Because of the pandemic, everyone is struggling to go on with their lives. Some may struggle to finance hospitalization bills because of Covid-19 infection, stock up on groceries when we need to stay at home for safety, or with the utility bill that we need to settle to be able to work from home.
Foreigners in Singapore have experienced these emergencies, which made them look for the best personal loans as financial support.
If you are one of the many foreigners in Singapore looking to apply for the best personal loans and their requirements, this is the place for you.
Foreigner loan features
Foreigner loans, in simple terms, are simply personal loans for foreigners in Singapore who are in need of financial assistance. While it might seem that personal loans and foreigner loans are the same, foreigner loans are actually stricter than a normal personal loan in Singapore and this difference is reflected in some of its features.
It depends on your monthly salary just like a normal personal loan, which can give an approved loan amount that is equal to up to ten times (10x) your monthly salary with banks. The required minimum annual income for foreigners ranges from SGD 40,000 to 60,000, higher than the minimum annual income of around SGD 20,000 to 30,000 in personal loans for Singapore citizens.
Annual interest rates for a foreigner personal loan usually starts at around 3.4% up to 5.42%, although these rates are seen mostly in bank loans. The Effective Interest Rate (EIR), on the other hand, goes in between 6.5% to 10.96%. These two different rates usually differ between various banks and moneylenders.
Foreigner personal loans usually have a loan tenure of 1-5 years when applied for in banks. Usually, any kind of loan that banks offer has a higher maximum loan amount with a corresponding lengthy loan tenor to make it possible for debtors to repay. Money lenders, on the other hand, provide these loans as well on a lower maximum amount and tenure.
Aside from these useful loan details, it is also important to remember checking the various side fees that might be attached to your loan package, or if there are any hidden fees that you need to search for in the fine print of your contract. These various fees can be any of the following types of fees listed below:
One-time processing fee
This processing fee is commonly taken as a percentage of the loan principal and charged upfront when the loan is disbursed. This is charged as compensation for the effort made by the bank/moneylender to process your application. This fee can go up to 10% of the total principal.
Early repayment fee
This particular fee is calculated and charged by the bank to recuperate their loss of income when you completely pay the loan earlier than expected, due to the reason that they cannot earn any more from any interest rates for canceled future installment schedules. This fee goes around SGD 150-250 or a certain percentage of the outstanding principal that you currently have (around 2-5% for banks), whichever is higher.
This particular kind of fee is seen for bank loans with longer loan tenures. This usually accounts for the administrative fees needed to update and monitor your debit account with the bank for the duration of the tenure. Money lenders usually do not have this fee and are only charging for the one-time processing fee. This fee can go around SGD 500 to 3,000 for most credit line limits below SGD 1,000,000.
6 best foreigner loans in Singapore
Having discussed the features of foreigner loans, let’s now see the different banks and money lenders that offer personal loans for foreigners. This section has a good collection of top foreigner personal loans in Singapore. Hopefully, after reading this table, you will have your own pick of the best personal loan on the list.
|Name of Financial Institution||Annual Interest Rate||Effective Interest Rate||Loan amount/ Repayment period||Minimum Salary as a Foreigner|
|DBS/POSB||Starts from 3.88%||Starts from 7.56%||Amount: Up to 10x your monthly salary
Tenure: from 1 to 5 years
|OCBC||Starts from 5.42%||Starts from 10.96%||Amount: Up to 6x your monthly salary
Tenure: from 1 to 5 years
|HSBC||Starts from 3.4%||Starts from 6.5%||Amount: Up to 8x monthly income
Flexible repayment options
|Citibank||Starts from 3.5%||Starts from 7.85%||Amount: Based on your available credit line
Tenure from 1 to 5 years
|Available to Citibank credit card and ready credit holders|
|Standard Chartered||Starts from 3.48%||Starts from 6.95%||Must be an employment pass holder
Tenure from 1 to 5 years
|Raffles Credit||1-4% per month||Not applicable||Amount: Up to 6x your monthly salary
Tenure from 6 to 12 months subject to the terms and conditions of the agreement
|SGD 3,000 per month or SGD36,000 per year|
- The DBS personal loan has an annual interest rate starting from 3.88% and Effective Interest Rate starting from 7.56%. They allow a principal loan amount up to 10x your monthly salary, with a loan tenure ranging from 1 to 5 years. The minimum annual income that they require from foreigners in Singapore is SGD 45,000.
- OCBC’s annual flat interest rate starts from 5.42%, with an Effective Interest Rate that starts from 10.96%. When it comes to the maximum loan amount, it can go up to 6x your monthly salary, with a corresponding typical lengthy loan tenure that ranges from 1 to 5 years. This foreigner personal loan also requires a minimum annual income of SGD 45,000, which is the same as the first entry on our list.
- If you apply for a HSBC personal loan, you will be able to avail of an annual interest rate for your loans starting from 3.4% and an Effective Interest Rate starting from 6.5%. They also offer a lower promotional interest rate for HSBC premier customers for a cheaper loan compared to other personal loans. HSBC personal loan can also go up to a maximum of 8x your monthly income, with flexible loan repayment schedule options, as well as a minimum annual income requirement of SGD 40,000, which is lower than the usual requirement from other banks providing similar kinds of loans for foreigners.
- Citibank’s Citi Quick Cash Loan starts its personal loan interest rate from 3.5% and Effective Interest Rate from 7.85%, with corresponding processing fees. They can also offer you a processing fee waiver. Depending on your available personal line of credit and available credit limit, the loan tenure can be from 1 to 5 years and serviceable through online banking. To avail of this loan, you must be a Citibank credit card and ready credit holder.
- Standard Chartered personal loan starts its interest rates for your loans from 3.48%, with an Effective Interest Rate starting from 6.95%. Take note that you must have a valid Singapore work pass/employment pass to be able to avail of this loan. The loan tenures of this personal loan in particular range from 1 to 5 years, with a minimum annual income requirement of SGD 60,000.
- If you’re looking for a fast application with no collateral necessary and favorable interest rates capped at 4% per month, then Raffles Credit is the right choice. With a minimum salary of $3,000 per month they can provide up to 6 times your monthly income in loans– without a high credit score requirement. The application process only takes an hour too for eligible borrowers.
Our verdict: the best bank for foreigners
If you are looking for the best personal loans for foreigners in Singapore, the banks in the above list will offer a good deal for foreigner loans.
The best loan for this category would be HSBC personal loan that is offering the lowest interest rates among the different bank-based personal loans, plus the lowest minimum salary requirement for foreigners looking for personal loans in Singapore. Also, they offer numerous perks if you have an existing HSBC personal line of credit, such as HSBC Debt Consolidation Plan.
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Alternative to banks’ foreigner loan
A drawback of choosing banks when applying for a loan in Singapore is that they take a longer time to approve your loan application, given the fact that they are very stringent in their process and will review more aspects of your eligibility status. These negative aspects of banks are where money lenders have their strengths.
- They offer a less stringent approval process
- A good credit score will help with your loan application with moneylender, but is not a requirement, which makes it possible to apply for a loan even with a bad credit score or credit history
- Their monthly salary requirement is more relaxed compared to banks, meaning you can avail of a loan in Singapore even with a low salary.
In fact, you can get approved for a maximum credit limit equal to 6x your monthly salary if you are eligible enough. Interest rates for these personal loans are also quite low and regulated by law (maximum interest rate of 4% monthly), as long as your money lender of choice is licensed.
To apply for loans in Singapore, you need to take note of the eligibility criteria:
- At least 18 years old
- Minimum salary of SGD 3,000
The steps of the loan application process are as follows:
- call or apply online with your money lender of choice,
- set an appointment to discuss the loan details,
- enjoy instant approval and receive your cash loan disbursement quickly
Here are the required documents for the loan application:
- Work Permit/S-Pass/employment pass
- Proof of residence (utility bill or residential tenancy agreement)
- Proof of employment (certificate of employment/employment letter or recent 3 months payslip)
- Proof of income (bank statement/ bank accounts statement)
- SingPass (for IRAS website login)
How to choose the best foreigner loan
Weighing the options for the best personal loans as a foreigner is very similar to how you weigh other kinds of personal loans in Singapore. After all, most of the unique characteristic of a foreigner loan lies with its eligibility criteria and required documents. Other aspects of it are similar to other loans. Having said that, these are the aspects that foreigners in Singapore need to consider before applying for a loan.
Interest Rates and Side Fees (Processing Fee, Penalty Fees, etc.)
Banks and money lenders might have a few percentages of difference if you compare them side by side, but these percentages of interest rates (including the Effective Interest Rate) will greatly affect your total loan payment.
Picking the best interest rate is one of the tips to make your loan servicing easier. Various side fees, such as processing fees, are based on a certain percentage derived from the debt principal, so they are also important enough to be checked.
The weight of the monthly installment is another very important aspect that foreigners in Singapore must consider when choosing a loan. Interest rates should also be anticipated with every installment that you make, therefore it is important to remember your limitations and only apply for a loan that you can manage to pay off.
Other things to know about foreigner loan
What is the difference between personal loans and foreigner loans?
A foreigner loan is almost the same as a personal loan, with the exception of its significantly stricter eligibility criteria and document requirements.
Is the loan application/approval process relatively harder for foreigner loans?
It is not impossible or painstakingly hard for foreigners to get their loan request approved. As long as you meet the necessary documents and eligibility criteria related to your employment in Singapore, such as employment passes and your bank statement, it will be easier to get your fast cash loan disbursed.
Are there any details that a debtor should check before applying for a loan?
Just like any other type of loan, you need to always check the interest rates, side fees such as the processing fee, and your loan repayment details. These fees might affect how you pay your financial accountabilities after your application is approved, so check up on these to ensure that your repayment will be successful later on.
- Foreigner loans provide the means to address financial woes legally, instead of resorting to loan sharks or illegal money lenders.
- Loans provided by banks and legal money lenders are totally safe and regulated by Singaporean law, down to their interest rates and eligibility criteria.
- In choosing a particular foreigner loan, you must check the loan’s terms and conditions, including interest rates and processing fees, as well as your eligibility for approval and required documents.
- Make sure that you are capable of paying for the loan that you are aiming to apply for. Anticipate the monthly installments through computing the declared interest rate and prepare your payments.
If you are looking for a licensed money lender and the best personal loans for foreigners with a fast application process, Raffles Credit Pte Ltd is your best bet. Request for a free quote today!