Singapore is extremely popular among expats. For one, the beautiful diversity of culture and people means foreigners can easily fit in. Additionally, foreigners are presented with a wide array of opportunities from international studies to career advancement. However, Singapore is also an expensive place to live in.
That said, some expats may face financial difficulties and need access to extra funds. Thankfully, banks and licensed moneylenders in Singapore offer personal loans to foreigners. However, the eligibility conditions are usually stricter for foreigners than for Singaporeans.
Here are the banks offering the best foreigner loans in Singapore and other alternatives.
Best Foreigner Loans in Singapore 2022
|Bank Name||Interest Rates||Loan Amount (min-max)||Minimum Annual Income|
|HSBC Personal Loan||3.7%||Up to 4x your monthly salary.
Minimum $1,000 to a maximum of $200,000
|At least $40,000|
|Standard Chartered CashOne||3.88%||Up to 4x your monthly salary.
Minimum $1,000 to a maximum of $250,000
|At least $60,000|
|OCBC Bank ExtraCash Loan||5.43%||Minimum $1,000 to a maximum of 4x your monthly salary||At least $30,000|
|Citi Quick Cash (New Loan Customers)||4.55%||Minimum $1,000 to a maximum of 4x your monthly salary||At least $42,000|
With an interest rate of 3.48%, the Standard Chartered CashOne Personal Loan is one of the best options in the market. Plus they don’t charge a processing fee. However, they have much stricter eligibility criteria. The minimum annual income requirement is $60,000 which can be hard to fulfill for low-income foreigners.
OCBC’s ExtraCash loan, on the other hand, has the lowest minimum annual income requirement at $30,000. However, the interest rate is very steep at 5.43%. Citi Quick Cash Loan also has a conservative minimum annual income requirement of $42,000 but the interest rate is also quite high at 4.55%. So take these into account before making a decision.
So which is the best foreigner loan in Singapore ?
Among the banks listed above, HSBC is the best personal loan option for foreigners. For one, HSBC has the lowest interest rate available to foreigners living in Singapore. Secondly, the bank also requires a conservative minimum income requirement of at least $40,000.
HSBC also waives its processing fee and offers a loan tenure of up to 7 years. Other banks only offer a loan tenure of up to 5 years. The longer tenure will help borrowers enjoy lower monthly payments since the loan is spread out over a longer period.
Alternative: What If You Can’t Get A Loan From Banks?
If you can’t borrow from a bank for whatever reason, a good alternative is to get a loan from licensed money lenders in Singapore. These money lenders are approved under the Ministry of Law. They are allowed to provide loans to Singapore citizens, Permanent Residents, and foreigners with a valid Employment Pass.
To make sure that you’re dealing with a licensed money lender, you must check their credibility at the Ministry of Law’s website. All licensed money lenders are listed here.
Additionally, here are some red flags to watch out for:
- Use abusive language or behave threateningly
- Asks for your SingPass user ID and/or password
- Retain your personal identification documents, such as driver’s license, passport, ATM card, etc.
- Asks you to sign a blank or incomplete loan contract
- Automatically grants your loan without a loan contract or without explaining the loan terms and conditions
- Grants you a loan without performing due diligence over the phone, text message, or email.
- Withholds any part of your principal loan amount.
Why are licensed moneylenders a good alternative?
If you need urgent cash, then their personal loan services are worth considering. Their application processes are generally quicker than most banks. Plus, they are less stringent compared to traditional banks. Best of all, they don’t require a huge minimum annual income.
In fact, according to the Ministry of Law, low-income foreigners are allowed to take a maximum loan of $500 from licensed moneylenders. Take a look at the table below:
|Borrower’s annual income||Foreigners residing in Singapore|
|Less than $10,000||$500|
At least $10,000 and less than $20,000
|At least $20,000||6 times monthly income|
With a licensed moneylender, you only need a minimum annual income of $10,000 to qualify for a loan. And depending on your income, you may be eligible for up to 6x your monthly income.
But only deal with licensed moneylenders. Some unlicensed lenders advertise on Google or social media and they may appear to be legitimate. However, these loan sharks don’t have the license to offer loans.
That said, be wary and double-check the lender’s credibility. Check all the loan terms and make sure that you understand all of them.
How To Apply For Foreigner Loans In Singapore
The foreigner loan application process is similar to personal loans for Singaporeans and permanent residents. However, the eligibility requirements may vary depending on the lender and type of loan you choose.
Typically, you’ll need to submit documents to prove your identity, address, income, and proof that you’re in Singapore legally. You might also need to apply with a guarantor if you don’t have a credit history.
- Must be at least 21 years old
- Minimum annual income is anywhere between $30,000 and $60,000 depending on the institution
- Proof of identity – valid passport and a work pass with at least 6 months before expiry
- Proof of address – your recent utility bills or bank statement
- Proof of earning – your latest CPF statement with at least 3 months contribution, or latest income assessment, or latest payslip
- Proof of earning (for self-employed or commission-based) – last 12 months CPF contribution statement or latest income assessment
- Proof of earning (if you have less than 3 months work experience) – bank statement and employment letter confirming your start date and salary.
Steps to Apply:
- Visit the bank’s website to apply
- Or visit the nearest branch near you.
- Fill up the loan application form.
- Make sure to bring the requirements for a faster application process.
2. Licensed Money Lenders
As mentioned previously, licensed moneylenders are less stringent when it comes to the application process.
- Be at least 18 years of age
- To have a minimum salary of $2,000
- Work Permit / S Pass / E Pass
- Proof of residence like a utility bill or tenancy agreement
- Proof of employment such as certificate of employment or recent 3 months payslip
- Proof of income such as bank or account statement
- SingPass to log into IRAS website
How Can I Find The Best Loan For My Needs?
1. Do you already have a repayment plan?
Depending on the institution or lender, you can choose between weekly, fortnightly, or monthly repayments. So choose the one that best suits your financial capacity. For instance, if you choose a monthly repayment scheme then ask yourself if you really afford it.
Here are a few things to consider:
- How do you use your monthly income?
- How much will be the monthly installment on your personal loan?
- Do you have enough left for your daily needs?
Additionally, ask your lender if they allow additional payments without penalty. In doing so, you can pay back your loan early which can lead to interest savings.
Now that you have a repayment plan, you need to stick to it. Set a budget and keep track of your spending so you’ll always have enough to pay all of your bills. Lastly, prioritize your loan payments. This means minimizing your other forms of debt, such as credit card debt.
2. How much loan do you need?
Before taking out a loan, you need to know how much you need. Ask the bank or licensed moneylender about the minimum loan amount and if you need less than the minimum, then it’s better to save instead.
Additionally, consider your income and other financial obligations. Determine whether you can abide by the contractual terms. Remember, late repayments can lead to late fees and late interest payment which can lead to more financial strain.
Here are some of the consequences of failing to pay a loan:
- Your debt will snowball.
- You will face employment difficulties. A potential employer may ask to see your credit report. And some companies have strict policies against hiring people who are deep in debt.
- Assets may be seized by the bank. This may depend on the terms and conditions of the loan. However, they may take your assets and use them to repay your debt.
- Legal proceedings
- Have no access to other loans or credit
So just because you qualify for a loan amount 4x your salary doesn’t mean that’s the amount you need to take out. Borrow only what you need and can repay.
3. A lower interest rate doesn’t always mean a cheaper loan
Not all personal loans for foreigners are created equal. That’s why you need to take time and do your research and compare your options. One of the factors you need to consider is the interest rate.
Most borrowers think that a low interest rate is automatically the best option. However, a low interest rate doesn’t mean a cheaper personal loan. Why?
Because you need to take into account other factors such as the additional fees.
For instance, if the bank has a low-interest rate but charges high processing fee, late fee, and early repayment fees then it’ll lead to a more expensive loan. Likewise, a loan with a high-interest rate but low additional fees could mean more savings.
Lastly, you also need to consider your loan tenure. The longer the loan tenure, the higher the interest you’ll end up paying in the long run.
4. Always fully settle the loan before the end of the repayment period
Banks offering personal loans for foreigners may charge an early repayment fee. When you pay off the loan early, the bank or licensed moneylender is going to lose a part of their anticipated profit. They can recover part of it with an early repayment fee.
So before taking out a loan, ask your lender if they charge an early repayment fee. Take this into account when you fully settle the loan before the end of the repayment period. Despite this additional charge, it’s still a good idea to fully settle your debt. In doing so, you can save more on interest payment.
5. Are you dealing with a reputable lender?
Whether you decide to take a loan from banks, moneylenders, or other financial institutions, make sure to check out their reputation. Don’t fall for loans that are “too good to be true”.
Do your due diligence. Here are a few things to consider:
- Is the moneylender listed on the Ministry of Law website?
- How many years have they been in the moneylending industry?
- What do their past clients have to say?
- What are their ratings on Google and other loan comparison websites?
Avoid dodgy moneylenders. If something goes wrong throughout your personal loan, you would want a lender you can negotiate with and someone who can provide assistance.
Frequently Asked Questions About Personal Loan For Foreigners
How much interest moneylenders can charge foreigners?
Effective October 1, 2015, the maximum interest rate that moneylenders can charge is 4% per month. This cap applies regardless of your minimum annual income and whether it’s a secured or unsecured personal loan.
If you fail to repay the loan on time, the maximum late interest rate that a moneylender can charge is 4% per month for each month the personal loan for foreigners is repaid late.
How long does it take to get a foreigner loan?
When taking out a loan, make sure that you meet the eligibility conditions. Once you meet them, most banks can provide instant approval on your personal loan. However, depending on your minimum annual income and if you have a low credit score, the approval process may take longer.
What if you’re applying for a personal loan from a licensed moneylender? It may take a maximum of 30 minutes for your application to be reviewed and approved. They have a less stringent application process which means faster cash disbursement.
How is a foreigner loan different from a personal loan?
Foreigner loans are a type of personal loan offered to foreigners who are working and/or living in Singapore. Applying for a personal loan as a foreigner is not much different compared to a Singaporean or Permanent Resident.
However, a personal loan for foreigners has different eligibility criteria. For one, foreigners need to meet a higher minimum annual income requirement. Additionally, they need to show proof of legal residence in Singapore.
Is a foreigner loan more expensive than a personal loan?
As previously mentioned a loan for foreigners is simply a personal loan offered to foreigners. There are no major differences in the loans available for foreigners in Singapore compared to personal loans offered to Singaporeans.
The interest rates and loan tenures are the same. The only difference is the eligibility requirements and the documents needed to support your application.
How many personal loans can you apply for?
The number of personal loans you apply for doesn’t matter. What matters is the value of those loans. According to the Monetary Authority of Singapore (MAS), the total amount of all unsecured debt that an individual can have is limited to 12 times their monthly income.
So if you owe more than 12 times your monthly salary across all your unsecured debt, you will not be able to apply for any other loan or credit.
On top of that, excessive debt can also hurt your credit rating. Most personal loans offer a maximum loan amount of up to 4 times your monthly income. That said, you must not apply for more than 3 personal loans.
Where to get personal loans for foreigners fast?
Some banks promise fast personal loan approval. However, depending on your eligibility, credit score, and other requirements, it may take a few days to a week.
That said, if you’re in need of urgent cash, you may want to consider turning to a licensed moneylender. Since they have a less stringent application process, they can disburse cash in as fast as 30 minutes.
Getting a personal loan for foreigners in Singapore is possible although it involves extra paperwork and effort. But if you are in need of urgent cash, you have plenty of options to choose from.
- There’s not much difference between a personal loan for foreigners compared to a personal loan for Singaporeans.
- The eligibility conditions for foreigner loans are usually stricter and require a higher minimum annual income.
- HSBC personal loan is the best bank loan option for foreigners.
- Aside from banks, you can also consider getting a loan for foreigners from licensed moneylenders.
Be prepared to compare your options to find the best deal! If you need to compare personal loan packages from credible licensed moneylenders, turn to Loan Advisor. They are a reliable loan comparison website that will help you make smarter financial decisions.