Personal Loans Guide

Personal Loans Guide Singapore

Quick Loan

Written by Lee

Published on 7 August, 2022

Key Takeaways

This article explains how personal loans work in Singapore, including how interest is calculated and repayments structured. It covers the typical uses of personal loans, such as emergencies, education, or debt consolidation. It highlights the benefits of borrowing from licensed moneylenders like Quick Loan, including faster approvals and more flexible eligibility criteria. The article also offers tips on improving loan approval chances, such as maintaining a good credit score and planning finances. Overall, it provides a clear guide on when and how to apply for a personal loan, what costs to expect, and how to manage repayments effectively.

A personal loan comes in handy when you need a significant amount of money to meet a personal need or emergency in the short-term.

Personal loans are a life-saver when you are faced with an unfortunate medical emergency and are strapped for cash. You can also use personal loans to realize other necessities such as vacation travels, sizeable purchases, and other large expenses.

In Singapore, financial institutions such as banks are not the only personal loan lenders available to borrowers. Licensed moneylenders also offer personal loans.

Personal loans are unsecured loans with no collateral such as a house or other assets. Financial institutions and moneylenders analyze your credit score to understand your creditworthiness.

Borrowers with a good credit score are more likely to get personal loans with low interest.

Personal loans in Singapore are well-known for their flexible terms and easy availability, which means you can get your emergencies and issues addressed without any delay.

Read further to know how personal loans work in Singapore and what you can do to get the best personal loan interest rates.

Table of Contents

How does a Personal Loan Work?

A personal loan starts with an application process. You are required to submit essential documents for the approval process to start. Once approved, you will receive a significant amount of money, depending on the amount of loan approved.

There is a fixed rate of interest on the borrowed amount – the principal – which you are expected to repay within the scheduled time period.

When you make repayments for a personal loan, you repay not only the principal amount but also

the interest and other applicable fees. The entire amount needs to be paid within the agreed timeline.

Personal loans usually require you to pay a pre-specified fixed amount in installments, over the loan repayment period. This period can range from a few months to several years, depending on the loan amount and the lender, among other factors.

How is Interest on Personal Loan Calculated?

Most personal loans are designed for fixed monthly payments repayable over a few years, depending on the loan amount.

In most cases, personal loans come fully amortized. This means, your monthly repayments would include the principal amount as well as the interest. The principal amount is the original loan amount you are offered.

A personal loan calculator involves monthly repayment of the principal sum along with interest.

Amortized personal loans are affordable because the amortized amounts fit easily into your budget. As you will be paying monthly principal amounts, you will not have to worry about balloon payments – paying the entire loan amount at the end of the loan period.

Personal loan interest rate for licensed moneylenders in Singapore is 4% on the reducing balance. Customers are required to pay a fixed amount of money per month. The monthly repayments include both the principal amount and the interest.

How to Calculate Personal Loan Payments and Costs?

A personal loan calculator can help you determine your monthly payments with accuracy. You can also use it to compare interest rates and repayments while searching for a lender.

Extending on the example above, let us calculate the various personal loan components for the loan amount of S$20, 000:

Loan Details Values
Loan Amount $20000
Annual Interest Rate 4%
Loan Repayment Period 4 years
Monthly Principal Amount (loan amount)/(total no of months)
$20000/48 = $416.67
Monthly Interest (Annual interest rate)/100/12
4/100/12*20,000 = $66.67
Total Monthly Loan Payment Monthly principal + Monthly interest
$416.67 + $66.67 = 483.34

So, for a loan amount of S$20, 000, the total monthly repayment you would need to make is about S$483.34.

When is a Personal Loan Best?

A personal loan is best when you need a generous amount of cash immediately. While there is the obligation to repay the loan over the scheduled period, a personal loan can help you meet your immediate needs.

Some life situations where the use of personal loans can be advantageous, include:

· Medical emergencies

· Family crises

· Education expenses

· Weddings and holidays

· Property renovations

· Pay off existing debts

Is a Personal Loan Good to Pay Off Existing Debt?

A personal loan can help you repay credit card debts. People with a good credit rating often choose to take a personal to clear their credit card dues.

A personal loan is also a viable solution to consolidate multiple high-interest debts into one single manageable and repayable debt. By clearing off your debts with a personal loan, you may even witness an improvement in your credit score.

Tips to Get Instant Approval on a Personal Loan

Getting the best interest rates at the lowest monthly repayments in a fast and secured way is what every personal loan borrower wishes for. This expectation need not be a dream though. You can get the best interest rates and monthly repayments with the following tips.

Choose a Licensed Moneylender

Licensed moneylenders employ technology to get things done fast. You can apply for a loan online, which moves the process faster, saving you time and efforts. When you need a personal loan for an urgent need, time is of essence and the faster the process, the better.

Loan approval is also faster with licensed moneylenders. You do not have to wait for days to know whether your loan has been approved or not. The process for loan application and approval takes only 30 minutes with a licensed moneylender in Singapore. You will receive your loan cash on the spot, upon approval.

Eligibility for loan qualification is more relaxed with licensed moneylenders in Singapore. The qualifying income range is wider and the rates of rejection are usually lower.

Your repayment capacity is the major criterion for moneylenders. Your application is less likely to be rejected if you qualify for repayment.

Loans from licensed moneylenders can be a life-saver when you are faced with crises such as accidents or medical emergencies. With their easy and flexible process, getting cash in hand within a day is not impossible.

Monitor your Credit Score

The key to getting instant loan approval is maintaining a healthy credit score. Avoid late payments, and consider keeping your credit low. Without proper credit monitoring, your debts can become unmanageable.

A good credit score also depends on your credit history, recent credits and the extent of your credit.

Plan your Finances Before Taking a Personal Loan

Be prepared with a budget beforehand to understand where you have to minimize expenses. With a plan, you will be better prepared to pay your monthly repayments. Delay or failure in monthly repayments can be prevented with a budget plan. You will also prevent the risk of going overboard with your expenses, which can lead to more debts.

A personal loan can bring several advantages to the table for anyone who is in the need of urgent cash and liquidity, and these can be used for a wide variety of applications, unlike other forms of specific loans. A personal loan can help you get out of tricky situations while helping you consolidate all your existing loans into a single unit as well. By lending from a licensed moneylender in Singapore, you can be assured that you will be getting the best deal there is, and the quick and simple approval and disbursal process would make the experience a breeze, so as to say.

In Conclusion

Personal loans in Singapore offer multiple benefits. There are no legal restrictions specifying how borrowers can and cannot use their personal loans. The process for loan application and approval is easier and faster, and even instant in case of emergencies.

As a borrower, you get more than adequate time to repay your loan. Interest rates for personal loans are cheaper. With no collateral, the risk of your property being seized, does not practically exist.

With its many practical benefits, personal loans in Singapore are a faster and an efficient way to address your life’s needs.

Personal loans are the best when it comes to meeting a sudden need for cash, and these loans can be used for a wide variety of purposes. Be it for medical emergencies, or for sudden business needs, a personal loan can come in handy. In Singapore, Quick Loan offers personal loans that can help you meet your short term liquidity needs. These loans are unsecured, and are not backed up by any asset guarantee. The lender would analyse your credit-worthiness. Personal loans are extremely flexible, and their terms and conditions are determined on the basis of their particulars like repayment terms, principal amount, etc.

How to Apply for Personal Loan in Singapore FAQs

There’s no legal cap on how many personal loans you can take in Singapore, but lenders set their own limits. Banks, under regulations, may let you borrow up to 12 times your monthly income if you have strong credit. Licensed moneylenders can borrow you up to 6 times your monthly income. 

Yes! You can take another personal loan. However, it would be prudent to first make sure you have enough income left after repaying your first loan.

Having multiple personal loans doesn’t automatically hurt your credit score. In fact, making on-time repayments can help strengthen your credit over time. Just be sure to stay on top of your monthly payments to maintain a healthy credit profile.

If you’re having trouble repaying your loans, reach out to your bank or lender early. Staying in contact shows responsibility and may help you find a workable solution. Most lenders in Singapore will be able to provide you with a reduced repayment plan. 

Avoid going silent, as disappearing can lead to legal action. This includes debt collection, and even being blacklisted by lenders.

Yes! Consolidating your personal loans can help combine multiple debts. This will only lead to a single monthly payment that’s easy to manage.

You can do this through a debt consolidation plan. This is usually offered by banks or licensed moneylenders. This approach often comes with better repayment terms, and reduced overall interest cost.

There are a few ways to manage your monthly repayments for multiple loans:

  1. Set up automated payments to avoid missing due dates.
  2. Turn on payment reminders from your lender and mark key dates in your calendar.
  3. Use repayment strategies like the snowball or avalanche method.
  4. Lastly, be sure to keep a simple budget to track everything clearly.

Yes! Foreigners can apply for more than one personal loan in Singapore. They will first have to meet the eligibility criteria. This includes showing a valid work pass, stable income, and a good repayment history. Always check with the lender, as requirements may vary.

You can contact your bank or licensed moneylender directly to discuss. Most lenders in Singapore are open to helping borrowers work out a revised repayment plan. This includes flexible repayment options.

QuickLoan Pte Ltd is a licensed money lender in Singapore, serving you since 2010. We reside in International Plaza Tanjong Pagar, giving you the best financial assistance. Our Services include personal loan, payday loan, business loan, renovation loan and foreigner loan and more with instant approval! With our simple application process, you can look forward to fast cash within 20 minutes. What’s more, you can enjoy greater peace of mind with our low interest rates and affordable repayment plans. We’re licensed by the Registry of Moneylenders, so you can rest assured that your dealings with us are fully regulated, legal and transparent.