Every year, thousands of Singaporeans go for personal loans to meet personal financial shortfalls in their lives. Personal loans are the most preferred forms of credit because they are easy to apply and get approved, but how do they work? This post is a comprehensive guide to bank personal loans in Singapore to help you answer two main questions, “What are the main benefits of personal loans?” and “What is the simplest way to apply?”

A Deeper Look into the Best Bank Personal Loan in Singapore

Before taking a closer look at the main benefits of using a bank personal loan Singapore, it is crucial to understand how it works. This is a type of installation credit, which implies that you borrow a fixed amount and pay back together with interest in instalments over the life of the loan. When you make an application, and it is approved, the bank creates a loan account that remains open until the loan is fully repaid.

Another important attribute of a personal loan is that it is an unsecured form of credit. You do not have to produce collateral, such as a house or car, to get the loan approved. Therefore, the bank will not come for your assets in the event that you are unable to repay the loan, but this should not be a motivation not to focus on repayment.

If you fail to follow the agreed terms and conditions of the loan, you will be slapped with a penalty and your credit score will be affected negatively. This is one of the things you do not want to happen because it might compromise your ability to get credit from any financial institution in Singapore. Even those that might be willing to lend you money will attach a high interest rate because of poor credit score.

Special Benefits of Using a Bank Personal Loan Singapore

Now that you know what a personal loan is, the next question might be, "what are the associated benefits and cons. Here is a closer look at some of them:

Main Pros of Using a Bank Personal Loan in Singapore


  • The Loans are Approved Pretty Fast

When people go for bank personal loans in Singapore, most of them are in urgent need of cash. The lovely thing about banks in Singapore is that they are able to check your application and approve it pretty fast. In most cases, you can get the best personal loan Singapore approved in a few days, meaning that you can address that personal financial shortfall or emergency conveniently.

  • You have a Free Hand on How to Use the Money

There is nothing as lovely as having cash that you can use freely. This is what personal loans in Singapore do. Once the cash is deposited into your account, you can use it as preferred, whether it is paying for education or purchasing new assets.

Indeed, you can even change the course completely depending on the prevailing circumstances. For example, if you had taken a personal loan to go for a holiday, but an emergency strikes, it is possible to cancel the vacation and direct the money to address the new challenge. The bottom-line when it comes to personal loans is directing them to where you will get the highest value for money.

When you decide to go for a personal loan in Singapore, there are many banks willing to give you the funds. For example, you can borrow from traditional or virtual banks. This mix makes it easy to work with banks having the best terms and conditions.

Cons of a Bank Personal Loan in Singapore


  • Risk of Using the Money for the Wrong Reasons

Although being able to use the cash as you wish is an advantage when it comes to personal loans, it can also be a major disadvantage. Thoughts of all the cash lying in your account can easily tempt people to use it in ways that do not add a lot of value. For example, one might be tempted to buy new furniture, car, or other items which were not urgent.

  • Penalties for Late Payment

Like other forms of credit, personal loans also come with serious penalties if you fail to repay on time. They can also harm your credit score and make it difficult to get funds from other banks. The best way to avoid this challenge is to ensure you plan for the payment and stick to the agreed terms and conditions.

Why Go for a Bank Personal Loan Singapore?

As we have indicated, personal loans are preferred by most Singaporeans because they give them a free-hand on how to use the funds. However, it is important to appreciate that the funds will have to be repaid and ensure that they are used in the right way. Here are the main reasons why most people take the best bank personal loans in Singapore:

  • Debt Consolidation

One of the main reasons why people in Singapore take personal loans is to consolidate debts. If you have multiple high-interest loans, one good idea might be taking a personal loan and using it to wrap them over into a single monthly payment. Debt consolidation comes with the following outstanding benefits:

  1. Consolidating the loans can help to keep down the overall cost of the loans.
  2. Managing the loans will be pretty easy through one monthly payment.
  3. It becomes easy to concentrate on your work without harassing calls from creditors.


  • House Renovation

Although a renovation loan is considered the first option when carrying repairs for your house, most people argue that it is impossible to split the cash for other purposes. For example, if you want to repair the roofing and buy house assets, a renovation loan might not be the best option. However, a personal loan is more flexible, meaning that you can use part of the cash for renovation and the rest to cater for other costs.

  • Pay for Education

The most preferred types of student loans in Singapore are the CPF Education Scheme and MOE Tuition Fee Loan, but what if you do not qualify? The best alternative is using a personal loan. Because personal loans do not have conditions on how you should use the cash, one of the best ways is directing the funds to pay for your education or that of dependents.

One advantage of using a personal loan to pay for education is that you are required to start repaying it immediately after approval. This implies that by the time other students who got CPF Education Scheme funds are starting to repay their loans, you are likely to be almost clearing the personal loan.

  • Emergencies

If you get an emergency but the funds you have are not enough to address it, going for a personal loan will be a great option. Most Singaporeans prefer personal loans because the approval is done fast, meaning you can have the cash in your account within days. Therefore, whether you wanted to clear medical bills or meet financial shortfalls in your organisation, this will be a great option.

  • An Alternative to Payday Loans

One of the common methods of raising cash urgently is using payday loans and credit card credit. However, these credit facilities attract very high-interest rates and severe penalties if you default. For example, payday loans can have interest rates of up to 391%, which is very expensive.

If you take a personal loan, it comes with a lower interest rate and a longer repayment period. This implies that it will not cause a lot of interruptions on your life because you only pay a small amount every month.

  • Vehicle Financing

When buying a car, using car dealers can sharply increase the cost because banks have to pay them commissions. However, you can keep the cost of car financing low by using a personal loan to purchase the vehicle. Here are the main advantages of using personal loans to buy your car:

  1. It is a great way to buy a car without emptying all your savings.
  2. You drive off with a car and pay slowly over the life of the loan.
  3. You can negotiate the cost of the car with the seller to get a better deal and pay with a personal loan.


  • Buy Home Assets

What asset do you think should be added to your house to make it more functional, stylish, and valuable? Is it a new sofa, bed, or patio? For example, you might want to replace the sofa in the living room or change the kitchen cabinets to give the house a new look.

These assets can be expensive, but you should not give up simply because you are short of funds. Instead, you should go for a personal loan to fund the assets.

  • Vacation Costs

Is it the time to head for a vacation, but you are wondering where to get the funds? Well, why not apply for a bank personal loan in Singapore through Lendela? If you have always wanted to travel to Thailand, the Bahamas, or Yellowstone and strongly feel it is the right time to do so, a personal loan can be the right source of the funds.

Because a personal loan does not limit what you can do with the cash, it means that you can use some of it to pay for air travel, shopping, and accommodation. If you get a good deal and some of the cash still remains after the vacation, consider using it for other high-value tasks, such as buying house furniture or boosting your emergency account.

How to Work with a Personal Loan Lender

When thinking of applying for a personal loan, one of the concerns might be whether the application will be approved. However, it is also advisable to think of how you should relate with the bank.

While banks have a raft of conditions that you have to follow, it is important to appreciate that most of them are willing to help mold clients into better financial managers. Therefore, here are some useful tips on how to relate with the bank:

  • Make the bank your friend. For example, you can just drop by the bank or chat with the support about the loan and how you are getting along. They will love to hear that you are progressing well.
  • If you would want some assistance, be it improving your credit score or building personal financial skills, ask the bank how to go about it. Most banks have programs to help their clients match to financial freedom.
  • Enquire whether it is possible to pull down the interest rates of the personal loan you are paying. This might be possible through loan refinancing. If your credit score has improved since the time when the loan was approved, it might be possible to refinance it and enjoy lower interest rates.

Apply for Best Bank Personal Loan in Singapore though Lendela

When it comes to applying for a personal loan in Singapore, the process can get pretty challenging because you have to go through a long list of banks. Since each bank has unique conditions for the best Bank personal loans Singapore, comparing finer details, such as interest rates and administration fees, can take some time. The good news is that there is a shorter, more efficient and reliable way of applying for personal loans – using Lendela.

Lendela is a lender comparison organisation that is dedicated to making the process of loan application easy. Here is how it works:

  • You visit Lendela website to create an account and make a short application for the personal loan. You can complete the process in just a few minutes.
  • Lendela will get you offers from different banks and assist you to pick the best.
  • Then, Lendela will book an appointment for you to sign the loan.
  • Sign the loan, and get the funds released into your account.


A personal loan comes with awesome benefits that make it very effective for addressing financial shortfalls. By using Lendela, you will find the process of applying for a bank personal loan in Singapore easy, fast, and reliable. Remember to strictly follow the agreed terms and conditions for paying the loan.