Top 5 Personal Loans With Lowest Rates In Singapore (May 2023) Money News (2023)

If you urgently need money, but alsomoneyIf you want to borrow money from family and friends, the best option may be a personal loan.

With a personal loan, you borrow cash from a bank or financial institution and repay it in fixed installments over an agreed period. But you usually have to meet a minimum income requirement and the bank will check your credit history.

Even so, it is usually cheaper and safer to get a personal loan from a bank than to hire a loan shark. These are the lowest interest personal loans in Singapore right now.

1. Review: Best Personal Loans in Singapore (May 2023)

Below are the current introductory rates offered by the most popular personal loan providers in Singapore. We will use the example of a Singaporean who earns $2,500 a month and wants to borrow $10,000 and pay it back within two years.

Not mentioned in this table is OCBC's ExtraCash Personal Loan, which gives you a whopping 5.43% interest (EKS 11.47%) with monthly repayments of $323 and a processing fee of $100.

2. What do interest, EKS and processing fee mean?

There's a lot of jargon here, so let's tackle some of the potential problems.

Interest rate: Notice that the interest rate is listed as "of X percent" instead of just "X percent"? This is because personal loans are very dynamic as they all depend on (a) your credit history, (b) how much you want to borrow and (c) for how long. Banks will usually adjust your rate when you apply, so you'll usually only see your final rate once your application has been approved.

EKS: EKS stands for effective interest rate. It reflects the cost of borrowing more accurately than the advertised interest rate, taking into account other fees (such as processing fees; see next point) and loan repayment plans.

Fees: This is the main hidden cost of personal loans and deserves a lot of attention. The closing fee is deducted from the principal - meaning that for a $10,000 loan and a closing fee of $100 (or 1%), you only get $9,900 in cash. As a borrower, you may not "feel" it, but it eats up your money and increases the cost of borrowing.

Now let's take a look at five prominent personal loan packages.

3. UOB personal loan

UOB Personal Loans are only open to existing UOB Credit Card or CashPlus customers who are permanent residents of Singapore between the ages of 21 and 65. You must also earn at least $30,000 a year. Not an existing UOB client? You can still apply for this UOB personal loan, but you must also have a UOB credit card or CashPlus.

The interest rate is 3.77% per year. The loan repayment term is 12 months, and the annual interest rate is 6.89%. EKS For other loan terms of 24, 36, 48 or 60 months, the interest rate is fixed and amounts to 3.99% per year. EKS is between 7.40% and 7.49% per year.

UOB used to waive processing fees only for loan periods of 24 months and above, but now it waives processing fees for all loan periods.

If you are an existing UOB customer, you can get instant approval when you apply for a personal loan online.

Thinking of applying for a UOB personal loan? Apply now and get loan approval through May 31, 2023 to receive $350 cash or an ErgoTune Supreme V3 Ergonomic Chair, a $599 value.

4. Standard Chartered CashOne

The Standard Chartered CashOne Personal Loan is open to Singapore citizens, permanent residents and Singapore work pass holders aged 21-65. The minimum annual income requirement is US$20,000 (lower than other banks!) for Singaporeans and PRs and US$60,000 for foreigners.

You can apply for this personal loan online with a SingPass login and receive your loan disbursement within 15 minutes. You do not need to be an existing Standard Chartered customer to get this personal loan.

So it's fast, but is it cheap? For any loan term from one to five years, Standard Chartered charges an initial annual fee of $199 (minus your loan approval). From the second year onward, you pay no more processing fees—unless you miss some installments, in which case you pay $50 for the current year.

Because of the $199 fee, CashOne is worth more if you're taking out a large loan. A $10,000 loan means you pay 1.99% of the principal.

Rates are advertised as starting at 3.48%, which equates to EKS of 6.95% and above. In reality, the interest rate is individualized, so yours may differ from this example.

From now until 16 May 2023, sign up through MoneySmart to receive up to $4,915 worth of free gifts and up to $3,100 Standard Chartered cashback.

5. Citibank Quick Cash (new clients)

3.45% (EKS: 6.5%) Citibank Quick Cash is available only to clients who have just started using Citibank loans. If you already have a Citibank loan, you will receive a higher interest rate.

Just log into the Citi mobile app, enter the amount of cash you need, and you can withdraw money instantly.

The loan is available to Singapore citizens and permanent residents aged 21 to 65 with a minimum annual income of US$30,000 and foreigners with an annual income of at least US$42,000. However, if you are an existing customer, you don't need to worry about these requirements as Citibank has already vetted you before.

With the Citibank Quick Cash Personal Loan, you can choose a term of 12, 24, 36, 48 or 60 months – all with no processing fees. Citibank can give you 3.56 percent on a shorter one-year personal loan or 3.48 percent if you plan to extend the repayment to five years. While interest rates vary depending on the term, you get 6.5% EKS.

That said, don't take our word for it. Prices have been adjusted so what you get may not be exactly like the examples above.

6. Private loan DBS/POSB

DBS personal loans are only open to existing DBS customers. If you already have a DBS Cashline or DBS Credit Card, or your salary is currently deposited into a DBS or POSB deposit account, you can receive instant cash payments.

The loan is available to Singaporeans and permanent residents, as well as foreigners with DBS Cashline or credit card accounts. You must be between 21 and 75 years old with an annual income of at least DKK 20,000 - a DBS private loan can cover slightly older people and lower income groups than other banks.

Personal loan rates from DBS Bank as low as 3.88%. There is a processing fee of one percent, bringing the minimum EKS to 7.56%. Loan periods from six months to five years are available.

As always, these are the lowest possible prices and the actual price depends on what DBS is willing to offer you. The highest possible EKS is 20.01%.

7. HSBC personal loan

HSBC personal loan Open to Singaporeans and Singapore residents aged 21-65 with an annual income of S$30,000 and above.

The best part about HSBC personal loans is the extremely long loan term of up to seven years - currently the longest loan term in Singapore. So, if you need to borrow a large amount of money but can't afford high monthly repayments, HSBC personal loans are definitely something you should consider.

On the other hand, HSBC does not have the lowest rates. Advertised rates start at 4%, with EKS ranging from 7.5% to 15%. But keep in mind that the actual interest rates vary from person to person.

Another factor to consider is that HSBC personal loans can take a while to be approved and disbursed. While small loans can be approved quickly, applications for larger loans (such as $100,000 and up) can take some time - perhaps more than a week - to be processed.

8. Which private loan to choose?

If you are just looking for the cheapest personal loan, UOB Private Loan and Standard Chartered CashOne Personal Loan are the best options for you. Quick Cash Citibank is also a good option if you're new to Citi.

However, keep in mind that the actual rate the bank offers you depends on factors such as your credit history, the amount you want to borrow and for how long. So if your bank doesn't offer you the lowest advertised rate, you might want to compare it with what other banks are willing to offer you.

If you need cash as soon as possible, the fastest options are DBS Personal Loan (for existing DBS customers), UOB Personal Loan (for existing UOB customers) and Standard Chartered CashOne.

On the other hand, if you don't need quick cash but need a long-term term to pay off a large loan, HSBC personal loans currently offer the longest seven-year term in Singapore.

Regardless of which personal loan option you choose, choose the smallest loan amount and the shortest term that you can easily manage. This will keep your interest costs to a minimum.

9. Term loans vs. credit lines - which one to choose?

While researching personal loans, you've probably come across many different types of loans, some of which don't seem to fit what we've described above.

MoneySmart only lists term personal loans, which is when you borrow a fixed amount with a fixed repayment plan that you agree to before you see the cash.

We generally recommend these loans because of their much lower interest rates. You can make slow but steady repayments at a pace that suits your financial situation.

Many banks also offer personal lines of credit - sometimes called lines of credit, revolving loans or even "flexible repayment loans".

This is a pre-approved amount that you can withdraw in whole or in part, but you must pay it back quickly or face sky-high interest rates. Don't fall for this scam unless you are absolutely certain that your refund will be processed immediately.

Today, most banks offer personal loans based on your personal credit limit or credit card limit. Therefore, you must use a credit card or line of credit to get a loan. However, if it comes with a structured repayment plan, it is still considered a term loan.

But before you apply, you should know that your credit card with this bank will not work because you have actually "used up" the cash credit limit.

10. Being in debt is not fun...

But it can be prevented. If you have to take out a loan, put all your energy into paying it on time to avoid late fees. In the meantime, review your income and budget and write down everything you spend so you don't have to take out a loan again.

Ideally, you should create a budget that gives you enough room to set aside some money for the future without starving yourself.

You should also create oneemergency fundPrice for several months. If you encounter unforeseen circumstances, you can withdraw funds from the fund without taking out a loan.

It's also a good idea to know what type of insurance you need. We recommend that you buy at least hospital insurance, and if you have relatives, life insurance. Fully insured ensures you won't be hit with big bills if something unexpected happens.

Also read:Do you have to choose between an HDB loan and a bank loan? Here's a quick reference

this herearticlefirst published onSmart money.