Nobody is exempted from emergencies. In most times, we fall short in our finances–regardless of our minimum annual income.
Consequently, foreigners in Singapore think that urgent financial assistance or a personal loan simply isn’t accessible to them. They think that access to emergency funds, personal loans, and other financial support will be a difficult challenge.
The good news is that you wouldn’t have to worry because the best personal loans for foreigners have been made available for you in Singapore. Let’s learn about what these personal loans are and how you can pick the best personal loan for your needs.
Personal loan vs. foreigner loan
Foreigner loans are personal loans that are designed exclusively as loans for foreigners. Foreigner loans can be used for whatever purpose foreigners would want to use them on–so they don’t need to declare what the loan will be used for. All they have to do is simply qualify for it–starting with their monthly salary and annual income.
In principle, a personal loan and foreigner loan are fairly much the same. The key differences between the two are that the conditions for eligibility for foreigners are different (and usually stricter) than for Singaporeans.
What Types of Foreigner Loans Are Available in Singapore?
- Personal installment loans are a common type of foreigner loan available in Singapore. These types of personal loans offer borrowers an upfront lump sum, which they then repay monthly during their tenure with that particular lender- usually around two years or so.
- Credit lines – also known as a personal line of credit – are another popular option amongst those looking for foreign funds: these open up possibilities by allowing individuals access money whenever needed through borrowing from institutions such as banks and other financial organizations when situations arise where they need quick cash.
- You should also consider a balance transfer or debt consolidation loan to help you pay off your debts and consolidate them into one manageable payment. For example with the balance transfer, it combines all of your current loans into just one new loan that is interest-free for 3-12 months. This helps because if you are paying back each individual company on time then they will charge different rates so by consolidating these payments in order to have only 1 monthly bill can save money over time!
How much can foreigners borrow with licensed moneylenders?
Unlike secured loans where borrowers can obtain loans of almost any amount, borrowers in Singapore can only access a certain maximum loan amount if they choose to push through with an unsecured loan.
With some banks, foreigners can borrow unsecured personal loans up to ten times the worth of your monthly salary. Some would base your maximum loanable amount on the available credit line you currently own.
|Your minimum annual income||Singapore Citizens and Permanent Residents||Foreigners living in Singapore|
|Less than S$10,000||S$3,000||S$500|
|At least S$10,000 but less than S$20,000||S$3,000||S$3,000|
|At least S$20,000||6 times your monthly income||6 times your monthly income|
How many personal loans can you have at once?
According to the Monetary Authority of Singapore’s (MAS) latest unsecured debt limit policy, foreigners can have unsecured loans with a total cap of 12 times their monthly income.
In other words, if they owe more than 12 times their monthly income across all the unsecured loans they have under them, they will be unable to apply for more personal loans, neither will they be given any further unsecured loan credit.
Foreigners in Singapore should be aware that borrowing excessively can hurt your personal line of credit and credit score. Experts would advise that since most licensed money lenders can generally lend you up to six times your income per month, the general rule of thumb is, therefore, to not exceed borrowing from more than two personal loans.
Is the best foreigner loan more expensive than a personal loan?
Banks’ interest rates between foreigner loans and personal loans vary–but are still similar across the board (1%-7% p.a.). Moneylender’s expat loans are the same as their personal loans, from 1-4% per month.
For a lot of foreigners, the biggest challenge in getting a loan in Singapore is not having a credit score. Now if you do have a credit background, your loan applications could still take days just to get approved.
This is why many foreigners attest that, because of swift approvals, convenience, and easy loan requirements, choosing to loan from moneylenders is somewhat a wiser choice for them–costs-wise.
Who qualifies for a foreigner loan and what are the requirements?
If you want to apply for moneylenders’ foreigner loan in Singapore, you should be at least 18 years old and have at least S$ 2,000 as your salary or income.
In addition to these qualifications, foreigners in Singapore should be able to provide the following documents below to support their loan application.
- Proof of identity (this includes a valid passport)
- Employment pass of 1 year validity or S-Pass/ Work Permit (or valid Singapore work pass)
- Proof employment (an employment letter is required if you have been employed with them for less than three months)
- Proof of residence in Singapore (such as your residential tenancy agreement or most recent utility bill, pub bills, or even your phone bills)
- Payslip for the last three months (to show your annual income)
- Proof of monthly income (such as your account statement, income tax statement, or bank statement)
- SingPass (log on into the IRAS website)
Traditional banks’ requirements are usually stricter–so remember that this specific requirement item is dependent on the bank you are applying for, as well as their approval policies–because these types of requirements may apply if you are a foreigner working as a freelancer or simply working on a Letter of Consent.
In addition to the requirements stated above, banks may further request for the following:
- Additional guarantor (if you have no credit score).
- Proof of earning (if you have less than 3 months of work experience, self-employed, or on commission)
- Latest CPF statement or latest income tax assessment
- Other supplementary documents such as a certificate of employment (to prove that you will still be residing in Singapore throughout the duration of your loan tenor).
Where can a foreigner get a loan in Singapore?
Aside from doing a balance transfer, generally, banks in Singapore offer loans for foreigners to their customers. However, you have to be mindful of the terms and conditions, flat interest rate, processing fee, and other administrative fees charged against you by the banks.
Let’s dive into the few options available from major banks across the country. Banks in this set includes:
- HSBC personal line
- Standard Chartered
In a nutshell, these are what banks could offer for you. Some may charge you a one-time processing fee:
|Loan provider||Annual interest rate||Effective interest rate||Remarks||Minimum foreigner income|
|OCBC Bank||From 5.42 %||From 10.96%||Loan up to six times your monthly salary, with a loan tenure from 1 to 5 years.||S$45,000|
|HSBC Personal Loan||From 3.4 %||From 6.5%||Loan up to 8 times your monthly salary, multiple repayment options available.||S$40,000|
|Standard Chartered Bank||From 3.48 %||From 6.95%||Primary eligibility requirement: employment pass holder; loan tenure is from 1-5 years||S$60,000|
|DBS/POSB||From 3.88%||7.56%||Loan up to ten times your monthly income, with a loan tenure from 1 to 5 years.||S$45,000|
|Citibank||From 3.5 % (processing fees)||From 7.85%||Max loan amount depends on the available credit line, with a loan tenure from 1 to 5 years.||Loan available to Citybank credit cardholders holders|
Now, let’s take a look at these products in detail:
DBS Personal Loan
Standard DBS personal loans would usually be up to 4x your monthly income but can range up to 10 times if you are earning S100,000 or above. As foreigners your required minimum income should be at S$45,000 and would need an active DBS/POSB account, as your amortizations shall be paid through this account. According to DBS, if your loan gets approved, you will receive a promotional 1% cashback. A processing fee is included.
OCBC Personal Loan
OCBC Bank’s loan product can provide you up to six times your monthly income as long as you are a foreigner earning at least S$120,000 or above. Monthly payments can be spread across a maximum of 60 months, and special promotions are said to be available in between, especially on your processing fee. For instance, you can receive a 1% cashback if OCBC Bank approves your loan.
HSBC Personal Loan
HSBC personal loan products are known to have relatively viable interest rates with flexible monthly payment options. Depending on the personal circumstances you are in, they can provide you with up to eight times your earnings. If HSBC approves your loan, you may also be eligible for a S$2000 cashback as one of their special offers or a higher processing fee.
Citi Quick Cash Loan
If you already have a Citibank account in Singapore, you might want to explore their Citibank Quick Cash product. With your online banking application or through your online banking account, you can apply easily and pay them back across 60 monthly amortizations. As their special offer, you can be eligible for various cashback vouchers with Grab once you get approved of the loan and the processing fee.
Standard Chartered Bank
In comparison to the other banks mentioned above, Standard Chartered has stricter eligibility criteria, requiring their applicants to have a minimum income of SGD 60,000. Also, their loan products are available to those who have an employment pass. The good thing about taking this loan is that if you are already Standard Chartered’s customer and meet the minimum eligibility requirements, they will no longer require further documentation from you and can grant you your loan in a matter of minutes given a minimal processing fee. Just be aware that processing fees might exist.
Alternative to Banks’ Foreigner Loan: Licensed Moneylenders
An alternative to the traditional personal loans you can avail of from banks in Singapore is to transact with licensed money lenders.
While banks across the country are known to be established financial institutions and with cheaper loans, moneylenders are composed of entrepreneurs and businessmen who are regulated by the Registry of Moneylenders.
To make sure that you are transacting with the right people and agencies, check to see if the moneylender is registered under Singapore’s Registry of Moneylenders.
To get a clearer picture of the loan features set by money lenders, let us look at the following table:
|Traditional Banks||Licensed Moneylenders|
|Amount they lend||Larger sums||Smaller sums yet more accessible|
|Ease of loan disbursement||Tedious, take multiple business days||Same day disbursement|
|Eligibility criteria||Stricter||More relaxed|
|Credit checks||Stricter credit history evaluations||More flexible, poor credit score holders could still avail of loans|
|Transparency level||Loan details are easily accessible to the borrower||Loan details are easily accessible to the borrower, extra help is offered in choosing loans that suit you best|
|Interest rates||4% to 10% per annum||1-4% per month|
How do you choose the best loans for foreigners?
Financial decisions should be made with proper and informed choices. Be sure to compare all your loan options before signing up. In general, best personal loans charge lower interest rates than credit cards and are transparent with their additional fees.
To be able to choose the loan plan that works best for you, keep in mind the following list:
- Compare the total cost of each loan. Identify if there is a processing fee waiver or if there is an early repayment fee.
- Be mindful of the interest rates and other fees
- Understand the value behind effective rates and flat interest rate
- Think about the true economic cost (effective interest rates) of your loan as you compare them to other loan product options
- Review various loan fees and understand the cost differences behind them
- Be informed about your minimum annual income
- Consider your loan repayment schedule and your payment options under each loan product. Usually, loans with longer amortization periods require smaller monthly payments.
Other Questions You Might Be Looking for Answers
How do you know whether a moneylender is licensed or not?
With so many moneylenders out there, it can be difficult to tell which ones are licensed and who isn’t. It’s important that you do your due diligence before taking on a loan from an unlicensed lender because the rates will be higher than what is legally allowed in Singapore. You don’t want to end up paying even more for something that could have been done through legal means instead!
To find out if someone is licensed or not, go online and search for them- once again make sure they’re reputable by checking their reviews beforehand. The Ministry of Law has also created a list of all the licensed lenders.
Which financial institution is the best for foreigners?
DBS Personal Loan offers the best loans for foreigners because of its low initial requirements. It has a S $42,000 annual income requirement and ten times your monthly salary as a loan amount limit.
Standard Chartered’s CashOne is also a good choice because it has a S $250,000 maximum amount limit. Out of all the loans for foreigners in Singapore, it has the highest amount available. However, you’ll need to comply with its high annual income requirement.
Opt for licensed moneylenders if you want up to 6 times your monthly salary with a minimum income of just $2,000 per month.
What should you do after being granted a foreign personal loan?
If your loan gets approved, make sure that moneylenders provide you with the correct principal amount of the loan. It is important to know that they are only permitted to deduct you an upfront of a loan approval fee up to a maximum of 10% of the total principal amount.
After being granted a personal loan, you should make sure that your loan installments are paid on time throughout your loan tenure. Make sure that you get to receive a statement of account regularly from the money lender and always double check for correctness. Lastly, remember to keep all account statements and receipts as proper documentation and evidence for your payments.
What should you do if you would want to report a licensed money lender for unfair practices?
If you think that a moneylender engages unfairly towards you, you can consult with the Registry of Moneylenders through their telephone number at 1800-2255-529.
Rest assured that your anonymity towards the moneylenders will be kept secret by the Registry unless you consent to share it otherwise. The Registry will be able to guide you through your complaint provided that you give them the relevant information and documents they need in relation to your loan transactions with the moneylender. Complaints are always taken seriously, and unfair lenders will be taken to task.
There are plenty of loan options available in the market, including those offered by banks. We should be mindful of their documentary requirements and prerequisites, as the process of fulfilling these may be more tedious than those required by moneylenders. Here are some takeaways:
- Loan products offered by banks can offer a higher maximum loan amount than licensed moneylenders, but these might not be as easily accessible compared to those offered by moneylenders.
- Because bank loans are backed up by a wider array of pooling funds, they can offer longer monthly repayment schedules and lower interest rates but will take you time before accessing such funds.
- To be able to find the best personal loan product for you, you should consider their interest rates, transaction fees, as well as their repayment options, and monthly payment schedules.
If you would want fast, convenient, and affordable access to personal loan options for foreigners, consider applying for Fortune Credit, a licensed moneylender in Singapore. Request for a free loan quote now!