How Much Personal Loan Can I Take In Singapore?
Living in Singapore is more expensive today than ever. With inflation growing daily, just trying to budget your daily expenses can be stressful.
Managing your finances becomes even more overwhelming with unexpected costs such as medical bills, car repairs, and home renovations.
But what if you could find a solution to ease your worries and take control of your finances? A personal loan may be just what you need.
However, with so many options available, it can be confusing to determine what’s right for you. If you have ever found yourself in a tight financial situation but are unsure of how you can get the support you need, read on.
In this article, we will explain the process of getting a personal loan in Singapore and provide all the information you need to make an informed decision.
From understanding your eligibility, exploring the various uses of a personal loan, and finding the answer to the burning question “how much personal loan can I take”, we’ve got you covered.
Read on to learn how you can secure the financial support you deserve.
How Much Personal Loan Can I Take?
When it comes to personal loans, the amount you can borrow depends on several factors such as your income, credit score, and employment status.
In Singapore, the maximum loan amount is capped at four times your monthly salary, but it may vary depending on the lender.
You can also use a personal loan calculator to determine your eligibility. A calculator will give you an estimate based on your income and other variables.
As a general rule of thumb, the more you earn, the more you can borrow. However, it is important to remember that just because you’re eligible to borrow a certain amount does not mean you should. It’s always best to only borrow what you need and can comfortably repay.
Here’s a table of relevant data and calculations to help you answer the question “how much personal loan can I take” in Singapore:
| Monthly Income | Maximum Loan Amount | Loan Tenure (Years) | Estimated Monthly Repayment | Average Interest Rate |
|---|---|---|---|---|
| $3,000 | $12,000 | 2 | $600 | 4% |
| $4,000 | $16,000 | 2 | $800 | 4% |
| $5,000 | $20,000 | 2 | $1,000 | 4% |
Note: These are estimated calculations. The actual loan amount may vary based on your credit score, employment status, and other factors.
What Can A Personal Loan Be Used For?
When it comes to financial planning, having a backup plan for unexpected expenses is always a smart idea.
In Singapore, the cost of living is on the rise, and having access to a fast source of cash can help you handle these costs easily. This is where a personal loan comes into play.
Here are some common reasons why Singaporeans opt for a personal loan:
- Medical and family emergencies: Emergencies can happen anytime and without warning. A personal loan can help you handle unexpected medical expenses or support your loved ones during tough times.
- Wedding and vacations: Weddings and vacations are big events in our lives and can be quite expensive. If you need extra financial support to make these events extra memorable, a personal loan can help you cover the costs.
- Debt payments for credit cards: Credit card debt can add up quickly and be hard to pay off, but a personal loan can help you pay off your debt more manageable way.
- Education expenses: If you’re thinking of resuming your studies, you may require extra cash for tuition fees or school textbooks. A personal loan specifically for education expenses can support your studies and help you stay on track.
- Consolidate debts: Debt consolidation is a popular option for managing multiple debts and making monthly payments more manageable. A personal loan can help you consolidate your debts into one manageable account so you can make payments at a fixed amount and interest rate.
Do You Qualify For A Personal Loan?
In short, a personal loan can be a valuable financial tool for those needing quick and easy access to funds.
However, before applying for a loan and asking how much personal loan can I take, you need to understand the eligibility criteria.
Various factors come into play when it comes to getting a personal loan in Singapore. These include credit score, residency status, annual income. All these variables determine the loan amount and interest rate.
To qualify for a personal loan in Singapore, you must meet the following criteria:
Credit score: A good credit score close to the 2,000 mark is essential to qualify for a personal loan. This score reflects your creditworthiness and ability to repay the loan.
Residency status: Singapore citizens (SCs) and permanent residents (PRs), as well as foreigners residing in Singapore, are eligible to apply for a personal loan.
Annual income: Your annual income is important in determining your loan eligibility. Singapore citizens, permanent residents, and foreigners must earn at least $20,000 per year to be eligible for a loan that is six times their monthly salary from licensed money lenders.
On the other hand, banks are only comfortable with granting loans to Singaporeans and PRs who earn more than $30,000 per year. Foreigners must earn at least $40,000 to $60,000 per year.
All the above factors then determine the:
Loan amount: The maximum amount you can borrow depends on your financial situation and the lender’s requirements. You may be offered a loan amount that ranges between two to six times of your monthly income.
Interest rate: If you’re a Singaporean or PR earning between $20,000 and $30,000 per year, keep in mind that your loan’s interest rate may be higher than those earning $30,000 and above.
Can You Take Multiple Personal Loans?
Taking out multiple personal loans can be an option for those needing additional funds, but it’s crucial to understand the rules and regulations involved.
The Monetary Authority of Singapore (MAS) set a limit for unsecured borrowing, which includes personal loans, credit cards, and other forms of unsecured debt. This limit is currently up to 12 times your monthly income.
Exceeding this limit for three consecutive months may result in a ban on further unsecured borrowing.
When it comes to personal loans, banks and financial institutions (FIs) may offer loans of up to six times your monthly income.
However, this may vary depending on your overall financial situation, including your credit score, outstanding debt, and other factors. For example, if your monthly income is $5,000, you may be eligible to borrow up to $30,000.
It’s essential to keep in mind that taking out multiple loans can have a significant impact on your financial well-being, not to mention mental health.
The more loans you have, the higher your monthly repayments and overall interest costs. Before taking out additional loans, consider your current financial situation, long-term financial goals, and the impact on your credit score.
What To Consider
When looking for the right personal loan in Singapore, there are a few important factors to consider. To ensure you get the best deal, consider the following:
- Interest rate: If you’re getting a personal loan from a licensed money lender, the interest rate should not exceed 4% per month. When taking a loan from a bank, look for the effective interest rate (EIR), which includes processing and other fees.
- Loan amount: Banks can offer up to 10 times your monthly income, while as mentioned, licensed money lenders can offer up to six times your monthly salary. Choose the lowest loan amount based on your capacity to repay.
- Repayment schedule: Both banks and money lenders can offer flexible repayment plans, especially the latter. Choose one you can manage and read the Note of Contract carefully to avoid late repayment fees and interest, which can affect your credit score.
- Loan tenure: The ideal loan tenure is the shortest possible period that you can repay the loan at a lower interest rate. Consider the state of your finances when choosing a loan tenure that aligns with your ability to repay.
Ready to Apply For Your Personal Loan?
Now that you know how much personal loan can I take, are you ready to commit to one?
Taking out a personal loan can effectively manage your financial needs, but it’s crucial to understand the different factors involved in the process.
High interest rates, confusing repayment schedules, and an uncertain loan tenure can complicate the process. Suppose you are searching for the right loan lender with competitive interest rates, flexible repayment plans, and a clear commitment to customer satisfaction. In that case, Horison Credit is one of your best options.
Whether you’re looking to pay off debt, finance a big purchase, or cover unexpected expenses, Horison Credit has a personal loan that’s right for you.
So don’t hesitate to take the first step towards financial stability. Contact us now to learn more about our personal loan options, or apply for a loan today to get started.
