When you're in need of emergency funds, nothing is more stressful than figuring out the best way to secure them. Personal loans are a popular method of getting quick cash in Singapore - however, there are many options available on the market. To narrow these options down, we can look at loans that may benefit or only be accessible to particular individuals - such as the CPF personal loan. This type of loan can grant fast and easy access to the finances you urgently need for medical bills, home repairs, or other emergencies.
Read on to find out more about what a CPF personal loan is, whether you are eligible for it, what the requirements are to apply, and how they compare to personal loans.
What is a CPF personal loan?
In Singapore, a CPF personal loan is a type of loan that you can take out against the savings in your CPF account. Giving you immediate access to these funds, CPF personal loans are good for unexpected expenses, plus they allow you to borrow up to 6 times your monthly income at competitively low interest rates ranging from 1% to 4% per month. They also typically have a repayment period between 6 to 12 months after the loan has been granted, or up until your 55th birthday - you can find out more about the age eligibility and requirements in the below sections.
What are the eligibility criteria?
Although it does sound attractive, CPF personal loans do have a catch. There is a firm set of eligibility criteria that you need to adhere to in order to apply and qualify for this type of loan, outlined as follows:
Age must be at least 54 years old or just about to turn 55 years old
Minimum salary Singapore Citizen or permanent resident is $2,000
Eligible to withdraw at least $5,000 from Special or Ordinary Account Savings
What are the requirements?
To successfully apply for a CPF personal loan, one must firstly be a Singapore citizen or permanent resident. You must also be able to provide the following required documents:
Identity card/NRIC
Proof of residence (e.g. letters addressed to you, utility bills, tenancy agreements)
Proof of employment (e.g. recent pay slips, certificate of employment, employment letter or contract)
SingPass (to log into CPF, HDB, IRAS website)
CPF personal loan vs. personal loan - which is best?
Disclaimer: Lendela does not currently work with any licensed loan providers that offers CPF Personal Loan yet. The information provided in this blog post is for educational purposes only.
There are a few key differences between a CPF personal loan and a personal loan - mainly in regard to eligibility, requirements, and loan tenure. View the table below for an idea of these differences.
Factor | CPF Personal Loan | Personal Loan |
Age Eligibility | At least 54 years of age or about to turn 55 years old | At least 21 years of age |
Monthly Income | Minimum salary Singapore Citizen or PR is $2,000 | Varies depending on specific loan provider, bank, or financial institution |
Loan Tenure | 6 to 12 months or up until the individual’s 55th birthday (if they are at least 54 years of age) | 6 to 12 months |
Loan Amount | Borrow up to 6x monthly income | Borrow up to 6x monthly income |
Interest Rate | 1% to 4% per month | 1% to 4% per month |
Other Requirements | Must be eligible to withdraw at least $5,000 from Special or Ordinary Account Savings | Varies depending on specific loan provider, bank, or financial institution |
Discover the most suitable loan options with Lendela
Disclaimer: Lendela does not currently work with any licensed loan providers that offers CPF Personal Loan yet. The information provided in this blog post is for educational purposes only.
To make the search for your ideal personal loan easier and more customised, Lendela is here to help ensure you get the emergency funds you need. Our loan comparison platform enables you to find the best personal loan in Singapore for your specific needs. After you fill out an application form, our advanced matching algorithm will show you the loan options that meet your requirements and profile. Apply for a personal loan with Lendela and find the best loan options from reputable banks and financial institutions today.
Frequently asked questions
1. How is a CPF personal loan different from a personal loan?
Although both these options enable individuals to borrow quick cash, a CPF personal loan differs from a personal loan in a few ways. The former has more stringent age requirements, where the applicant needs to be at least 54 years old or just about to turn 55 years old. Most importantly, they must be eligible to withdraw at least $5,000 from Special or Ordinary Account Savings.
As for a personal loan, individuals over the age of 21 years old can apply, making personal loans more accessible to a larger range of people.
2. What is a CPF personal loan good for, and how does it work?
A CPF personal loan is a good option for Singapore citizens or permanent residents who are 54 years old or turning 55 years old and need access to immediate funds in order to sort out various emergency expenses such as medical bills, home renovation works, or credit card bills.
3. What is the repayment period for a CPF personal loan?
The repayment period for a CPF personal loan is between 6 to 12 months, or else you can repay it up until whenever your 55th birthday is (if you are an applicant who is at least 54 years of age).
4. What are the interest rates for CPF personal loans?
Interest rates are capped at 4% per month for these types of loans.
5. What is the maximum amount I can borrow with a CPF personal loan?
You can borrow a maximum amount of up to 6 times your monthly salary with this type of loan.
6. Does applying for a CPF personal loan affect my credit score?
No credit score is required for a CPF personal loan application, however your application will still be carefully evaluated in regard to your credit score and history to ensure you can repay the loan amount. If you fail to repay the loan, your credit score and rating can be greatly affected.
7. How long does it take to approve a CPF personal loan?
Approving a CPF personal loan is very quick, with some application approvals made in as fast as 30 minutes or a matter of hours.
Key Takeaways
- A CPF personal loan allows individuals to borrow funds against the savings in their CPF account.
- CPF personal loans offer many benefits, including borrowing a maximum loan amount of up to 6 times one's monthly income, low interest rates capped at 4% per month, and a semi-lenient repayment period of 6-12 months or until one's 55th birthday.
- Different from personal loan, an individual needs to adhere to a strict set of criteria and requirements to be eligible for a CPF personal loan, which encompass age restrictions, being a Singapore citizen or PR, and being able to provide a number of important documents.
- If one does not qualify for a CPF personal loan, Lendela's loan comparison platform can easily and efficiently find the most suitable options available according to individual requirements.
