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Find the best loan offer with Lendela:
1. Apply online with Lendela to find the best financial institution in Singapore
2. Receive multiple tailored offers
3. Compare offers and select online
4. Sign the agreement and get the money
Our goal is to make your loan application process quicker, simpler and more transparent. As Singapore’s only true personal loan comparison service, we support you all the way from application to disbursement. Click below to read more about Lendela and how we empower thousands of loan-seeking Singaporeans every month.
We are partnering with banks and financial institutions in Singapore to ensure that you get the best possible terms when you apply for a loan with us. However, before doing so, there are a few important things to know about financial institutions. Read our handy guide below to get on top of the subject, so that you can be sure how to find the best financial institution in Singapore.
What is a financial institution?
In Singapore, there are 150+ financial institutions operating under the verification and approval of Singapore laws. Just like regular banks, financial institutions in Singapore are entitled to provide credits and loans to the Singaporean population, as well as perform credit checks to ensure their applicants' credit rating and eligibility for a loan. Like banks, financial institutions in Singapore provide both secured loans (e.g. car loans and mortgages) and unsecured loans (personal loans, debt consolidation plans etc.)
As part of the lending space in Singapore, all financial institutions are obliged to operate under strict regulations. The regulations cover subjects like loan terms (tenure, interest rate etc.), marketing guidelines, and much more. As a borrower, you are legally obliged to fulfil a loan contract with a financial institution.
Most financial institutions in Singapore provide online application options on their websites for their customers.
What is the difference between a financial institution and a bank?
The main difference between a bank and a financial institution in Singapore is the loan terms that they normally offer. While banks in most cases focus on providing higher loan amounts with a longer repayment period (tenure), financial institutions in Singapore are normally offering slightly smaller loans with a shorter tenure.
Having said that, the chance of getting a loan from a bank is normally lower than getting it from a financial institution. The reason for this is that the banks are more restrictive in offering unsecured loans and normally require more from the applicant in terms of monthly income, savings and credit rating.
In conclusion, it can be said that banks and financial institutions are catering for slightly different customers. If you are eligible to get a loan from a bank, these loans will most likely save you money through better loan terms (like lower interest rate), but if you don't meet the banks' requirements, there are several good financial institution options for you to get the money that you need.
How to avoid unlicensed loan providers and loan sharks
The lending space is full of different actors and unfortunately, there is a fair share of illegal players operating in Singapore today. These illegal actors can be anything from online loan providers running a nice-looking website with a made-up license number, to straight-up loan sharks operating in the streets. It is needless to say that it is of great importance that you stay away from these type of loan providers. But how will you be able to separate an illegal loan scammer from a financial institution in Singapore? Here are some signs that the loan provider you are engaging with isn't licensed:
If you encounter any of these behaviours or practices, know that you are probably dealing with a loan shark in Singapore and avoid falling into their trap. In addition, you should report the misconduct to the Singapore Police Force, along with the loan shark's name, license (made-up or real) and contact information.
Taking up a loan from a financial institution in Singapore – restrictions, amounts etc.
As any bank, financial institutions in Singapore are allowed to offer any loan amount if the loan is secured. However, there are some rules for unsecured loans (personal loans) when it comes to maximum amount that you can borrow from a financial institution:
Singapore citizens and Permanent Residents (PRs):
Foreigners residing in Singapore:
Interest rates and fees for financial institutions in Singapore
The max. interest rate that financial institutions in Singapore can charge is 4% per month, no matter the applicant's income or if the loan is secured or unsecured. If you fail to repay the loan in time, the max. rate of late interest that can be charge by a financial institution, is also 4% per month, for each month the loan is repaid late. The interest rate is based on the amount that is left to repay from the loan and not the amount that is already repaid. Late interest rate can only be charged on the amount that is repaid late and not the outstanding amount that isn't yet due to be repaid.
There are also restrictions when it comes to loan fees imposed by a financial institution in Singapore:
However, a financial institution has the right to ask the borrower for compensation for legal costs if the financial institution's claim for the recovery of the loan turns out to be successful in court.
IMPORTANT: The total charges on any loan, including interest rate, late interest rate and various fees, can't exceed an amount corresponding to the principal of the loan.
As you can see, the interest rate that a financial institution in Singapore can charge borrowers varies quite a lot. To determine the interest to charge, your credit score comes into play. So, if you qualify for a loan from a specific financial institution, the cost of the loan is likely to be lower if your credit score is excellent. Here are some useful tips to ensure you have the best credit score for lower interest rate loans in Singapore:
How to find Singapore's best financial institution
Luckily, this is the simplest part. You are always encouraged to "shop around" for a financial institution loan, to make sure that you eventually select an offer that is decent and comes with the best possible loan terms. However, the process of comparing all your loan options from financial institutions can be very cumbersome, as it requires multiple application processes. This can also affect your credit score negatively, as multiple credit checks risk to deteriorate your credit rate, which will affect your future chances to get a loan or credit.
This is where Lendela comes in. We help you apply with multiple Singaporean banks and financial institutions at the same time, via just one online application form. After your application has been sent to the banks and financial institutions, we will notify you as soon as you receive an offer, and eventually help you compare all your options and select the loan offer that suits you the best. We stay with you all the way until your loan is disbursed and our service is completely free of charge.