Unsecured Loans In Singapore: What You Should Know | MoneySmart.sg (2023)

Turning to unsecured loans like personal loans in Singapore is one of the common ways we meet our financial needs – whether it's for a wedding, buying a new home, emergency medical expenses, car repairs or a financial calamity. While some people may choose an unsecured loan to help them cover some expenses, others may choose a secured loan.

So what is the difference between an unsecured loan and a secured loan? Which is more suitable for you? To help you understand better, we have made a quick comparison of secured and unsecured personal loans in Singapore to help you make the right decision.

Unsecured Loans In Singapore: What You Should Know | MoneySmart.sg (1)

What is an unsecured loan?

In Singapore, most of the personal loans offered in the market are "unsecured loans", which means that if you get an unsecured loan from a bank, you do not need to provide collateral to the bank. Some banks offerpersonal loan in singaporeApart from OCBC Bank, Standard Chartered Bank, DBS Bank, United Overseas Bank, etc.

On the other hand, a "secured loan," as the name suggests, requires some type of valuable property that can be secured, called collateral, that the lender can seize if you default on the loan.

How do unsecured loans work?

If unsecured loans do not require collateral, on what basis do lenders approve borrowers to qualify for such loans? Below are some key features of unsecured loans in Singapore and the relationship between borrower and lender in an unsecured loan.

Credit requirements

When deciding whether to approve your application for an unsecured loan, the lender or bank will usually assess your creditworthiness as a borrower and your credit history. If you have a good credit rating, you are more likely to be approved for a loan and may qualify for a lower interest rate.

loan amount

Unsecured loans in Singapore generally offer lower loan amounts compared to secured loans because the lender or bank takes on more risk with unsecured loans.

no security is required

As mentioned earlier, unsecured loans in Singapore do not require the borrower to provide collateral as security.

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higher interest rate

Since unsecured loans are not backed by collateral, they are generally riskier for the lender and therefore tend to have higher interest rates than secured loans.

use of funds

Unsecured loans in Singapore can be used for a variety of purposes including debt consolidation, home improvement, travel or other personal expenses.

Unsecured Loans In Singapore: What You Should Know | MoneySmart.sg (2)

Types of unsecured loans

The most appropriateinterest*maximum loan amountmandate
personal loan

People who prefer a personal loan, which has a fixed term and usually covers long-term needs and offers a lower interest rate.

From 3.88% per year

Up to 10 times your monthly incomeUp to 5 years (Note that, unlike a personal loan with a revolving loan, there is usually no penalty for early full repayment.) You can contact ourblog post hereLearn more about the pros and cons of these two types of personal loans.
credit limitBorrowers who are not sure when they will need the money prefer the convenience of easy access to cash for a short period of time (ie a few months) as an alternative to credit cards.From 20.5% per year

Up to 10 times your monthly income (annual income >S$120,000)

open (by arrangement)
Loan repayment planBorrowers who need to buy expensive items but cannot afford to pay the full amount in cash upfront0% per annum (installments are paid on time)depending on the purchase priceup to 24 months
balance sheet referenceBorrowers who want to consolidate debt from other accounts or credit cards into one credit card or line of credit at lower interest rates0% for 6 or 12 months (depending on the bank balance transfer campaign)Up to 90% - 95% of your credit limit3 months to 12 months
debt restructuring plan

*Applies only to credit card accounts, personal loans and personal lines of credit. The borrower must be a Singapore citizen or permanent resident

Starting at 3.98% per annum (interest rate is usually based on the calculation of the DCP issuing bank)Up to 12 times your monthly income (total outstanding debt plus outstanding interest plus 5% gross)up to 10 years
*Above rates do not include EKS, which is calculated on the reduced outstanding balance over the life of the loan, taking into account administrative fees, with a minimum monthly repayment of a percentage of what the lender/bank requires, plus interest, fees and and Fees are charged, and full payment is due in the last month of the term.

Unsecured loans vs. secured loans


Column title 3



Type of loan

Commonly used for credit card accounts, personal loans and personal lines of creditCommonly used for loans such as home loans, car loans, education loans, renovation or business loans


cash flowPhysical assets

credit limit

Usually small amounts ($100,000 or less)Usually for larger loan amounts than unsecured loans

Processing time

It can often be faster than secured loans because less information is required up frontMay require a longer approval process as collateral must be valued and additional property evidence and documentation must be submitted for review

Best personal loans without insurance

Excluding financial

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Excluding financial

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Standard Chartered CashOne

3,48 %

The total is paid
Singapore dollar11.044

Handling fee
Singapore dollar0

per month
Singapore dollar307

[flash sale]
stand upFree gifts worth S$4915 [up to Apple iPhone 14 Pro Max, 128GB (worth S$1815.80)and the mostStandard Chartered Bank S$3100 cash backWhen your loan is approved for May!Terms and conditionsapply.

Valid until May 16, 2023

Unsecured Loans In Singapore: What You Should Know | MoneySmart.sg (4)

apply now
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Excluding financial

faster fulfillment

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Excluding financial

faster fulfillment

UOB Personal loan

3,99 %

The total is paid
Singapore dollar11.197

Handling fee
0 %

per month
Singapore dollar311

[Faster fulfillment of gifts]
stand up350 dollars in cash or ergonomic chair ErgoTune Supreme V3(worth S$599) iUp to 2.2% unlimited cash discountiz United Overseas BankAdditional $100 offNew UOB CashPlus customers3 months at the earliestWhen your loan is approved for May!Terms and conditionsapply.

Valid until May 31, 2023

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apply now
More details
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DBS Private Loan

3,88 %

The total is paid
Singapore dollar11.164

Handling fee
Singapore dollar100

per month
Singapore dollar310
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HSBC personal loan

4 %

The total is paid
Singapore dollar11.200

Handling fee

per month
Singapore dollar311
apply now
More details

Frequently asked questions

Is there a difference between a term personal loan and a revolving personal loan?

That. Term personal loans involve a fixed term (longer loan period) and usually cover long-term needs and come with a lower interest rate. A revolving personal loan, on the other hand, has a shorter loan period and is suitable for borrowers who can pay off their personal loan as quickly as possible, but the interest rate is much higher. The good thing is that, unlike a term personal loan, there are usually no penalties for early full repayment.
Standard Chartered,UOBiHSBCoffers the best interest rates and personal loan promotions in Singapore. To make a better comparison based on loan repayments, effective interest rate (EPR) and minimum annual income requirements, you can use tools such as the MoneySmart comparison tool to help you." title="Where can I get the best personal loans by Bank in Singapore? ">

Where can I get the best personal loan from banks in Singapore?

Yes,Standard Chartered Bank,United Overseas BankiHSBCOffer the best personal loan rates and promotions in Singapore. For a better comparison based on loan repayment terms, effective interest rate (EPR) and minimum annual income requirements, you can use tools such as the MoneySmart comparison tool to help.

Are unsecured loans better than secured ones?

The main difference is that unsecured loans require the borrower to be secured by some form of collateral/asset, while secured loans do not. Also, unsecured loans are usually used for smaller loan amounts, while secured loans are used for larger loan amounts.

Can I use a debt consolidation program for my home loan and car loan?

The Debt Consolidation Program (DCP) is a repayment plan that helps consolidate all outstanding unsecured debts, including debts from different banks, into one loan with one bank. However, the program only applies to credit card accounts, personal loans and personal lines of credit, which means that any secured loans such as home loans, car loans, education loans, renovations or business loans cannot be included in the DCP.

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What is the EKS and do I have to pay the EKS for my personal loan?

The ECR or effective interest rate reflects the actual cost of borrowing in Singapore. When you get a personal loan from a bank, in addition to the base interest rate, there are usually other fees, such as an administrative fee, that the bank may charge. So yes, you will have to pay EKS on your personal loan; The ERC (effective interest rate) is much more complicated because it also takes into account all processing fees as well as your repayment schedule.


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