When faced with a financial challenge, we first want to get out of it. But how? Personal loans! Yes, borrowing out a personal loan from financial institutions or authorised banks in Singapore is the best way. Although getting a loan sanctioned can take longer, it's still one of the safest and best options.

Personal loan amount - How much personal loan can I borrow?

The answer depends on various factors, including your credit score, monthly income, and existing debt. Let's take a closer look at each of these factors and understand how they determine your loan amount.

Credit Score:

Your credit score is one of the most important factors that banks and financial institutions consider when deciding how much to lend you. The higher your credit score, the more you can borrow. On the other hand, if you have a low credit score, secured financial institutions may be hesitant to lend you a significant amount or may require a co-signer to approve your application. So what happens if you have a low credit score and still need to borrow money? Try visiting one of the many pawn shops in Singapore.

Read More: What Every Singaporean Should Know About Pawn Shops

Income or monthly salary:

Banks will also look at your income to determine how much you can afford to borrow. They may also consider your debt-to-income ratio, which is a measure of how much debt you have compared to your income. Generally, banks prefer to see a debt-to-income ratio of less than 36%, meaning that your debt payments (including your new loan payment) should be no more than 36% of your gross monthly income.

Existing Debt:

If you have a lot of outstanding unsecured debt, banks may be hesitant to lend you more money, as it could be difficult for you to make all of your payments. To determine how much you can afford to borrow, banks will look at your existing debt and your debt-to-income ratio. If you have a lot of debt, it's important to pay it down as much as possible before applying for a personal loan.

Personal Loan Tenure in Singapore

Personal loan tenure in Singapore can vary depending on the bank and the amount you borrow. Generally, personal loans can range from a few months to several years. The tenure of the loan will also affect your monthly payments, as longer loans typically have lower monthly payments but higher interest rates.It’s important to know how long a personal loan can be to get a better idea for planning your finances.

How to get personal loans approved?

If you're looking to get a personal loan approved, there are several steps you can take to increase your chances:

1. Improve your credit score: Your credit score is one of the most important factors that banks and other financial institutions consider, so it's important to make sure it's as high as possible.

2. Reduce your debt-to-income ratio: If you have a lot of existing debt, try to pay it down as much as possible before applying for a personal loan.

3. Shop around for offers: Different banks may have different requirements and interest rates, so it's a good idea to compare loan offers from multiple banks before applying.

4. Consider a co-signer: If you have a friend or family member with good credit, then they may be willing to co-sign your loan, which can increase your chances of approval.

How to apply for a personal loan and the list of documents required

If you're considering applying for a personal loan in Singapore, one of the first things you'll need to do is gather the necessary documents for your personal loan application. Having all the loan documents ready will not only speed up the application process but also increase your chances of getting loan approval. Here are the standard documents you'll need when applying for a personal loan in Singapore:

  1. Proof of identity: This includes your NRIC or passport.

  2. Proof of income: You'll need to provide your latest payslip or a copy of your Income Tax Notice of Assessment (NOA) for the previous year.

  3. Employment information: You'll need to provide information about your employment status, such as your job title, company name, and duration of employment.

  4. Bank statements: You'll need to provide your bank statements for the past six months.

  5. Proof of residence: This can be your latest utility bill, a tenancy agreement, or a recent bank statement that shows your current address.

  6. Other supporting documents: Depending on the bank, you may also need to provide other documents such as your CPF contribution history or your credit card statements.

Personal loans - How much can I take and pay?

Example: John wants to take out a personal loan of $10,000 for 24 months to pay off some outstanding debts. He shops around and finds a financial institution offering an annual interest rate of 6%. However, the financial institutions also charges a processing fee of 3% of the loan amount.

To calculate the total cost of the loan, John should consider both the interest rate and the processing fee.

Here's how it breaks down:

Loan amount


Interest rate

6% per annum

Loan duration

24 months (2 years)

Total interest payable = $10,000 x 6% x 2 years = $1,200

Processing fee = $10,000 x 3% = $300

Total cost of the loan = $10,000 + $1,200 + $300 = $11,500

So, John will need to repay $11,500 throughout the loan period, or approximately $479 per month. It's important to note that different banks may have different interest rates and processing fees, so it's always a good idea to shop around and compare offers before taking out a personal loan.

Where can I get personal loans in Singapore?

Banks and financial institutions

There are quite a few banks and financial institutions that provide personal loans in Singapore. Some of these include HSBC, Standard Chartered, Citi and DBS. One thing to remember while applying for personal loans is that banks require a good credit score to qualify. You can apply for personal loans online without visiting a branch if you are already an existing customer. Some banks also generate free credit scores for you, giving you a fair idea of your financial health rank.

Comparison platforms like Lendela

Comparison websites, like Lendala, allow you to compare and select the best personal loans by connecting borrowers to banks and financial institutions. It's a one-stop platform for users to get all they need - personal loans or balance transfers, name it and get the best option with one application - free of charge and with no hidden fees. These comparison platforms also let you filter for a low interest personal loan, making it easier to decide. If you want to learn more about how they work, click here.

How to get back on track with your finances?

If you already have multiple personal loans, you need some tips to regain your financial health. Here's what you can consider:

Debt Consolidation

By taking out a debt consolidation loan, you can simplify managing your debts and repayments. This can lead to lower monthly payments on the new loan, often at a reduced interest rate. With all your debts consolidated, you can stay more organised and effectively manage your monthly expenses. Overall, debt consolidation can provide a valuable tool for achieving financial stability.

A secured personal loan vs unsecured loan


Personal Loans

Pawn Shops

Loan Sharks

Legality and Regulations

Legal and regulated by the Ministry of Law

Legal but regulated by the Pawnbrokers Act

Illegal and unregulated

Interest Rates

Fixed and regulated by the Ministry of Law (up to 4% per month)

Vary based on the item pawned and agreed upon by both parties

Unregulated and can be extremely high (up to 20% per week)

Loan Amounts

Can be as high as 6 times of monthly salary

Based on the value of the item pawned

Can vary widely, but typically small amounts

Repayment Terms

Typically up to 5 years

Short-term, usually less than a month

Short-term, often weekly or daily


Not required for unsecured loans, but may be required for larger loans

Required - the item being pawned serves as collateral

Not required, but loan sharks may resort to illegal tactics to collect payments

Processing Fees

Typically 1-5% of loan amount

Typically 5-15% of pawn value

No official processing fees, but loan sharks may charge additional hidden fees

Credit Score Impact

May have a slight impact on credit score

No impact on credit score

No impact on credit score, but defaulting can lead to legal issues and damage to reputation

Overall Risk

Low to medium, depending on borrower's financial situation

Low to medium, depending on borrower's ability to repay and value of item pawned

High, due to unregulated interest rates and potential for illegal tactics by loan sharks

Looking to apply for a personal loan today? Lendela can help

If you need help with improving your credit score to increase the possibility for personal loan approval, try out Lendela’s service now.

Instead of researching 20+ banks’ websites and comparing their loan rates one by one, Lendela lets you fetch and compare pre-approved personal loan offers from multiple institutions at once with a few clicks of a button. Compare loan terms such as loan amount, EIR, tenure, and fees from different loan providers and enjoy shorter application and approval time. See all your loan offers at a glance with Lendela today.

Key Takeaways

  • Apart from existing debt, your credit score, monthly income, and debt-to-income ratio all affect the amount of personal loan you are eligible to borrow.
  • The duration of a personal loan in Singapore varies depending on the bank and the amount you borrow, typically span over a few months to several years, with the loan tenure affecting your monthly fees and interest rates.
  • You can get a personal loan approved in several ways, such as reducing your debt-to-income ratio and improving your credit score.