrowing Personal Loans from Money Lenders?
Licensed money lenders are quick and easygoing on loan rules compared to various banks’ stricter loan requirements and longer duration to approve a loan. Here are some reasons to borrow from money lenders:
● Quick Online Applications
Given the digital advantage, borrowers can fill in the application form with identity details, monthly income, and necessary information through the designated portals. Next, they should wait for the approval and collect it from the agency.
● Time-Saving Process
Gone are those days of visiting the money lender’s office and discussing the conditions physically. Through an online portal, a borrower can handle these things within minutes.
● Fast Approval
In case of a medical emergency, time can be your biggest enemy. Fast loan approval can save lives, and money lenders approve a borrower’s loans within minutes. For instance, reliable money lending agencies like GS Credit can approve your loan within the same hour.
● Lower Chances of Rejection
Even if your credit score is low, you still have the chance to get personal loans. The money lenders will then evaluate your ability to repay the loan amount on time.
● Suitable For Emergencies
Accidents are unpredictable. And you may find yourself in a cash crunch while handling such issues. Withdraw a personal loan from a reliable money lender, and they can complete the entire process within one business day.
Despite these perks, some authorised money lenders may propose high interest rates. Thus, before approaching a licensed moneylender for personal loans, be sure of your financial capacity.
If you’re confused about which money lender to approach, apply for a personal loan at GS Credit.
Get Six Times Your Monthly Salary
Personal loans can be your immediate lifesaver for every occasion that demands a sudden cash injection. With a multitude of personal loan options and several financial sources offering them, a borrower can easily apply for ad-hoc finances.
If you’re still wondering, “how much personal loan can I take out”, keep in mind that it differs between banks and money lenders. While a borrower gets to withdraw a maximum of six times their monthly salary, certain banks offer 10 times their monthly paycheck.
Therefore, choosing a personal loan scheme requires meticulous thinking and consideration. Look into the aforementioned factors to identify what kind of personal loan package can match your criterion.
If ever in doubt, seek help from professional advisors or peers who’ve gone through the loaning process.