Every year, thousands of Singaporeans take out personal loans to meet personal financial shortfalls in their lives. Personal loans are the most preferred form of credit because they are easy to apply for and get approved, but how do they work? Our comprehensive guide to bank personal loans in Singapore will 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 in Singapore, it is crucial to understand how it works. A personal loan with a bank is a type of installation credit, which implies that you borrow a fixed amount of money and pay it 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.

That said, if you fail to follow the agreed terms and conditions of the personal loan, the bank will charge you with a penalty, and your credit score will be affected negatively. You do not want this to happen because it will likely compromise your ability to get credit from any financial institution in Singapore in the future. Even banks that might be willing to lend you money will attach a high interest rate to your loan because of a poor credit score.

Benefits of Using a Bank Personal Loan Singapore

Now that you know what a bank 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 Quickly

When people go for bank personal loans in Singapore, most of them are in urgent need of cash. The great thing about banks in Singapore is that they are able to check your application and approve it rather quickly. In most cases, you can get the loan approved in a few days, meaning that you can address any personal financial shortfalls or emergencies quickly.

You have a Free Hand on How to Use the Money

There are no restrictions on how you use the funds received from your personal loan in Singapore. Once the cash is deposited into your account, you can use it as you wish, 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 regarding personal loans is directing them to where you will get the highest value for money.

There are Many Banks Willing to Give You Fast Cash Loans

Personal loans are a very common and popular form of loan in Singapore, and many banks—both traditional and virtual—provide the service. If you have a decent credit score, chances are it won't be difficult to find a personal loan offer with a bank with an interest rate and tenure that aligns with your financial situation.

Cons of a Bank Personal Loan in Singapore

Risk of Using the Money for the Wrong Reasons

Being able to use the funds from your personal loans however you wish can be a double-edged sword. Thoughts of all the cash lying in your account can easily tempt people to use it frivolously. For example, one might be tempted to buy new furniture, car, or other non-urgent items, potentially pulling you into debt.

Penalties for Late Payment

Like other forms of credit, personal loans also come with serious penalties if you fail to make the repayments on time. They can also harm your credit score and make it difficult for you to get funds from other banks. The best way to avoid this is to 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 know that the funds will have to be repaid and should be used wisely to alleviate your financial situation, rather than do more damage to it in the long run. Here are the main reasons why people take out bank personal loans in Singapore:

Debt Consolidation

One of the main reasons why people in Singapore take out personal loans is to consolidate debts. If you have multiple high-interest loans, a good idea might be to take out a debt consolidation personal loan and use it to roll your different loans into a single monthly payment. Debt consolidation comes with the following benefits:

  • Help keep down the overall cost of the loans.

  • Having one monthly payment makes for easier management of the loans

  • You can concentrate on your work without being harassed by creditors.

House Renovation

Although a renovation loan is considered the first option when carrying out repairs for your house, many argue that it is impossible to split the cash for other purposes. For example, if you want to repair the roofing of your home 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 a 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 to opt for a personal loan. Since personal loans do not have restrictions on how you should use the cash, you can freely use the funds to pay for your education or that of your 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 will already be well on your way to clearing your personal loan.


If you get an emergency, but your funds are not enough to address it, going for a personal loan is a great option. Most Singaporeans prefer personal loans because the process of approval is fast, meaning you can have the cash in your account within days. Therefore, whether you want to clear medical bills or meet financial shortfalls in your organisation, taking out a personal loan can help you instantly cover the costs you need.

An Alternative to Payday Loans

One common method of getting urgent cash is using payday loans and credit card credit. However, these credit facilities incur very high-interest rates and severe penalties if you default. For example, payday loans can have interest rates of up to nearly 400%.

Personal loans with banks in Singapore come with a lower interest rate and a longer repayment period. It will likely not cause a lot of interruptions in your life because you only need to pay a small sum every month.

Vehicle Financing

When buying a car, going to in-house car dealers for loans can greatly bump up your overall cost because banks have to pay the car dealer’s commissions. You can keep the cost of car financing low by using a personal loan to purchase the vehicle. Some of the main advantages of taking out a personal loan to purchase a car include:

  • It is a great way to buy a car without emptying your savings.

  • You can repay the loan slowly over the life of the tenure.

  • You can get a lower interest rate compared to in-house car financing.

Buy Home Assets

Do you have some essential home assets you want to invest in to make your space more functional, stylish, and valuable? Perhaps a new sofa, bed, or patio? For instance, you might want to replace the sofa in the living room or change the kitchen cabinets to give your house a new look. Whereas renovation loans may not cover such uses of funds, a personal loan can give you the financial freedom to make such a purchase.

Vacation Costs

Want to jet off to a faraway destination and explore the world but don’t know where to get the funds? One solution is to 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 funds for you. You can use the cash to pay for air travel, shopping, accommodation, or anything you want.

How to Work with a Personal Loan Provider

When thinking of applying for a personal loan, one major concern might be whether your application will be approved. But beyond that, you should also consider how you should work with your personal loan provider to get the best possible experience.

While banks have a raft of conditions that you have to follow, most of them are willing to help mold clients into better financial managers. For example, if you want some assistance in improving your credit score or building personal financial skills, ask the bank how to go about it. Many banks have programs to help their clients achieve financial freedom.

Enquire whether it is possible to negotiate a lower interest rate for your personal loan. 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

Applying for a personal loan in Singapore can be a challenging process because you have to go through a long list of banks and what they offer. Each bank loan offer comes with its own set of conditions and requirements, and it is up to you to compare all the finer details, such as interest rates and administration fees. This can end up taking a lot of time and effort. The good news is that there is a shorter, more efficient, and reliable way of applying for personal loans – using Lendela.

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

  • Visit Lendela’s website to create an account and complete the simple application form for a personal loan. This will take just a few minutes.

  • Lendela will get you a list of offers from different banks and assist you in picking the best option for your needs and financial situation.

  • After booking an appointment to sign the loan, the funds will be promptly released into your account.

A personal loan can be a very effective way of addressing financial shortfalls. By using Lendela, the process of applying for a bank personal loan in Singapore is made easy, fast, and reliable.