Foreign workers in Singapore have limited commercial finance support from the country’s banks because they have zero credit history in the country. Due to this limitation, foreigners work with illicit loan sharks that endanger their resources and lives.
Thankfully, Singapore’s financial institutions have made it possible for foreigners to borrow money conveniently.
A great chunk of Singapore’s working populace is foreign workers. In December 2020, the Ministry of Manpower had listed 1.2 million registered Singapore foreign workers in the country. Thus, the government and the financial market must do their part to protect an enormous contributor to their economy.
In this short guide, we’ll help foreigners find the best banks and licensed money lenders for the best personal loans. Plus, we’ll include alternatives to bank-sourced financial products too. Continue reading to get the best foreigner personal loans fast.
How Does it Work?
Foreigner lending works like your usual personal loan transaction. However, financial institutions have more requirements for foreign workers because of the latter’s lack of credit history.
For example, banks have higher minimum annual income and monthly income requirements for foreign borrowers. In addition, banks will ask them for other documents like working passes and tenancy agreements.
Any eligible foreign borrower that complies with bank requirements will undergo the same process as Singaporean personal loan applications. On the other hand, foreigners have to deal with challenging penalties and consequences if they fail to pay their financing.
Foreigner Loan Eligibility
Foreigners who need a personal loan from banks or a licensed money lender have to comply with the following requirements:
- Must be 18 years of age
- Employed and living in Singapore
- Employment letter of offer
- Working Permit/S-Pass/Employment Pass
- 3 Months of Payslips
- Bank Statement
- 2 Years Notice of Assessment
- Proof of Billing (Tenancy Agreements, Utility Bills, etc.)
Foreigner Loan Lenders
Banks are the primary lenders to foreign borrowers. However, Singapore allows moneylenders to provide their low-cost financial services. Read more about each of them below.
Singapore banks have redesigned their personal loans to accommodate foreigners. However, they have higher foreign borrower requirements because of every foreigner’s high-risk profile and lack of credit history. Successful foreign borrowers can receive more than six times their monthly salary.
Licensed Money Lenders
Singaporean moneylenders that the Ministry of Law fully licenses can provide foreigners with six months of their monthly income. Most lenders have lenient requirements on credit scores, credit history, and minimum annual income.
Best Foreigner Loans in Singapore in 2021
Below is a list of the best foreign personal loans you can find in Singapore. Each has their respective benefits and pitfalls.
Foreigners should keep this table handy if they’re borrowing money from these banks soon.
Annual Minimum Income Requirement
HSBC Personal Loan
3.8 (7% Effective Interest Rate)
S $11,110 – S $20,000
Standard Chartered CashOne
3.88% (7.63% EIR)
S $11,164 – S $20,000
OCBC ExtraCash Loan
5.42% (12.11% EIR)
S $11,629 – S $20,000
Citibank Quick Cash
3.99% (7.5% EIR)
S $11,365 – S $20,000
DBS Personal Loan
3.88% (7.56% EIR)
S $11,374 – S $20,000
HSBC’s personal loan isn’t cash. Rather, it’s a credit card-like service equivalent to more than six months of a foreign borrower’s salary.
Both Singaporeans and foreign borrowers can use HSBC’s Line of Credit if they could fulfill the minimum annual income requirement. Foreign borrower minimum income requirements are much higher than local borrower minimums at S $40,000. In addition, HSBC’s Line of Credit has an indefinite loan tenor because of its credit card-like service.
HSBC’s Line of Credit has a high 3.8% interest rate (7.00% EIR). Thus, foreign borrowers must greatly consider using it only in dire financial situations.
Standard Chartered’s offering for foreign borrowers provides them with the highest maximum loan amount possible at S $250,000. Plus, you have a longer loan tenor with Stanchart’s CashOne with its 1-5-year loan tenor.
The bank’s foreigner loan offering is remarkable because it speedily delivers payouts for both Singaporeans and foreigners after approval. However, both nationals and foreigners might get turned off by its high 3.88% interest rate (7.68% EIR).
Therefore, foreigners earning enough cash to pay back S $250,000 plus interest have a reliable financial product they can use if time is of the essence.
OCBC’s foreign personal loan has the easiest application process available. Foreign borrowers can sign up for their online banking account. Then, they can digitally apply for an ExtraCash loan and auto-debit their future repayments.
ExtraCash from OCBC provides foreign borrowers up to six times their monthly salary with a minimum 1-5 loan tenure. Plus, it has relatively competitive interest rates of 12%.
You must keep in mind that OCBC’s digital banking requirements might be different from its ExtraCash loan requirements. Make sure to read the fine print before proceeding.
Citi quick cash loan is one of the highest payouts for foreign borrowers in Singapore if they can comply with its hefty S $42,000 minimum annual income requirements. Qualified borrowers can enjoy a high foreign borrower maximum loan amount available. However, Singaporeans with an excellent credit score will find this loan in Singapore one of the best choices available.
Citi’s Quick Cash Loan has an average 3.99% interest rate (7.5% EIR) for foreigners borrowing any amount. Thus, it slightly outperforms other foreign borrower personal loans with its high amount.
Applicants can access Citibank Quick Cash Loan’s application form using Citibank’s dedicated mobile app.
DBS’s foreign borrower personal loans provide the latter with up to ten times their annual income if they comply with its S $120,000 annual income requirement. Plus, it has a generous loan tenure of 1-5 years and affordable interest rates of 3.88% (7.56 EIR) yearly. Thus, DBS’s foreign loan in Singapore makes it one of the best products available.
Borrowers must use DBS’s dedicated mobile app to apply for DBS’ personal loan. Alternatively, foreign borrowers who already use DBS Cashline or their employers using DBS’s payroll bank accounts can easily apply for the bank’s personal loans. In addition, borrowers won’t have to submit their monthly income and bank statement in this way.
Which Bank Works Best For Foreigner Personal Loans?
Every foreigner loan in Singapore offers the same interest rate. Thus, the financial product’s highest loan amounts, longest tenures, and flexible payment options are observable areas that help you determine whether a financial product is suitable for your needs.
We highly recommend these two foreigner personal loans:
DBS personal loan is the best for low acquisition costs. It has the smallest minimum annual income requirement at S $42,000. Plus, it offers one of the highest maximum loan amounts by providing you with ten times your monthly income at a fair interest rate.
On the other hand, Standard Chartered’s S $250,000 maximum loan amount is second to DBS’s offer. Plus, it has a steep annual income requirement. However, it can supply your loan within days after its approval.
Licensed Moneylenders: A Great Alternative to Bank Loans
Many foreigners can’t get past most banks’ annual income requirements. Thus, many turned to illicit loan sharks in the past for financial aid. Thankfully, Singapore’s government has standardized its licensed moneylenders to protect citizens and foreign workers from predatory lending.
Licensed moneylenders can provide foreigners with substantial financing six times their monthly salary. This financing will have a 4% cap interest rate per month and a processing fee at a cap of 10% of the principal. Lastly, moneylender loans will give you one year to pay for your entire financing.
A few things to know about licensed moneylenders:
Foreigners have many misconceptions about moneylenders because of the rough history most of them experienced before the government’s intervention. Thus, we’ve made this list to dispel many of these myths:
- Licensed moneylenders comply with the Ministry of Law and Registry of Moneylender requirements. They go through a rigorous testing and licensing phase. Therefore, they’re not loan sharks.
- The Registry of Moneylender’s database gives you the complete list of moneylenders who can provide the best foreign financing.
- The government allows moneylenders to provide loans for foreigners in Singapore.
- MinLaw sets the interest rate, processing fee, and financing amount maximums that moneylenders can provide. Moneylenders that change the monthly salary, financing amount, and other specifications will face lending suspension and termination.
- Moneylenders provide loans for foreigners and permanent residents living in the country with virtually instant approval and payout after submitting all the requirements.
- A foreigner living in Singapore can build their credit score and history by using loans for foreigners.
Foreigners in Singapore must provide the following moneylender requirements:
- Work Permit/S-Pass/Employment Pass
- Proof of Residences, such as utilities or a residential tenancy agreement
- Utility bill
- Employment Letter from your Singaporean company
- Three months of your most recent Singapore payslips
- Latest bank statement reflecting your contract’s pay
Is a foreign borrower loan more expensive than a personal loan?
A bank with a high loan amount can lower its average total for foreigners in Singapore because it perceives the latter as high-risk borrowers. The bank can raise its product’s interest rate and monthly salary requirements to offset this risk. Therefore, foreigners in Singapore contend with higher expenses borrowing from Singapore banks.
Can I get a loan just by using my work permit?
Your work permit is the first bank requirement you must fulfill. However, you’ll need to submit more documents upon your lender’s request. For example, lenders will ask for your passport, proof of residence, annual income statement, employment offer letter, and other documents.
Which bank is the easiest to get a personal loan?
Foreigners already working with a bank will find the latter’s personal financing application process the easiest. Their existing bank record makes it easy to obtain loans for foreigners from their respective banks. However, they may face a higher interest rate and processing fee in exchange for their smooth experience applying for loans for foreigners in Singapore.
How much interest can moneylenders charge foreigners?
MinLaw stipulates that lenders can only charge up to a 4% interest rate per annum. Plus, they can only charge 10% of the principal as processing fees.
How long does it take to get financing?
The financing payout time greatly depends on your bank. The best foreigner financing might have the highest financing amount but can pay out only after two weeks. On the other hand, Standard Chartered and DBS can conveniently disburse your payout days after your application approval.
Foreigners Can Have Top-Quality Singapore Financing Too
- Banks and licensed moneylenders offer foreigner personal loans
- Foreigners have higher requirements because banks consider them as high-risk borrowers
- Foreign workers can borrow up to six times their monthly salary
- Moneylender foreign financing services enjoy the same interest rate and processing fee as Singaporeans
If you’re looking for the best personal loan in Singapore, you can always count on us at Fortune Credit. Our decades of experience providing outstanding loans in Singapore guarantee you’ll have an excellent and smooth experience working with us.