Singapore is a promising country where you can get the best quality of life. Among other Asian countries, it is a leading choice for US expats and other foreigners to settle in and build a new life. Its avant-garde economy, rich culture, career opportunities, and strong laws are a few reasons why.
But living in Singapore could be financially challenging, especially for a new expat. The exceptional lifestyle it offers often comes with a high price. Everything here is pretty expensive, from basic needs like food and accommodation to western luxury and recreation.
With this, you’ll need access to loans and credit lines to tide you over when the need arises. While your options as a foreigner could be limited, you can still get access to excellent loan deals. Read on as we guide you on getting the best foreigner loan and where to find them.
Do Foreigners Have Credit Scores in Singapore?
In Singapore, new foreign workers do not have a credit score. They may also not own a real estate property yet, especially in the early years of their careers, and may find it hard to get a loan from banks and other financial institutions.
With this profile, foreigners are considered high-risk borrowers and these lenders will evaluate their loan applications based on stricter eligibility and higher income requirements. Most loan offers may also come with shorter terms, or higher interest rates and monthly payments.
In time, foreigners who have established their careers and have built good credit scores may try to apply for mortgage loans. But if you are still starting your career and have just moved to Singapore, licensed moneylenders are the best option for foreigner or personal loans.
Personal Loan vs. Foreigner Loan
A foreigner loan is simply a personal loan intended for foreigners, so technically, there is no difference between them other than specific conditions. These loans carry the same purposes and principles and are offered by most lenders if not all.
Like Singapore Citizens and Permanent Residents, foreigners may apply for personal loans. However, they need to meet specific eligibility requirements, varying from one lender to another. Crucial factors include proof of stable employment, such as your employment pass (E-pass) and the borrower’s ability to repay the loan.
As seen below, the requirements and features are almost the same for a personal loan and a foreign loan:
|Foreigners||Singapore Citizens/Permanent Residents|
Best Foreigner Loans in Singapore
Foreigner loans come in handy for unexpected expenses as well as monthly payables like bills, rent, and family remittances. You will find quite a handful of foreigner or personal loan options in Singapore.
Being new to Singapore, you can even run into loan sharks if you are not careful. These loan sharks will lure you into attractive personal instalment loans only to find out they are masked with very high interest rates, exorbitant fees, and hidden charges. Be vigilant, do diligence research, and only borrow from a licensed lender.
To help save you time and trouble, we’ve listed some excellent deals to consider.
|Private Bank Options||Annual Interest Rate||Foreigner Minimum Annual Income Requirement||Loanable Amount||Loan Tenure|
|Standard Chartered CashOne Personal Loan||3.48%||S$60,000||Up to four times your monthly income||1 to 5 years|
|HSBC’s Personal Loan||3.20%||S$40,000||Up to eight times your monthly income||1 to 7 years or the maximum validity of E-pass|
|Citibank Quick Cash(new loan customers)||3.50%||S$42,000||Up to four times your monthly income||1 to 5 years|
|OCBC Cash-On-Instalment||3.50%||S$45,000||Up to six times your monthly income||1 to 5 years|
|Alternative Option:||Monthly Interest Rate||Foreigner Minimum Annual Income Requirement||Loanable Amount||Loan Tenure|
|Licensed Moneylenders||1% to 4%||S$2,000||Up to six times your monthly income or a maximum loan amount of up to S$30,000||Up to 1 year|
From the bank loan options, HSBC seems to be a good offer with the lowest interest rate and the highest loan amount offer.
If you are a foreigner and are not sure if you will qualify or want to skip the tedious application process from banks, your best option could be a licensed moneylender. They do not solely look at credit scores to approve a loan, have competitive interest rates, and their approval and disbursement process is also faster than banks.
Read More: Licensed moneylender vs Bank & Legal Vs Illegal Money Lender
How to Find the Best Personal Loans as a Foreigner in Singapore
Depending on your eligibility and circumstances, you can choose to borrow from either a bank, a credit union, or a licensed money lender. Yet, whatever type of lender you may consider, make sure to also carefully look into the following factors:
1. Interest Rates and Other Fees
The interest rate is the amount that will be added on top of the principal amount. Aside from this amount, some lenders might also impose other fees such as processing fees, admin fees, and late payment fees.
Knowing the total cost allows you to set a manageable monthly repayment. Shop around to compare rates before making a decision.
2. Loan Repayment Period
Typically, a loan that has a longer repayment period would seem better as the monthly repayment amount will also be lower. However, note that the longer the term, the higher the interest charges will also be.
Evaluate your financial situation and choose a repayment length that you can commit to. Essentially, if you want to get the lowest interest rates, choose the shortest repayment terms.
3. Loan Amount
Another crucial factor is knowing the amount you need to borrow and where you are going to use the money. A good rule of thumb is to borrow only what you need and what you can repay. It would be best to avoid overborrowing as you may spend the extra amount on unnecessary expenses that could put you into deep debt.
4. Your Income Flow
Your monthly income flow is also crucial in preparing for a foreigner loan. Make sure you have enough income to service your debt. You may want to talk to a financial advisor to help you assess your current financial condition.
By factoring in these considerations, you can easily find the best personal loans for foreigners in Singapore.
Note also that the Monetary Authority of Singapore (MAS) has limited the total amount of unsecured loans and other personal loans you can borrow. This amount is currently capped at twelve times your monthly salary and is strictly imposed to avoid deep debt problems.
Eligibility and Requirements
Foreigner loan eligibility and requirements vary by lender. If you plan to get a foreigner loan soon, you need to familiarize yourself with some common requirements.
- Age: At least 21 years old
- Minimum Annual Income between S$40,000 to S$60,000
- Proof of Income:
- S-Pass/Employment Pass (E-pass) with a validity of 1 year
- Employment letter
- 3-months payslip
- CPF/Bank statements
- Tax assessments
- Proof of Identity (Passport)
- Proof of Address (Utility bills/tenancy agreement)
For Licensed Moneylenders
- Age: At least 18 years old
- Minimum monthly income: S$2,000
- Application Form containing the following:
- Your full name
- Personal Identification Number
- Date of birth
- Contact information
- Residential address
- Email address
- The loan amount you applied for
- Proof of Identity (Passport)
- Proof of Address (Utility bills/tenancy agreement)
- Supporting documents:
- Bank statement
- Valid E-pass
- Appointment letter from employer
What’s the Loan Application Process Like?
Most personal loan applications, whether from banks or licensed money lenders, can already be accomplished online. Bank loans have stringent requirements and documentation and may take longer to be approved. To ease the process, make sure you have your documents ready for use or upload.
Licensed moneylenders, on the other hand, have less stringent requirements and faster approval and disbursement of funds. It could only take one to two working days to be completed. Here are the quick steps to apply for a foreigner loan with a licensed moneylender:
- Go to the licensed moneylender’s official website or visit their office.
- Fill up the application form and submit required documents.
- Wait for the face-to-face visit scheduled by the loan officer.
- If eligible, your loan application can be approved in as fast as 15 minutes.
- Before funds are disbursed, review your contract and make sure that loan details and terms are complete and clear.
- Get your cash!
Relocating to Singapore presents many foreigners with high costs of living and financial difficulties. If you don’t have enough savings, medical bills and financial emergencies could put up a heavy strain on your finances. It may be hard for foreigners with limited resources. Fortunately, there are many licensed moneylenders who can help you get through.
- Banks have stringent requirements when it comes to approving personal loan application from foreigners.
- Foreigners who do not qualify from taking a loan from banks and other credit facilities can always turn to legit moneylenders.
- With licensed moneylenders, you can get a foreigner loan of up to six months your monthly income.
At FiLife, we keep you up with the latest trends and topics to help you get financially informed and organized. Find plenty of information on licensed moneylenders, loan options and products on our blogs. Visit our website and subscribe to our newsletter today.