Singapore offers plenty of opportunities for both locals and foreigners. To start working in Singapore, foreigners must have a valid pass, such as an Employment Pass. But despite these opportunities, Singapore still remains one of the most expensive countries to live in in the world.
For this reason, ex-pats are more susceptible to financial difficulties. Thankfully, banks and licensed moneylenders in Singapore offer financial assistance for foreigners. But foreigner loans have different requirements versus personal loans for locals.
The key difference is in the eligibility criteria. Typically, foreigners need to meet a higher income requirement. Plus, they will be approved based on their salary and employment permit type. Here is a simple guide for taking out a personal loan for work pass holders.
Best Foreigner Loans Offered By Banks in Singapore
Foreigners working in Singapore now have more loan options than ever before. However, banks still consider ex-pats as high-risk borrowers. That said, you will have to meet higher income requirements and will be charged higher interest rates than locals.
Here are some of the best bank personal loans for foreigners:
|Bank Name||Interest Rates||Loan Amount||Minimum Income|
|HSBC Personal Loan||3.4%||Minimum S$1,000 to a maximum loan amount of S$200,000 or 4x your monthly salary
|Citibank Quick Cash||3.45%||Minimum S$1,000 to a maximum loan of up to 4x your monthly salary||S$42,000|
|DBS Personal Loan||2.88%||Maximum of up to 4x your monthly salary||S$20,000|
|OCBC ExtraCash Loan||5.43%||Minimum S$1,000 to a maximum loan amount of up to 4x your monthly salary||S$45,000|
|Bank of China $martLoan||6.62%
(flat interest rate)
|Minimum S$1,000 to a maximum of up to 4x your monthly salary||S$40,000|
Verdict: Which Is The Best Bank?
From the list above, the DBS Personal Loan is one of the best options for foreigners with a competitive interest rate of 2.88%. Plus, they also have a significantly lower minimum annual income requirement at S$20,000.
If your annual salary falls between S$20,000 and S$199,000, you can borrow up to 4x your monthly salary. However, this personal loan is available for foreigners with an existing Cashline and/or Credit Card account.
The next best option is the HSBC Personal loan. They offer an interest rate of 3.4% and you can borrow up to S$200,000 or 4x your monthly income. However, you need to meet a higher minimum annual income requirement of S$40,000.
But what if you don’t meet the eligibility requirement of most banks?
Alternative: Licensed Moneylenders
Licensed moneylenders in Singapore will still take into account the borrower’s monthly income and employment status. However, unlike banks and traditional financial institutions, they don’t require high annual income requirements or a good credit score.
As long as foreign applicants have a complete set of supporting documents and fulfill the money lender’s eligibility criteria, they can borrow up to 6 times their monthly income.
Additionally, the interest rate of personal loans with licensed moneylenders is capped at 4% per month. This is applicable to both secured and unsecured loans.
The downside? Personal loans have a short tenure of up to 12 months. However, there are licensed lenders who can create a flexible repayment schedule for their clients.
But is it safe to borrow from money lenders in Singapore?
- Licensed moneylenders are registered businesses and they are regulated by the Registry of Moneylenders.
- They comply with the rules and regulations set by the Ministry of Law Singapore.
- Moneylenders are not affiliated with banks. They are often individuals or financing institutions offering bank loan alternatives.
- All licensed moneylenders are prohibited from soliciting loans via text messages, phone calls, or social media platforms.
- You can report threatening behaviour and errant licensed moneylenders to the Ministry of Law or the Registry of Moneylenders.
You can find the complete list of licensed moneylenders on the Ministry of Law’s website. Do not deal with a lender not registered on the list to avoid loan scams.
1 Fullerton Credit is registered with the Registry of Moneylenders and is among the top licensed moneylenders in Singapore. Established in 2009, they offer a wide array of cash loan options, including personal loans, foreigner loans, business loans, monthly loans, and payday loans. With over 500 satisfied clients, they have excellent 5-star ratings on Google Reviews and Loan Advisor.
Considerations When Choosing A Personal Loan for Foreigner
Loan interest, tenure, and terms and conditions vary depending on the bank or licensed moneylender. You need to dig deep and compare your options before making a financial decision. Consider the following factors when choosing a personal loan for foreigners.
- Interest Rate: When comparing different loan plans, you will come across different types of interest rates. And it’s not easy to compare them. Say, a loan with a low-interest rate may still end up costing more if the fees and charges are too high. On the other hand, a loan with a higher interest rate but with low fees could be a better option.
- Effective Interest Rate: This rate reflects the true cost of the loan. It is calculated after considering the interest rate, fees, and other charges. This is a useful factor to consider when comparing loans with the same amount and tenure.
- Loan Tenure: A longer loan tenure will help lower your monthly repayments, making them more affordable. However, it will also increase the amount you pay in interest over time. On the other hand, a shorter term will decrease the interest but will also increase your monthly repayments.
- Repayment Flexibility: Choose a repayment schedule that you can abide by. Depending on your money lender, you may choose between weekly, fortnightly, and monthly repayments. Some lenders offer tailor-made loan packages to suit your needs.
- Early Repayment Fee / Late Fee: Ask your loan provider if there are fees and charges for early repayment of the loan. Doing so will help you save on interest.
- Reviews: Do a background check on the money lender of your choice. Look into their Google Review ratings, as well as what previous clients have to say on loan comparison websites, like Loan Advisor.
How To Apply For A Personal Loan For Foreigners?
Typically, foreigners need to meet higher income requirements when applying for personal loans. With a traditional bank loan, foreigners will need to meet a minimum annual income of S$40,000 to S$60,000.
If you’re planning on taking out a foreigner loan with a licensed moneylender, here are the general requirements:
- Minimum Age: At least 18 years old
- Minimum income: S$2,000
- Work Permit / S-Pass / Employment Pass
- Proof of residence such as utility bills or tenancy agreement
- Proof of employment such as certificate of employment if your job is less than 3 months
- Recent 3 months payslip
- Proof of income such as bank or account statement
- SingPass to log into IRAS website
Caveat For Foreigners
As a foreigner, you may face setbacks, especially if:
- You have an inconsistent credit history. If so, you may need to apply with a guarantor
- You’re a foreigner who will be staying in Singapore for a limited time.
- Your income does not meet the lender’s eligibility requirement.
Finding it hard to get traditional personal loans?
The loan services of a licensed moneylender are a good alternative. Credible lenders don’t require a high credit rating and a guarantor.
Tips After Getting Approved For A Loan
Once your loan is approved, you’ll receive the principal amount within the same day. A legal money lender in Singapore may charge up to 10% of the principal amount for an upfront administrative fee.
To stay on top of your payments, consider these tips:
- Keep necessary documents: These copies will serve as documentation for your loan. Doing so will also help you keep track of payments you’ve made towards your loan.
- A copy of the loan agreement
- Receipts for every payment made
- A statement of accounts for all your loans
- Copies of other relevant documents
- Create a budget: The lender will provide you with a repayment schedule with the repayment amount. So make sure to create a budget to save up for the monthly payments. Doing so will help you avoid overspending.
- Pay your repayments on time: When loans are repaid late, you may end up paying for late interest, plus other fees and charges. Additionally, late payments will also negatively affect your credit score. You can consider enrolling for automatic payments so you will never miss a payment.
Lastly, if you can’t make your monthly payment, reach out to your loan officers as soon as possible. You may be able to negotiate for an extension. Another option is to consider seeking help from social services.
Questions You Still Might Have
1. Are Interest Rates Higher For Foreigners Living In Singapore?
For banks, interest rates are higher for foreign nationals. With a money lender, the interest rate is the same for personal loans – both for locals and ex-pats. There is a 4% per month cap on interest rates for both secured loans and unsecured loans, regardless of the borrower’s income.
2. Where Can I Get A Personal or Foreigner Loan Fast?
Major banks in Singapore offer personal loans. The banks featured above can provide you with a foreigner loan as long as you meet the eligibility requirements.
Alternatively, licensed moneylenders in Singapore also offer flexible loan packages. You can borrow up to 6 times your monthly income. Since money lenders are less stringent when processing a loan application, you can get your loan approved within 30 minutes and get quick cash within the same day.
3. Can I Get A Loan With Only A Work Pass?
Most banks and licensed moneylenders will require a work pass when applying for personal loans as a foreign national. Your work pass is not the equivalent of SingPass so you can’t use it alone.
Additionally, you will also need to submit supporting documents as proof of employment and income. This is especially important when you don’t have a high credit rating or long credit history.
Getting a loan in Singapore as a foreign national will require higher eligibility requirements and extra paperwork. But if you find yourself strapped for cash, there are options available for you.
- Foreigner loans are just like personal loans offered to locals. The key difference is in the eligibility criteria.
- Loan interest, tenure, and terms and conditions vary depending on the bank or licensed money lender.
- Licensed money lenders are a good alternative to traditional bank loans. They don’t require a high minimum annual income and will only charge up to a 4% monthly interest rate.
While most people turn to banks to get loans, you may consider a licensed moneylender for faster approval. 1 Fullerton Credit is registered with the Registry of Moneylenders and provides the lowest possible interest rates. Get a loan quote today and find the best loan plan for your needs.