Are you looking forward to filling a financial shortfall in your budget and have been wondering what the best option is? Some of the top options that you might want to consider are personal loans, small loans (micro loans), and secured loans. However, a secured loan stands out from the pack, particularly because of the low-interest rates. So, is it the best loan for you?

To help you make the right decision about using a secured loan, we will dig deeper into secured loans in Singapore, compare them with unsecured loans, identify the assets you can use as collateral, and the process of application.

secured personal loan singapore

How Does a Secured Loan in Singapore Work?

What is a secured loan? A secured loan is defined as:

  • A form of credit that is backed by an asset.

  • An asset acts as collateral to cut down the risk involved in lending cash to a borrower.

  • Is also called a collateral loan.

One good example of a secured loan is a home mortgage, where the house is used as collateral for the money lent to you.

If you do not have collateral to put through, this might not be a good option for you. Consider taking an unsecured loan in Singapore, such as a personal loan.

Comparing Unsecured to Secured Loans in Singapore

What is the primary difference between a secured and unsecured loan? We have outlined this in the table below:

Secured Loan

Unsecured Loan

  • Requires collateral

  • Amount borrowed depends on the value of collateral used to secure the loan

  • Collateral must be a personal asset and have supporting documentation

  • Proof of income is required to demonstrate ability to repay

  • Does not require collateral

  • Income and creditworthiness are used to determine loan qualification

  • Higher interest rate applied for low credit score

Advantages and Disadvantages of Using Secured Loans in Singapore

Taking a secured loan comes with benefits and risks, and it is prudent to understand them before signing the loan agreement. Check out some of them below and make up your mind whether to go for it or a different type of credit:

Secured Loan Advantages

Secured Loan Disadvantages

  • Get low interest rates

    • Assets provide lenders with security

    • Good credit score and monthly income can lower interest rates even more

  • Borrow more cash

    • Amount lent will be based on the value of the asset

    • High-value assets, like prime property, the lender will get you more cash

  • Have better terms

    • Licensed financial institutions in Singapore offer better terms

    • No major disruption in your financial health as payments are a very small amount every month

  • Obtain a loan with a poor credit score

    • Lenders can sell assets used for the secured loan to recover nonpayment

  • Damage to credit score

    • If you fail to honour the loan repayment agreement, your credit score will be damaged

    • This can be a very serious issue because it can compromise your ability to get credit from any lending institution in Singapore in the future.

  • Asset used as collateral can be sold

    • If you fail to repay your loan, your asset can be sold by the lender to recover borrowed cash

Assets that You can Use as Collateral Loan in Singapore

After checking the pros and cons associated with secured loans, have you made up your mind? If you have, here are some of the assets that can be used as collateral loan in Singapore:

  • New vehicle

  • Used vehicle

  • High-value assets

  • Term deposits

  • Equity in your home

collateral loan singapore

What Should You Do if You Cannot Pay Your Secured Personal Loan?

Being unable to repay a secured loan is the last thing that you would want to imagine because of the risk of losing assets attached as collateral loan. However, it happens quite often, and it is important to not only be prepared for the best, but also imagine the worst. So, if it becomes challenging to repay the loan, here are a few things that you should consider:

Renegotiate the Terms and Conditions of the Loan

  • Most licensed financial institutions are willing to help you restructure the loan instead of defaulting.

  • When restricting your loan, new terms and conditions will likely attract additional charges.

  • With a restructured loan borrower, you must be mindful of the total amount payable as well as the new interest rate.

Go for Debt Consolidation

  • Debt consolidation is only allowed for unsecured loans.

  • Borrowers can combine unsecured loans into a single low-interest loan to release some cash.

  • Borrowers can redirect the money previously going to service debts to repay the collateral loan.

  • Repayments are easier because most of the loans that were problematic have already been reduced into a single line of credit.

Go for Debt Counseling

  • Additional cash savings from cost cutting can be directed at paying the secured personal loan.

How to Apply for a Secured Loan in Singapore?

Despite the fact that secured loans come with lower risk for lenders in Singapore, the process of application is still tedious and lengthy. The delays are mainly caused by the requirement for verification of the asset being put forward. For example, if you are tagging your personal car, the lender will want to ascertain its actual value. However, you can shorten the loan application process by a huge margin and increase the chances of getting it approved by working with lender comparison sites.

One example of a lender comparison site is Lendela, which helps to simplify the process of loan applications for borrowers.

Why use Lendela?

As of today, Lendela is solely offering loan comparison and matchmaking for unsecured loans. Here are the steps to get the best secured loan with our help:

  1. Visit Lendela's website to submit an application for a secured loan in Singapore

  2. Get multiple offers from different banks and financial institutions

  3. Compare your options and select the preferred offer

  4. Book an appointment online with the selected bank to sign the loan agreement

  5. Sign the loan agreement, and the money is released to your account

Apply for a secured loan in Singapore online now.


If you want to borrow funds and target the lowest interest rates, this post has demonstrated that a secured loan in Singapore might be an excellent option. Because you are putting forward collateral to cut down the risk involved, most lenders in Singapore will be willing to loan you at a lower interest rate. Make sure to stick to the agreed repayment schedule because defaulting could result in the sale of your asset.

Key Takeaways

  • A secured loan requires collateral, and the amount borrowed depends on the value of the collateral used to secure the loan.
  • Secured loans have many advantages, such as good interest rates, high amounts of cash, and even being able to borrow with a low credit score.
  • Failure to pay your secured loan will result in not being able to borrow again and losing your assets used to secure the loan.
  • If you are having trouble meeting repayments seek help from debt counselling or try debt consolidation.
  • Lendela can help you select the best options for secured loans in Singapore.