Although it is one of the smallest countries in Southeast Asia, Singapore is still considered one of the best places to live in. According to a Mercer poll, Singapore tops the quality of living and personal safety ranking for Asia. This is why this country is very attractive to foreigners as well.
However, Singapore is also known as one of the most expensive cities to live in. Singaporeans and foreigners alike may face financial challenges from time to time. So if you’re a foreigner living in Singapore, what are your options? Can a foreigner get a loan in Singapore?
Fortunately, banks and licensed moneylenders in Singapore offer personal loans to ex-pats to help them tide over financial difficulties. Read on to find out more.
Foreigner Loan vs. Personal Loan: Key Difference
Typically, there are not a lot of major differences between a personal loan for foreigners in Singapore and for locals. A foreigner loan is just like a personal loan offered to non-citizens working, and/or living in the country.
Both loans help individuals tide over financial difficulties. The key difference is in the eligibility criteria. Foreigners need to meet a higher income requirement. Plus, there are additional document requirements, such as an Employment Pass.
Key Difference: Foreigners are required to have:
- A minimum annual income between S$40,000 and S$60,000
- Proof of identity, such as Passport
- An Employment Pass with 1-year validity
- Proof of employment such as an employment letter, bank statement
- 3 months’ payslips
- May be required to apply with a guarantor
Singaporeans are expected to meet a minimum annual income of at least S$20,000 to S$30,000. Plus, they will only need to bring their NRIC and limited documents. In some banks, Singaporeans can apply using MyInfo with SingPass and their details will be automatically filled in.
6 Best Foreigner Loans In Singapore
|Maximum Loan Amount||Interest Rate||Processing Fee||Minimum Annual Income|
|HSBC Personal Loan||Up to 4x monthly income up or to S$100,000||3.4%||S$0||S$40,000|
|Standard Chartered CashOne||Up to 4x your monthly income||3.4%||S$0||S$60,000|
|OCBC ExtraCash Loan||Up to 6x monthly income for annual income S$120,000 and above Up to 4x monthly income for annual income S$30,000-S$199,999||5.43%||S$100||S$45,000|
|Citibank Quick Cash||Up to 4x your monthly salary||3.45%||S$0||S$42,000|
|DBS Personal Loan[R3]||Up to 10x your monthly salary if your annual income is S$120,000 Up to 4x your monthly salary||2.88%||1% processing fee||S$20,000|
|Raffles Credit||Up to 6x your monthly salary if your annual income is more than S$20,000||1-4%||a fee not exceeding 10% of the principal of the loan when a loan is granted||S24,000|
1. HSBC Personal Loan
HSBC Personal loan is one of the best personal loans in the market. First of all, they offer a competitive interest rate of 3.4% p.a. – which is within the average loan interest rate range in the market. Secondly, they offer flexible repayment options with one of the longest tenures in Singapore – up to 7 years. Lastly, they don’t charge a processing fee which helps lower the total cost of the loan.
With HSBC Personal Loan, you can loan up to 4x your monthly salary or a maximum of S$100,000. However, you need to meet the minimum annual income of S$40,000.
2. Standard Chartered CashOne
Compared to all the other major banks on this list, Standard Chartered CashOne has the highest minimum income requirement – S$60,000. Despite this high requirement, you can only borrow up to 4x your monthly salary. On the other hand, they offer a competitive interest rate of 3.4% and do not charge a processing fee.
3. OCBC ExtraCash Loan
Among the banks listed in the table above, the OCBC ExtraCash Loan has a high-interest rate of 5.43%. On top of that, they also charge a high processing fee of S$100. This makes it one of the most expensive personal loans for foreigners.
With this personal loan, you can borrow up to 4x your monthly income. To qualify, you’ll need to meet a minimum annual income of S$45,000.
Need to borrow a higher amount? You may be able to borrow up to 6x your monthly salary if your annual income is S$120,000 or above.
4. Citibank Quick Cash
With Citi Quick Cash Loan, you can borrow up to 4x your salary at an attractive interest rate of 3.45% p.a. Plus, they also offer a flexible repayment plan option ranging from 12 to 60 months. To qualify, you’ll need to meet the minimum annual income of S$42,000 which is only slightly higher than HSBC Personal Loan. Lastly, Citibank Quick Cash does not charge a processing fee.
However, you’ll need to have a Citibank Ready Credit or Citi Credit Card account to avail of this loan plan.
5. DBS Personal Loan
The DBS Personal Loan is one of the best options with a competitive interest rate of 2.88% p.a. However, keep in mind that they will be charging a 1% one-time processing fee. This factor can increase the total cost of the loan.
If your annual income falls between S$20,000 and S$119,999, you can borrow up to 4x your monthly salary. Need to borrow a higher amount? Then you’ll need to have an annual income of at least S$120,000 to borrow up to 10x your salary. This personal loan plan is available for foreigners with existing Cashline and/or Credit Card accounts.
6. Raffles Credit
What if you can’t meet the eligibility requirements of major banks?
Raffles Credit, one of the top licensed money lenders in Singapore, is a good option for foreigners who are looking for a personal loan. For secured loans, you can borrow any amount since this type of loan requires collateral.
For unsecured loans, you can borrow up to 6x your salary if you earn at least S$24,000. Remember, licensed money lenders in Singapore can only charge up to a 4% interest rate. Take a look at the table below to know more about your options:
|Borrower’s annual income||Foreigners residing in Singapore|
|Less than $10,000||$500|
|At least $10,000and less than $20,000||$3,000|
|At least $20,000||6 times monthly income|
How To Choose The Best Foreigner Loan?
The best personal loans for foreigners are not created equal. That said, you need to compare your options before making any significant financial decision. Below are some of the factors that play a big role in choosing the best one.
- Interest Rate, Fees, and Charges: Interest rates differ between banks and lenders. A low-interest rate is naturally more attractive. However, you also need to take into account the additional fees and charges. For instance, a loan with a low-interest rate may end up becoming more expensive if the fees are too high.
- Effective Interest Rate: This rate represents the true cost of the loan. It takes into account the interest rate, fees, and other charges to establish the loan. Use EIR when comparing interest rates between different loan types.
- Loan Tenure: While a longer-term loan lowers your monthly repayments, it may also increase the total amount of interest you’ll pay throughout the life of your loan. A shorter term, on the other hand, will help you lower the total interest but you’ll have to pay higher monthly repayments.
- Repayment Flexibility: There are banks or lenders that offer flexible repayments. For instance, you can choose between a weekly and monthly loan repayment schedule. Choose one that suits your financial capacity. Plus, ask if your bank or lender allows for early repayments without fees.
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Alternative Financing Options
Personal loans for foreigners is a great option when you’re short on cash as it can be used for just about any purpose. It’s definitely one of the most affordable and convenient options. However, there are alternatives you can explore.
1. Credit Card
Unlike a foreigner loan where you’ll get a lump sum amount, credit cards offer revolving credit. It allows you to make a purchase and pay it back in instalments. Some credit cards offer a 0% introductory interest rate for a fixed period. Plus, if you’re able to pay the full amount you owe every month, you can avoid paying interest.
However, one of its major cons is that credit cards have higher interest rates than personal loans. That said, if you fail to make repayments on time, your debt may get out of hand.
How To Apply
Depending on your credit card provider, you can apply via mobile or internet banking. Here are some of the most common documents required for foreigners:
- Passport and valid Employment Pass
- A copy of your utility/telephone bill
- Income Tax Notice of Assessment and latest original payslips
2. Personal Line of Credit
A personal line of credit works similarly with a credit card. However, they have lower interest rates than the latter. This financing option is more flexible than personal loans since you don’t have to decide how much you need to borrow upfront. Plus, you can access the funds whenever you need them. Lastly, you’ll only pay interest for the amount you’ve withdrawn.
The downside is that you may be tempted to borrow more than you can afford. And some banks or lenders charge a fee for keeping the personal line of credit open.
How To Apply
- You must be at least 21 years old
- Minimum annual income of S$40,000 for foreigners
- Employment Pass with a validity of at least 6 months
Remember, the eligibility requirements and application process may vary between banks and financial institutions.
3. Payday Loan
Payday loans are for individuals who need smaller sums of money. And typically, they are meant for borrowers with a bad credit score or limited credit history. This is because most lenders don’t check your credit history or credit score.
As the name suggests, you’ll have to pay back the lump sum within a month or on your next payday. It has a very short loan tenor which can lead to your tight budget.
How To Apply
You can apply via the official website of the licensed money lender.
- Submit your online application form and the necessary documents. You can also reach out through the phone.
- Upon confirmation, you’ll be asked to visit the lender’s office to finalize your loan package.
- When you’ve signed the loan contract, cash will be disbursed within the same day.
4. Home Equity Loan
A home equity loan, also known as a second mortgage, involves using your property as collateral. This option is available for foreigners with private properties and HDB Executive Condominiums. Just like a personal loan, the lump sum from this loan can be used for any purpose. One of the biggest risks with a home equity loan is that if you fail to pay off your debt, your property will be repossessed.
How To Apply
Take a look at the following qualification criteria before looking for a home equity loan:
- Your property must be private property, not HDB
- You must have lived in the property for at least 5 years
- Maximum tenure of 35 years
- Loan-To-Value (LTV) limit of 75% still apply
- If the LTV is below 50%, the total debt servicing ratio (TDSR) requirements are not applicable
- You cannot use your CPF funds for repayments
Foreigners will begin their CPF contributions after assuming a Permanent Resident Status. That said, if you have a CPF contribution, you can use the fund from your CPF Ordinary Account to buy a home, finance your education, and more. You can also use your CPF OA savings to pay for the downpayment of your home.
Frequently Asked Questions
1. How Many Personal Loans Can I Apply For?
The Monetary Authority of Singapore (MAS) implemented an unsecured debt limit to help individuals from taking on too much debt. The total amount of unsecured personal loans you can have is capped at 12 times your monthly income. Most personal loans offered by banks or lenders are up to 4x your monthly income. So you can borrow up to 3 personal loans.
Note that if you’re borrowing from a licensed moneylender, you can borrow up to 6x your monthly income.
2. Do I Need To Have A Guarantor When Applying For A Personal Loan?
Some banks and financial institutions may require ex-pats to have a guarantor when they apply. This is especially true when you don’t have a credit score. One of the factors that banks look into is your intention and ability to stay in the country throughout your loan tenure.
That said, banks may be unwilling to approve your loan if you don’t have a guarantor or have a poor credit score. Thankfully, there are other options to consider such as borrowing from a licensed moneylender.
3. What Happens After I Get My Personal Loan?
Once you’ve completed your loan application and submitted the necessary documents, your lender will evaluate your application. Banks may take a few days to a few weeks to process your loan. Moneylenders, on the other hand, can disburse cash within the day.
To stay on top of your monthly payments, consider these tips:
- Set a budget: Make sure that you have enough for the monthly payments. Create a reasonable budget and don’t overspend.
- Consider automatic payments: When you set up an autopay, your recurring payments will be automatically deducted from your bank account and sent to your lender. This will ensure that you’ll be paying the lender on time and avoid late fees. However, you need to keep your bank account well-funded.
- Don’t miss any payments: Failing to make payments on time will lead to late fees and late interest. This will lead to more debt. So if you’re unable to make your monthly repayment, reach out to your lender to consider other payment options.
- Personal loans help individuals tide over financial difficulties and can be used for just about any purpose.
- The key difference between a personal loan for foreigners and for locals is in the eligibility criteria.
- To qualify for a personal loan, foreigners living in Singapore need to meet a higher income requirement – between S$40,000 and S$60,000.
Getting a personal loan as a foreigner living in Singapore will require additional paperwork and extra effort. Plus, you’ll also need to meet the high-income requirement if you want to borrow bigger loan amounts. But when you need financial support, there are alternative options available.
If you don’t qualify for bank loans for whatever reason, consider seeking the assistance of a licensed moneylender. Raffles Credit is among the top 10 licensed moneylenders in Singapore. They offer low-interest rates from 1-4% only. Check out our services today to find the best personal loan plan that meets your needs.