From exorbitant home rental prices, medical emergencies, to living cost adjustments, foreigners would often find that living in one of Asia’s most expensive cities is quite an ordeal.
To help keep expats or foreign workers head above water, a safe way to fulfill financial obligations is through a Foreigner Loan.
Loans for Foreigners are designed specifically for foreigners who are living and working in Singapore. In the past, it may be difficult for foreigners to take out a loan from any financial institution in the country, but recognizing the need for a budgetary cushion for foreign workers, banks, and licensed credit companies now makes it easier and widely available.
In this article, we’ll guide you on how personal loans for foreigners work, where to apply, and how to take one.
Personal Loan Eligibility Conditions for Foreigners
Before heading off to your preferred lender, it is important to determine first if you are qualified to apply. While the process may not be very much different from loans offered to locals, one key thing that lenders would like to secure is the borrower’s intention to stay in the country for the duration of the loan tenure.
Let’s take a look at the requirements.
- A copy of passport
- A valid work pass (PEP, S-Pass, or E-Pass)
- At least 21 years of age (for bank foreigner loan)
- At least 21 years old (for licensed moneylenders)
- Employed on a full-time basis
- Proof of residency (utility bills, tenancy agreement, and other bills reflecting the address and name of borrower)
- Proof of Income (bank statement)
- Proof of employment ( recent 3 months payslip and certificate of employment)
- SingPass (to log in to IRAS website)
In Singapore, Credit Scores or Credit History are another crucial requirement to be able to apply for a loan, especially when you consider taking it out from a bank. You may check with banks first if borrowers could obtain an alternative document or references instead of a traditional credit check.
The good news is, if you’re unable to secure a loan from banks due to stricter requirements, you can rely on Licensed Moneylenders such as Raffles Credit since they require no credit score checking.
Personal Loans for foreigners that are sure to be safe and legal are offered only by Banks and Licensed Moneylenders. But how do they differ?
Aside from the difference in the eligibility requirements, your decision in choosing between the two will be framed by the loanable amount, interest rates, loan tenure, and minimum income requirements.
In our review of top banks offering personal loans for foreigners in Singapore, the interest rate would range from 3.4% to as much as 5.43%, and effective interest rates (EIR) from 6.5% – 10.96%.
Each bank requires a varying minimum annual income which starts at $40,000. This may be high for an average expatriate, but the loanable amount, usually 4x the monthly salary, can be relatively higher than those offered by licensed moneylenders.
Aim for banks that waive the processing fee or with ongoing interest or repayment promotions to make the most out of your loan.
Since authorized credit companies are governed by the Ministry of Law, the interest rate to be charged cannot go higher than 4% plus a 10% processing fee.
With a minimum monthly income requirement of $3,000, a foreign borrower could easily take out a loan as much as 6x the monthly salary without the burden of a credit score or credit history prerequisite.
We have collected the latest data from the top banks in the country to compare competencies and for you to find which institution offers the most suitable personal loan.
|Bank Product||Loanable Amount||Interest Rates||Loan Tenure||Minimum Annual Income||Remarks|
|DBS Personal Loan||Up to 4x the monthly salary (10x if annual income is above $120,000)||3.88% pa (EIR from 7.56% pa)||1-5 Years||$45,000||
|HSBC Personal Line of Credit Instalment Loan (HSBC Personal Loan)||Up to 4x the salary income (8x if annual income is above $120,000)||3.4% pa (EIR from 6.5% pa)||1-7 Years||$40,000||
|Standard Chartered CashOne Personal Loan||Up to 4x the monthly income (capped at $250,000)||3.48% pa (EIR from 6.95% pa)||1-5 years||$60,000||
|OCBC Extra Cash Loan||Up to 4x monthly income (6x if the minimum annual income is above $120,000)||5.42% pa (EIR from 10.96% pa)||1-5 years||$45,000||
|Citibank Quick Cash (new customers)||Up to 4x monthly income||3.5% pa (EIR from 7.85% pa)||1-5 Years||$42,000||
Licensed Money Lender
|Lender||Loanable Amount||Interest rate||Loan Tenure||Minimum Monthly Income||Remarks|
|Raffles Credit||Up to 6x the monthly income||4%||Flexible terms||$3,000||Borrowers with lower monthly income may still be considered (see review below)|
Summary of the table
DBS Personal Loan
Its 3.88% pa interest rate makes DBS Personal one of the lowest in Singapore. The bank offers instant cash disbursement to approved online applicants. Among the bank personal loans listed, DBS Personal Loan offers the lowest loanable amount starting at $500, so it is ideal for borrowers looking to take a small loan amount with immediate disbursement.
HSBC Personal Line of Credit Instalment Loan
Consider HSBC personal loan if you are looking for a long-term line of credit with a higher loanable amount since they offer one of the most affordable interest rates in the market. HSBC personal loan also waives the first year’s annual fee ($60) for HSBC Personal banking Customers.
Standard Chartered CashOne Personal Loan
Although SC CashOne Personal Loan has the highest minimum annual income requirement, you can enjoy a low interest rate of 3.48% and zero processing fee if you qualify for the loan. Borrowers must pay a one-time annual fee of $199 and $0 for the succeeding loan duration. Guarantees instant approval for existing SC customers.
OCBC Extra Cash Loan
OCBC’s ECL may not be the lowest in terms of interest rates but offers fixed monthly payments for over 12 to 60 months, making it a good option for borrowers seeking long-term loans. Borrowers must have an active EsiCredit or Credit Card account to be eligible.
Citibank QuickCash (New Customers)
Customers who are new to Citibank and are looking for a short-term loan with a smaller loan amount that starts at $1000 would find Citi QuickCash one of the best personal loans for foreigners. To fully enjoy the competitive 7.5% EIR, borrowers may want to opt for loans with a shorter loan tenor of 1-3 years.
Raffles Credit – Foreigner Loan
Foreigners with a monthly salary that cannot meet those banks may find it easier to apply at Raffles Credit.
|Borrower’s Annual Income||Maximum Loan Amount|
|Less than $10,000||$500|
|At least $10,000 but lower than $20,000||$3,000|
|At least $30,000||Up to 6x the monthly salary|
The interest rate varies depending on the loan tenure and the amount you will take but rest assured that it will not exceed 4%. With simpler requirements, the approval is guaranteed to be swift and efficient, usually taking just one hour. But just like any other loan, make sure to settle your repayments on time to avoid a $60 late payment fee. With that said, Licensed Moneylenders are ideal for foreigners who were unable to take out a loan from a bank and need immediate cash solutions.
Now we have the figures and the list of your loan options, let’s define and understand how these factors would determine your decision since not all personal loans are created the same.
- Interest Rates – A lower interest rate doesn’t always mean it is the most competitive personal loan. It is easier to spot the bank loan that offers the lowest interest rate but also review the processing fee, annual fees, and other charges that will add to your overall loan amount.
- Effective Interest Rate (EIR) – You will come across EIR on bank products and notice that the percentage is higher than the published interest rate. That is because EIR includes the flat interest rate, processing fee, and other charges making it easier to compare with other personal loans available.
- Loan Tenure – To put it simply, personal loans with longer loan terms usually entail higher interest rates. A few exceptions from other bank promotions may show that the quicker you pay, the higher the interest rate is since they are profiting from the monthly repayments of longer personal loan tenures. So, it is crucial to study how a loan term would be of your advantage before signing your loan application.
- The flexibility of repayment terms – The reason why published interest rates aren’t definite is because of the agreed repayment terms. Discuss with your lender the repayment frequency and amount of monthly payment and how much it would cost you if you choose to defer the loan earlier. This would save you a lot of money from interest and fees over time.
- Promos, discounts, or cashbacks – It is easy to get enticed by attractive bank loans promotions, but always discern if it is to your advantage. The first thing to define is the amount that you actually need and your capacity to repay. Some promos would require you to take out a large sum with a promise of cashback if repaid quickly, but always make your objective the starting point. Ultimately, only take out what you really need.
- Lender’s Reputation – It is easy to fall into a trap when an emergency situation strikes. Always be mindful, smart, and prudent when seeking out a financial solution. Talk only to reputable lenders with profound and professional assistance that provides an efficient and safe borrowing experience, just like Raffles Credit. Being in the industry for over a decade, we have established ourselves to be one of Singapore’s best personal loans providers and have garnered notable awards.
Is the loan interest rate for foreigners in Singapore higher than for locals?
The truth is there is no definite answer since the approval and terms of the loan depend on the lender. It may be observed that the loan processing is not much different than those offered to locals, but, to give you an idea, Licensed Moneylenders like Raffles Credit caps the interest rate to 4% regardless of the borrower’s nationality.
In the absence or lack of a credit score report when seeking a loan from a bank, borrowers may secure references and must have no prevailing balances from other lenders or any unpaid dues to increase one’s chances of getting approved. Some helpful references include:
- Updated rental payment history
- Updated utility payments (such as water, electricity, gas bills, etc.)
- Independent/voluntary medical/life, auto insurances, etc.
- Educational Tuition
It would be best to prepare at least 3 references showing consistent and updated recent 12-month payments.
How do I know if a Moneylender is licensed?
The easiest way to find out if your preferred loan lender is licensed is by checking the Ministry of Law’s full list of authorized lenders. Foreigners must always be wary of loan sharks or illegal lenders since they are mostly the target of unauthorized lending schemes. Should you come across one, you may report to 1800 2255 529.
Moreover, Raffles Credit is one of the most reputable money lenders that offers foreigner loan in Singapore that advocate for equal opportunities for everyone, especially to expatriates in need of financial assistance or support for any personal reasons.
How long will it take for a personal loan for foreigners to be approved?
Banks usually promise a quick approval. But with tedious requirements for foreigners, it may take time to get approved. In emergency situations, you can always rely on licensed moneylenders like Raffles Credit. With the easy online application and quick response for appointments, you can receive your money in just an hour.
How does Foreigner Loan differ from a regular Personal Loan and Payday Loan?
What sets loans for Foreigners apart from other loan types are the minimum requirements, loanable amount, and repayment period.
Not all personal loan products offered by banks are applicable to foreigners in Singapore. And usually, they require a higher minimum annual income to be qualified aside from the stricter requirements.
As for licensed moneylenders, Foreigner Loans are dedicated exclusively to foreign workers or expatriates in the country and require different, but equally easy-to-produce requirements like those of Personal Loans for locals. On the other hand, Payday Loan are short-term loans that allow borrowers to take an amount equivalent to one month’s salary and must be repaid in less than a month
How can we help you and why borrow from us?
With over 10 years of financial service experience, Raffles Credit has gained the trust and confidence of countless clients we have helped during difficult times.
We know that it is not easy to weather the situations especially during these challenging times, and at Raffles Credit, we do not discriminate thus, we promote inclusive assistance.
We evaluate loan applications based on:
- Ability to repay the loan
- Certificate of employment
- Proof of income
- Other identification papers
We make your borrowing journey easy and comfortable with our flexible and transparent repayment terms. And that begins with filling out our application form.