There are certain things to consider before you apply for a personal loan in Singapore. The Singapore banks and licensed moneylenders place a few criteria and conditions. It is only after fulfilling those conditions you can get the loan.
This article intends to inform you about how to apply for a personal loan in Singapore. What are the things that you need, eligibility criteria, especially for those whose income is low.
Minimum annual income
In Singapore, to get a personal loan, the bank checks your minimum annual income. Suppose a person is a Singapore citizen, the bank offers a personal loan to those whose annual income is S$30,000 or more. And if you are a foreigner, then your annual income needs to be S$40,000. But it is very crucial to note that everybody’s income is not the same. There are people in Singapore whose annual income is low. Does that mean they won’t get a personal loan from the bank?
Provisions for low-income individual
In Singapore, there are provisions for low-income people to get the loan as well. There are some top-notch banks and money lenders who give personal loans to low-income people.
Suppose an individual citizen’s income is S$20,000 in a year. He/she is eligible to get a personal loan. You can also get an interest-free loan. Most banks offer an interest rate of 3.88%, 3.7%, and 3,99% per annum.
Age limit to get personal loans
There is also a particular age limit to get a personal loan in Singapore. A person below or above that age limit is not given a loan. To get a personal loan, you should be at least 21 or a maximum of 65 years of age.
Licensed money lender
If you do not get a loan from the bank, you can go to licensed money lender in Singapore. In Singapore, the Ministry of Law has a list of the names of all the money lenders. These licensed money lenders follow all the guidelines so that you don’t face any trouble later. These money lenders explain to you all the terms and conditions of the loan. The interest rates that they charge are 4% per month. If you consider taking a loan from a moneylender, you should not rely on one of them. You should compare with others and choose what is best for you. They approve your loans faster than the bank. Banks usually take more time as they scrutinise everything before approving the loan.
Documents required for the loan
To get the personal loan, you are also required to show some documents to the bank. These include-
- Your identification proofs such as Singapore Identification Card (IC) or Employment Pass (EP) with your passport.
- You will also need to show your address proofs. It should contain documents of your residential address.
- You will also need to show your income proofs. It will include your Central Provident Fund for the past 12 months or the latest computerised Payslips or latest Income Tax notice of assessment etc.
The bank, after receiving these documents from will check them properly. If the bank finds all the documents right, they will approve your loan.
Things to consider before taking a personal loan
Certain things are essential to consider before taking a personal loan. It is more important to those who have a low income.
- First, it is advisable to find out the effective interest rates or EIR.
- You should also find out the extra fees that you may need to pay- processing fee, late payment fee, or penalty if you pay back the money before time.
- You should also find out the amount of money you need to pay every month as instalments. The longer is the period, the higher interest you need to pay.
- You should also see how much you can borrow. It is absurd to borrow more than you need.
Things to know about personal loan
Singapore loans personal is a great way to get a large sum of money. They are best suited for conditions like an emergency when you need instant cash. Thus if you have weddings, medical emergencies, family emergencies, education expenses, etc., taking a personal loan is the best decision.
When you opt for a personal loan, you get a substantial amount of money. It has a fixed interest rate and time. You need to repay the money to the lender within the stipulated time. If you fail to repay within the given time, the lender can take action and take you to court. If you pay the money before the time, you will also need to pay a fine. You can repay the money through instalment, every month for a few years.
Recent restrictions on loans
In recent times the Monetary Authority of Singapore (MAS) has limited the amount of money the Singapore people can borrow. They have particularly taken this step to stop the people of Singapore from borrowing a large amount of money. As, if they borrow too much money, they will suffer from financial difficulties. It can also have an appalling effect on the economy of the country.
To sum up
People only take loans when they are in dire need of money. Taking a loan does not eradicate your financial problems. You always have to pay back the loan. Therefore before taking any loan, it is always advisable to check everything. So that in the future, you may not fall prey to any trouble.
There are many people in Singapore whose incomes are low. For them, there are special provisions. You only need to find out the perfect offer. There are various banks and licensed money lenders. They give different types of benefits for people with low income. You should search for them, compare them and then choose the correct option.
This article hopes to benefit you and help you to get all the details related to personal loans.