Personal loan interest rate wooden blocks

If you need a money loan Singapore, you won’t need to look too far. Online, you’ll find a great number of options available from banks and licensed moneylenders. Any borrower with excellent credit scores should prioritize working with banks to improve them further, especially if they can successfully repay the entire financing.

On the other hand, licensed moneylenders — the legitimate microlenders setting themselves apart from loan sharks — are under the Ministry of Law’s regulation. They’re the best financing option for your immediate financing needs. Many Singaporeans who need an enormous amount of cash on the same day have always seen success working with a licensed money lender.

In this short post, you’ll learn about the best bank and licensed moneylender loan rates in Singapore. Plus, you’ll learn which lender is perfect for specific situations.

Best Personal Loan Interest Rates 2024

We’ve chosen these five excellent bank personal loans because of their nominal interest rates for borrowers. Additionally, all the items in the list we provide below assume a borrower who wishes to borrow S $20,000, which they can pay in 1 year and earns a minimum of S $2,000 monthly

  1. DBS Personal Loan
    If you’re a DBS account holder, it’s easy to borrow anything within S $20,000 thanks to their regular personal loan products. It has a 3.88% interest rate with an average effective interest rate of 8.99%. Additionally, its processing fee is a flat S $200.
  2. POSB Personal Loan
    Like DBS, POSB has a nominal interest rate of 3.88% and an EIR of 8.99%. POSB’s personal loan service can provide you S $2,000 and take only S$200 as a processing fee.
  3. OCBC Extra Cash Loan
    OCBC’s personal loan service has an excellent 12.31% interest rate with over 26.32% effective interest rate. However, you can pay for 12-60 months. Its interest rate is a flat S $200 for loans reaching up to S $22,000.
  4. OCBC Cash on Installments
    An alternative to OCBC Extra Cash is the Cash on Installments for existing customers. With a 4.7% interest rate and EIR of 10.45%, you can borrow up to S $20,000 with a S $200 processing fee.
  5. Raffles Credit
    Truthfully, Raffles Credit is a licensed moneylender, which greatly differs from a bank. However, they can provide you up to six months of your monthly salary at a 4% interest rate for 12 months payment. If you’re not qualified to use any of the banks above, you can count on Raffles Credit’s lending services.

Banks vs Moneylenders: Comparison Table


Loan Amount

Interest Rate

Repayment Period

Other Fees

Approval Speed


6-8 times your monthly salary

Higher than 4% per year

1-5 years

Processing Fees

4-6 weeks

Licensed Moneylenders

6 times your monthly salary

Maximum of 4 percent

12 months

Processing fees no more than 10% of loan principal or S $60

1 hour

Why Borrow From Banks?

Singapore’s financial institutions offer the best loan amounts and applications. While it’s difficult for junk and poor-credit borrowers in the country, any customer with excellent credit scores can have case-specific financial products fully compatible with numerous merchants and government institutions. For example, if you’re planning to ride with the bank’s yearly HDB loan repricing as an alternative to the government’s HDB concessionary loan, you can do so if you are eligible and can pass all the requirements. Here are three top reasons to use bank financing whenever available.

  • You’ve Got Excellent Credit Scores
    Good credit scores virtually guarantee immediate bank loan application approval. If you perform well in paying back and managing your loan’s overall needs, you’ll get credit score improvements after your financing closes. Banks are your best option with your top-tier credit scores.
  • You Need Higher Loan Amounts
    A licensed moneylender can only offer you six times your monthly salary. On the other hand, banks can give you about eight times your salary or a six-figure sum on average. If you’re a preferred borrower, banks can increase the loan limits, especially if they trust your financing instincts. Suppose a bank’s offer and terms suit you than a licensed moneylender’s proposed sum. Then, it’s better to choose the bank’s option.
  • You’re an Account Holder
    Truthfully, it’s better to use your bank if you’re an account holder because many similar products from other banks have the same terms, loan interest rates, and more. However, if another bank offers a better deal, the effort to open a new account, make a deposit, and go through the application process might be worth all the trouble. It’s best to perform excellent research aligned with your financial goals and available time.

How to Apply

With most banks, the application process is simple.

  1. Visit their respective product website or head to their branch nearest to you to inquire and apply.
  2. The bank will request that you open a new banking account to facilitate loan payments in the future. Most banks have this as a pre-requisite.
  3. Once done, they will ask for you to prove your eligibility and submit supporting documents and other requirements they have
  4. They’ll ask for you to wait for the loan application results, which usually takes about a month to a month and a half.


Virtually, all banks require borrowers to be:

  • 21 years of age and above
  • Employed
  • Has an Excellent Income-to-Debt Ratio
  • Qualified Credit Scores
  • Optional Collateral For High-Amount Loans


Borrowers may need to submit the following to their banks:

  • Proof of Identification (Such as NRIC or Work Pass for Foreign Applicants)
  • Proof of address (billing statements, letters, and documents, etc.)
  • A formal letter with proof of employment
  • Your rental agreement, if available.

Why Use Licensed Moneylenders?

A licensed money lender is a community-oriented financial institution. With the Ministry of Law’s help, microlending has become a streamlined and profitable practice free of bad actors, such as loan sharks. Truthfully, a licensed money lender has sums lower and less ideal than banking institutions because of their limited financial resources. However, with their regulated practices, borrowers with poor credit scores can have financing opportunities and even recover their credit score.

It’s wise to use licensed moneylenders if you have any of the following:

  • You Have Poor Credit Scores
    An excellent licensed money lender does not use credit scores to evaluate its applicants. Instead, it focuses on the borrower’s income and stability. Truthfully, licensed money lenders can perform a hard pull on an applicant’s credit rating, but licensed moneylenders in Singapore will only use it for an overview. It will not affect the borrower’s chances. Their credit evaluation allows them to recommend better and manageable loan amounts for their prospective borrowers.
  • You Have Ample Financial Needs
    Many Singaporeans and foreigners can freely use a licensed money lender’s personal loan services for any purpose. Unfortunately, licensed money lenders have less lucrative resources than banks. Many lenders can provide up to six times your monthly salary for personal loans. Additionally, they can offer a higher but limited amount for business loan applicants.
  • You Need Immediate Cash
    Banks and financial institutions have hundreds of thousands of loan applicants every day. Therefore, their loan application processing takes some time to accomplish its task. On the other hand, once you submit all your requirements, lenders will release your financing the day it gets approved — even on the day, you applied for it. This is greatly useful for borrowers who need cash immediately for medical emergencies or any situation needing an enormous amount quickly.

How to Apply

Like banks, a licensed money lender in Singapore has its steps to apply for a loan:

  1. Visit their website or head to their branch nearest you
  2. Bring requirements and other qualified supporting documents validating your eligibility
  3. Wait for your loan application results
  4. Upon approval, you get your money.


As the Ministry of Law requires, a licensed money lender in Singapore can only work with the following borrowers:

  • 21 years old and above
  • Employed
  • Singaporeans/PR: Earning S $2,000 per month
  • Foreigners: Earning S $3,000 per month


Here are the requirements and supporting documents most lenders will ask from you:


  • Identity card / NRIC
  • Proof of residences such as a recent bill or letter addressed to you (only applicable if you do not own the residence)
  • Tenancy agreement (only applicable if you are renting a flat)
  • Recent 3 months payslip and employment letter if your current employment is less than 6 months

Foreign Workers:

  • A valid work permit / S Pass / Employment Pass
  • Passport
  • Proof of employment (staff pass or company pass)
  • Recent 3-month payslips & employment letter
  • Proof of residences such as a tenancy agreement, recent bill, or letter addressed to you
  • Latest bank statement of account to which yearly or monthly salary is credited

How Are Personal Loans Useful For Borrowers?

A personal loan’s umbrella function provides a tremendous cash amount for borrowers to fulfill a purpose. It can be a down payment on a new property or car. The personal loan can finance a child’s first three years in college. While borrowers can use them to supply their daily needs, the loan interest rates make a budget much more feasible than the latter.

Therefore, a personal loan is most useful if you need an enormous amount during situations when you are short on time, such as the following:

  • Loan Consolidation
    Banking debt can be staggeringly high if you leave it unattended. Therefore, it’s best to use loan consolidation services to pay off your existing debt. On the other hand, if no consolidation service is available, you can use a licensed money lender’s low personal loan to refinance and lower your interest rate to 4%. While you’ll have less time because most lenders need you to pay within a year, it’s one of the best loan consolidation alternatives.
  • Home Renovation
    If you’re moving to your new condominium or HDB flat, you’ll want to check the electricity and water lines. If you want to renovate any other fixtures, you’ll want to take out a personal loan to finance your renovations.
  • Investments
    Singapore’s stock market and investment industries offer excellent avenues for growing your money. A personal loan can get you started with the capital you need.
  • Medical Emergencies
    If your savings cannot keep up with the ongoing expenses of you or a loved one’s medical emergency, you can take out a personal loan and pay for the expenses.
  • Vehicle Purchases or Repairs
    If you’ve won the lottery to purchase a new car in Singapore, a personal loan is an excellent alternative to in-house financing. Additionally, you can use it to repair an existing vehicle if you’re out of cash.
  • Weddings
    Sometimes, your wedding savings aren’t enough. Thankfully, the fast loan release services of licensed moneylenders can work to your advantage.
  • Business Ventures
    Like investments, you can create new business ventures with personal loans. Make sure you present an excellent business plan to qualify for business loans.

Considerations Before Finalizing Your Loan Application

To avoid spiraling into deep debt, you must learn about the following details before finalizing your loan application:

  • Loan Amount
    Always have an objective with your finances, and you’ll always focus on the most useful loan amount available. Don’t over-borrow; many indebted borrowers found themselves in their situation because of over-borrowing.
  • Interest Rate
    Mind the effective interest rate (EIR) of your prospective personal loans. Don’t settle for the marketed interest rate and make calculations using the EIR lenders to create the most accurate budget possible.
  • Loan Tenure
    Most personal loans allow you to pay for 12 months only. On the other hand, some allow you to pay as long as 60 months. However, keep in mind that long-term loans can have higher interest rates per year.
  • Additional Fees
    Both banks and licensed moneylenders will reveal all fees they’ve included in your loan application. Always assume processing fees will always exist.
  • Emergency Cash At The Same Day
    Banks can release loans after a month or a month and a half following your application. However, a licensed money lender, such as Raffles Credit, can release your loan within hours if you need quick cash.

Choosing The Right Lender Can Make All The Difference

Variety is always good as long as it helps you meet your financial objectives. Both banks and licensed money lending services can provide the optimal financing you need. However, make sure you’re working with dependable lenders for all your needs.

If you need personal loans applicable to foreign applicants, you can use Raffles Credit’s excellent loan service for all your needs. Visit our website or call us today to learn more about everything that we can do for you.