Foreign workers face higher minimum annual income requirements and interest rates because banks view work permit holders as high-risk borrowers. For example, most financial institutions require foreigners in Singapore to have a 5% higher minimum yearly income than Singaporean nationals.
Banks consider all foreigners in Singapore as work permit holders. Today, many banks offer a specialized personal loan for work permit holders. For your benefit, we’ve made a roundup of the best personal loans for foreign workers with work permits.
Foreigner Loans: a Work Permit Holder’s Financial Reprieve
Foreigner loans are like personal loans that financial institutions offer Singaporeans. The loan amount, interest rates, and terms vastly make both of them different.
For example, typical personal loans require Singaporeans to earn at least S $20,000 yearly. On the other hand, foreign workers must earn S $40,000 yearly to qualify for the same loan amount.
Singaporean work permit holders are high-risk borrowers because they have no credit history. Plus, they can leave the country after their work contracts expire. Therefore, banks have safeguarded their foreign loans with added requirements to mitigate these high risks.
The Best Loans For Work Permit Holders in Singapore
Foreigners looking for the best work permit holder personal loan amounts and interest rate figures can use this table. Our data comes from bank foreign worker loan offers in 2022.
| Interest Rates | Loan Amount | Annual Minimum Income Requirement | |
| HSBC Personal Loan | 3.8 (7% Effective Interest Rate) | S $11110 – S $20,000 | S $40,000 |
| Standard Chartered CashOne | 3.88% (7.63% EIR) | S $11164 – S $20,000 | S $60,000 |
| OCBC ExtraCash Loan | 5.42% (12.11% EIR) | S $11629 – S $20,000 | S $45,000 |
| Citibank Quick Cash | 3.99 (7.5% EIR) | S $11365 – S $20,000 | S $42,000 |
1. HSBC Personal Loan
The bank’s personal loan offer isn’t exactly cash. Rather, successful borrowers can use HSBC’s personal line of credit. Plus, foreigners who fulfill the bank’s annual income can apply for the financial product.
HSBC’s personal line of credit can reach up to S $200,000 for Singaporeans. However, foreigners might have a lower loan amount depending on their monthly income. Plus, foreign workers will most likely contend with higher interest from their loans for foreigners.
Your supporting documents must include the following:
- Employment letter of offer
- Passport
- Working Pass
- 3 Months of Payslips
- 2 Years Notice of Assessment
- Proof of Billing (Tenancy Agreements, Utility Bills, etc.)
2. Standard Chartered CashOne
Both Singaporeans and foreigners can apply for Standard Chartered’s personal loan and receive up to S $250,000. Stanchart’s CashOne provides borrowers a 1-5 years loan repayment period.
Standard Chartered’s unsecured loans work well as loans for foreigners who can meet its minimum annual income requirements. Plus, the high 3.88% interest rate with 7.68% EIR isn’t a welcoming figure. However, the application process is fast because work permit holders can get loans for foreigners within a few days.
You’ll need to provide the following supporting documents for StanChart’s CashOne loans for foreigners:
- Employment letter of offer
- Passport
- Working Pass
- 3 Months of Payslips
- 2 Years Notice of Assessment
- Proof of Billing
3. OCBC ExtraCash Loan
Foreigners above 21 years old and earning a yearly S $45,000 salary can use OCBC ExtraCash Loan. You’ll need to sign up for OCBC’s online banking account to use this financial product. Therefore, ExtraCash loans can be challenging to pay successfully for many foreign workers.
ExtraCash loan provides you up to six times your monthly salary that you can pay within 1-5 years. Plus, its annual interest rate is at 12%. Both OCBC ExtraCash Loan and online banking account requirements will ask you to submit the following documents:
- Employment letter of offer
- Passport
- Working Pass
- 3 Months of Payslips
- 2 Years Notice of Assessment
- Proof of Billing
4. Citibank Quick Cash
Citibank offers foreign workers and Singaporeans a personal loan that provides a virtually limitless maximum. The bank’s evaluators can provide you a nominal personal loan amount depending on your current income. However, foreigners have a higher minimum annual income requirement of S $42,000.
Successful borrowers have to pay regular loan repayments monthly against a 3.99% (7.5% EIR) monthly interest rate. The bank has made it easy for personal loan applicants to apply through the Citibank Mobile App for a Citibank Quick Cash Loan.
All foreign borrowers must provide the following requirements:
- Employment letter of offer
- Passport
- Working Pass
- 3 Months of Payslips
- 2 Years Notice of Assessment
- Proof of Billing
Which Bank Works Best for Foreigner Personal Loans?
Foreigners in Singapore have much more opportunities to use bank services than ever before. However, banks still consider them as high-risk borrowers. Therefore, you’ll still see an enormous disparity in interest and income requirements between local Singaporean and foreign borrower rates.
OCBC and Citibank QuickCash provide the easiest application process available. However, OCBC’s interest rates put it right next to Citibank’s modest 3.99% rates. Plus, OCBC has the second-highest minimum income requirement of S $45,000.
Alternatively, HSBC offers the lowest interest rate of 3.8% and a minimum annual income of S $40,000.
Licensed Moneylenders: a Great Alternative to Bank Loans
Singapore’s licensed moneylenders refer to their loan applicant’s monthly income and employment stability instead of requiring a good credit score. As a result, they can supply both local and foreign borrowers with the same approved loan amount, interest, and terms.
Licensed moneylender loans can provide you up to six times your monthly salary. Plus, you have an interest rate ceiling of 4% with a 10% processing fee ceiling.
The only downside you’ll find with licensed moneylender loans is the cash loan tenure. Borrowers must pay the entire amount within its loan tenure of one year.
A few things to know about licensed moneylenders:
- Licensed money lenders aren’t loan sharks. They’re registered businesses that comply with the Ministry of Law’s regulations.
- You can find hundreds of trusty licensed moneylenders offering personal loans on The Registry of Law’s database.
- Moneylenders aren’t affiliated with banks. Licensed lending company owners are often individuals or financing groups offering bank loan alternatives.
- Hundreds of thousands of Singaporeans have found licensed moneylender personal loans and other services helpful for their needs.
- You can report to MinLaw or The Registry of Moneylenders about troublesome licensed moneylender behaviors.
- All licensed moneylender stipulations and terms undergo an in-depth Ministry of Law review.
- Licensed moneylenders help you recover your poor credit score.
How to Apply for This Loan
It’s easy to apply for a foreigner’s personal loan. Bank personal loans have various specific application steps. However, the following steps describe the general process applicants of personal loans undergo. Check with your bank if they have any equivalent specific process.
- Use the portal your bank or licensed moneylender provided
- Submit all necessary documents and requirements.
- Wait for your loan application result.
Documents You’ll Need:
- Work Permit/S-Pass/Employment Pass
- Passport
- Proof of Residences, such as utilities or a residential tenancy agreement
- Employment Letter from your Singaporean company
- Three months of your most recent Singapore payslips
- Latest bank statement reflecting your contract’s pay
Is a Foreigner Loan More Expensive Than a Personal Loan?
Technically, a foreigner loan is much more expensive than a local personal loan. Banks are taking a higher risk of lending to borrowers with zero credit scores and financial history in Singapore. For banks, foreign workers who can comply with their minimum annual income still have a high risk of defaulting.
Therefore, foreign borrowers can only borrow a foreigner loan in Singapore with a higher minimum annual income and interest rates than local borrowers. However, banks might consider lowering future foreigner loan interest rates for successful repeat work permit borrowers.
Can I Get a Loan Just by Using My Work Permit?
Your work permit is a required document for most bank business loans. It’s not the equivalent of Singpass. Therefore, you can’t use it alone and make your application successful.
Banks grant loan applications by considering documents supporting the job and income you stated because you have no Singapore-established credit scores and history of any loan in Singapore history. Plus, banks might ask you for more supporting documents for instant loan approval too.
Which Bank Is the Easiest to Get a Personal Loan?
On this list, the easiest loan applications come from banks with online application options. For example, Citibank and OCBC have online portals for applications. Any customer that complies with all the eligibility and can provide the banks with their supporting documents can have the easiest time getting financing.
Banks can ask foreigners for more support documents because of the latter’s high-risk profile. Thus, you can speed up your application approval by having any requested documentation on hand.
How Much Interest Can Moneylenders Charge Foreigners?
On average, a licensed moneylender can charge both Singaporeans and foreigners up to a 4% interest rate per month. Report any lender that charges you interest rates beyond this ceiling.
According to Singapore’s moneylender law, licensed moneylenders can only charge up to 4% interest rates and 10% of the loan principal. Both Singaporeans and foreigners can make a claim against offending licensed moneylenders through the Registry of Moneylenders.
How Long Does It Take to Get a Loan?
Typical personal financing is an unsecured loan. Banks will not conduct credit loan investigations and require collateral. Therefore, you can get your loan on the same day your requirements receive approval.
Work permit holder financing requires credit investigation and collateral because foreigners have no credit score and history. In addition, most foreigners have no Singapore properties with enough collateral value. Thus, they can get their loans within the same day they successfully submit their requirements.
Where to Get a Personal Loan for Foreigners Fast?
Each bank we’ve featured on this list can quickly provide you with a loan after successfully submitting your requirements. In addition, licensed moneylenders offer up to six months of your monthly salary as their maximum loan amount.
Alternatively, licensed moneylenders can offer payday loans to foreign workers. Any worker who needs a salary advance to address ballooning costs will find these a great alternative to a payday loan or higher maximum loan amount.
Why Do Foreigner Loans Have Much Higher Loan Requirements?
Foreigners applying for bank loans must have higher annual incomes because financial institutions consider them to be high-risk borrowers. Singapore’s claim court has jurisdiction over Singaporean borrower cases. Plus, foreigners have no Singaporean properties and credit history.
Foreigners flying away from Singapore may choose not to return and finish their monthly payment. Therefore, banks safeguard themselves from unscrupulous foreign borrowers with higher initial fees and requirements.
Is It Much More Challenging to Get Singapore Bank Loans for Foreigners?
Some banks are lenient on foreigners. They provide the same accessibility to foreigners as they would provide Singaporean borrowers. However, the limited loan amounts and higher annual income requirements will still be present.
On the other hand, foreign personal loans pay out faster because they have no collateral and properties. Foreigners who can submit all their requirements to prove their loan application eligibility can have instant approval and have a smooth time working with banks.
What Happens to Foreigners Who Fail to Pay Their Loan?
Work permit holders who refuse to pay their remaining debt will face legal warnings from Singaporean authorities. Banks can file a claim against the foreigner. Furthermore, foreigners who attempt to fly abroad to run away from their debts can face criminal charges upon returning to Singapore.
However, Singapore’s government cannot extradite foreigners with debt-related cases. Instead, they can warn the country’s authorities and financial institutions about the borrower’s conduct.
Foreigners with problematic financial conduct will face further application hurdles and more rejections in their home country.
Can Foreigners Drive Down Their Interest Rates?
Banks can drive down a loan’s interest rate depending on the foreign borrower’s collateral and income. Thus, foreign workers with applicable and valuable collateral can drive down their interest rate. Furthermore, foreign workers with higher than normal annual income figures might have a significantly lower interest rate.
In addition, banks can have special foreigner personal loan interest rate promotions. However, keep in mind that banks might apply these interest rates for one or two years of your loan repayment term.
Foreigners Will Always Have Access to High-quality Financing in Singapore
In Singapore, foreigners can find the best bank loans on this list. However, keep in mind that interest and loan amounts can change yearly.
If you’re looking for the best financing for foreigners, you can always find the best recommendations from Loan Advisor. We’re confident that we can deliver three of the best quotes for your financing needs with our advanced algorithm. Visit our website today to learn more.
