Singapore is one of the most expensive countries in the world. However, its open and forward-thinking government and society make it an attractive destination for foreign workers of different professions and income.
However, as in other countries, it can be challenging to find foreigner-friendly financing in Singapore. But, this is a thing of the past. The banking industry and financial institutions have set their guidelines that allow foreigners to borrow money from Singapore’s finance market. In short, foreign workers can conveniently apply for and take out financing from banks and other financial institutions.
What is a Foreigner Loan?
While it does not significantly differ from Singaporean personal loans, Singapore foreigner loans have additional guidelines and requirements for foreigners. Truthfully, these requirements are understandable because Singapore law has some legal limitations in keeping foreigners in line.
A foreigner loan is a personal loan that has the same amount any Singaporean can borrow. However, they need to fulfill a higher minimum income range, additional documentation, and extended investigations on income and credit history from their home countries.
The borrowing process is similar. Foreigners can use online banking portals to apply for a bank’s foreigner loan offers. This portal is different from Singaporean-only portals and has its respective requirement fulfillment portals in line with standard foreigner loan requirements (more on this later).
How Convenient is it For Foreigners to Get Loans?
Truthfully, it’s quite challenging for foreigners to get loans in Singapore. However, with Singapore’s bankers and financial institutions introducing much more lenient and helpful requirements for foreigners with their foreign worker-specific products, it’s become a lot easier than before.
However, a loan for a foreigner in Singapore will have different requirements than their Singaporean counterparts. For example, banks, financial institutions, and licensed moneylenders will ask them for a different set of income and address proof. Additionally, foreigners’ minimum income requirement is always higher because they have no credit history or record at all in Singapore.
Are Personal Loans and Foreign Loans Different?
A foreigners loan in Singapore works similarly as a personal loan. However, it will have higher interest rates than your typical services to lend money to Singapore citizens. As a foreigner’s personal loan, financial institutions expect them to pay it on time regularly, just as they would with traditional Singaporean loans.
One significant difference in foreign loans with Singaporean personal loans is the loan tenor. A foreigner loan cannot extend as long as Singaporeans can when it comes to their personal loans
Different Kinds of Foreigner Loans in Singapore
Here is a list of the best foreigner loans you can apply for in Singapore. However, don’t limit yourself to the financial products we’ve listed as available here. Shop around for the best offers — there are many!
| Interest Start Rate | Effective Interest Rate | Total Borrowable Amount | Minimum Income Required | |
| Standard Chartered CashOne Personal Loan | 3.48% | 7.99% | S $1,000 – 4x your monthly salary not exceeding S $250,000 | S $60,000 |
| Citi Quick Cash Loan | 4.55% | 8.5% | S $1,000 – 4x your monthly salary | S $42,000 |
| HSBC Personal Loan | 3.7% | 7.0% | S $5,000 – 8x your salary not exceeding S $200,000 | S $40,000 |
| OCBC Personal Loan | 3.5% | 7.27% | S $1,000-6X your monthly salary | S $45,000 |
The Usual Requirements for a Foreigner Loan in Singapore
Here are the most common foreigner loan requirements non-Singaporeans have to fulfill before submitting their loan application:
- Working Permit/E-Pass/S-Pass
- Passport
- Bank statement
- At least three (3) months of working payslips
- Billing statement or any statement that proves your residential address
- Tenancy Agreement
Only foreigners above the age of 18 and have employment or employ themselves can make a successful foreigner loan application.
Furthermore, foreign borrowers must accept that they’re a high-risk borrower regardless of their employment and tenancy agreement’s proof of residence and income. Banks will always favor Singaporean borrowers, as any banks in a country favor citizens more than foreigners when it comes to financial services.
Therefore, most banks may still issue rejections against foreigners who fail to fulfill their requirements if other borrowers have better credentials. Additionally, banks review hundreds of thousands of applications, making it crucial to try to apply for a loan with different banks and financial institutions
Some Things to Ponder Before Applying for Foreigner Loans
A foreigner loan should be a foreign worker’s last resort, especially if they’re just on their third month living in Singapore. The requirements we’ve listed above state that all foreign workers must submit at least three months of their work payslips. If you submit less than the requirements or none at all, banks can quickly reject your applications.
Additionally, banks in Singapore are incredibly stringent. They’ll nitpick every single detail you submit. If they’re not satisfied with just one aspect of your proofs or character, they may ultimately reject your application. Fortunately, charity funds and licensed money lenders can help foreign workers if they face rejections with multiple loan applications.
Here are a few more items you should consider before applying for a personal loan:
1. Income and Expense
We highly advise both foreign and Singaporean borrowers to keep a record of their income and expenses. The income-to-expense ratio must always be income only dealing with less than 40% of your total expenses before applying for any loan.
Truthfully, foreign worker loans are huge financial commitments with accompanying high-interest fees. If you have trouble paying it back, then the bank or financial institution will likely be cautious or frequently reject you due to your failure to comply.
2. Terms and Conditions
You’ve been successful with your application, and the bank wishes to interview you. Before you gather your employment pass and other requirements for foreigners in Singapore to take out financing, make sure to read your loan’s terms and conditions.
Check to see if it indicates your annual income and loan interest rate correctly (as the bank advertised or informed you beforehand). This process applies to foreign borrowers working with a licensed money lender.
3. Plan B When You Get Sick or Unemployed
Foreign workers have it more challenging than Singaporeans when they get unemployed or sick. Some might even have trouble funding their return back to their home country. Some banks, financial institutions, and moneylenders may ask you about the next steps you’ll take if they approve your financing.
If you can present a solid alternative plan, they will highly likely approve your loan. However, even if it isn’t a requirement, foreign workers who have a high chance of facing unemployment should put off using foreigner loans even if money lenders make it extremely easy to get one.
Do Foreigner Loans Have Higher Interest Rates?
The loan amount and interest rates for foreign workers are high because financial institutions reasonably consider them as high-risk borrowers. Foreign nationals in Singapore should always keep this in mind.
Are There Alternatives to Bank Foreigner Loans?
Banks are rigid and stringent, especially when dealing with foreign nationals with zero credit history in Singapore. However, licensed moneylenders are open to foreigners who can present their requirements and bank accounts. They won’t need to have any credit history at all to use their services.
It’s Easy to Find The Best Foreigner Loans By Working With Licensed Moneylenders
If you have yet to find a dependable foreign loan in Singapore, you can count on us at 1 Fullerton Credit to provide you with a fair and useful loan for all your needs. Contact us today to learn more about our services!
