Did you know that your Central Provident Fund (CPF) can do more than just help you fund your housing and retirement?
With the rising cost of living in one the world’s most expensive countries, older Singaporeans have a financial lifeline to rely on, the CPF Personal Loan!
This article will cover all you need to know about the CPF Personal Loan and how to apply for one.
Table of contents
- What is a CPF Personal Loan?
- What Can CPF Personal Loans Be Used For?
- What Are the Eligibility Criteria and Requirements?
- What’s the Difference Between a Bank Loan and a CPF Personal Loan?
- What Are the Fees and Charges of CPF Personal Loan?
- How to Apply for a CPF Personal Loan
- Is the CPF Personal Loan Right For You?
What is a CPF Personal Loan?
A CPF personal loan in Singapore allows Singaporeans above 54 years old to utilise the savings in their CPF account to get cash when they need it most.
You can borrow up to six times your monthly income with competitive interest rates, ranging from 1% to 4% per month. You can choose a repayment period of six to 12 months, with the option to extend repayment until the age of 55.
What Can CPF Personal Loans Be Used For?
As the credit you get will be in cash, you can use it for basically anything such as medical bills, home repairs and other financial emergencies.
What Are the Eligibility Criteria and Requirements?
To be eligible for a CPF Personal Loan you need to:
- Be a Singaporean citizen or Permanent Resident who is at least 54 years old
- Have a minimum salary of $2,000 a month
- Be able to withdraw at least $5,000 from your Ordinary Account (OA) or Special Account (SA)
To apply for a CPF Personal Loan, you will need to provide the following:
- Identity card / NRIC
- Proof of residence (utility bill, a letter addressed to you, and or tenancy agreement)
- Proof of employment (employment letter of contract, certificate of employment, pay slips)
- SingPass (to log into CPF, HDB, IRAS website)
🪙SingSaver Cash Quest🪙: Get 3x chances to win S$50,000 when you apply for participating Personal Loan products. Applying for multiple products means more Cash Quest Chances! Plus, download the SingSaver App and log in with the same email used during product application to earn 20 additional chances! Valid till 22 December 2024. T&Cs apply.
SingSaver Exclusive Cashback Offer: Enjoy the following rewards when you sign up for an HSBC Personal Loan:
Get up to S$1,350 cashback, an Apple iPad 10.9-inch 10th Gen Wi-Fi 64GB (worth S$499), a Dyson AirWrap (worth S$430), or an Apple iPhone 16 Pro 128 GB (worth S$1,599) when you apply for an HSBC Personal Loan and get approved for a loan of min. S$8,000 with a minimum loan tenure of 3 years. Available to new and existing customers. Valid till 6 January 2025. T&Cs apply.
What’s the Difference Between a Bank Loan and a CPF Personal Loan?
If you are eligible for a CPF Personal Loan, you might be wondering, why choose a CPF Personal Loan over a bank loan?
The most important difference between a CPF Personal Loan and a Bank loan is that you do not need proof of income or a good credit score to apply for a CPF Personal loan. This is great for those who have varying incomes or are unable to meet the requirements of a bank loan.
|
Features |
CPF Personal Loan |
Bank Loan |
|
Age |
Open to Singaporeans or PRs aged 54 years and above |
Available to anyone above 21 years old |
|
Minimum income |
Minimum salary of $2,000 |
Varies |
|
Eligibility & Checks |
Proof of employment Proof of residence NRIC/SingPass $5,000 available to withdraw in CPF OA or SA |
Proof of Income Good credit score |
|
Collateral |
None required |
Often required |
|
Interest Rates |
1 - 4% |
1 - 4% |
|
Tenure |
6 to 12 months loan tenure or until your 55th birthday |
6 to 12 months loan tenure |
|
Application process |
Quick with minimal documentation required |
Can be extensive and time-consuming |
🪙SingSaver Cash Quest🪙: Get 3x chances to win S$50,000 when you apply for participating Personal Loan products. Applying for multiple products means more Cash Quest Chances! Plus, download the SingSaver App and log in with the same email used during product application to earn 20 additional chances! Valid till 22 December 2024. T&Cs apply.
SingSaver Exclusive Cashback Offer: Receive the following rewards when you apply for an SCB CashOne Personal Loan.
Get up to S$1,350 cashback, an Apple iPad 10.9-inch 10th Gen Wi-Fi 64GB (worth S$499), a Dyson AirWrap (worth S$430), or an Apple iPhone 16 Pro 128 GB (worth $1,599) when you apply for an SCB Personal Loan and get approved for a loan of min. S$15,000 with a minimum loan tenure of 3 years. Available to new and existing customers. Promo is stackable with welcome offer. Valid till 6 January 2025. T&Cs apply.
Plus, enjoy up to 2.5% cashback on approved amount with a min. value of S$15,000 of 3, 4, 5 years tenure. Valid till 31December 2024. T&Cs apply.
What Are the Fees and Charges of CPF Personal Loan?
In Singapore, all licensed money lenders can only charge up to 4% interest per month. Moreover, licensed lenders can only impose a maximum late payment interest rate of 4% per month for each month the loan remains unpaid. It's important to note that this interest can only be applied to the amount that is overdue, not to the outstanding balance that has not yet come due.
Additionally, licensed money lenders are only allowed to charge the following fees:
- A fee of no more than $60 for each month of late repayment;
- A fee not exceeding 10% of the loan's principal amount when the loan is granted; and
- Legal costs are mandated by the court if the money lender successfully claims for loan recovery.
How to Apply for a CPF Personal Loan
Applying for a CPF Personal Loan in Singapore is simple. Ensure you are a CPF member and that your Ordinary Account (OA) has enough savings for the loan you want to apply for, before applying at a licensed moneylender.
🪙SingSaver Cash Quest🪙: Get 3x chances to win S$50,000 when you apply for participating Personal Loan products. Applying for multiple products means more Cash Quest Chances! Plus, download the SingSaver App and log in with the same email used during product application to earn 20 additional chances! Valid till 22 December 2024. T&Cs apply.
SingSaver Exclusive Cashback Offer: Enjoy the following rewards when you sign up for a CIMB Personal Loan:
Get up to S$1,350 cashback, an Apple iPad 10.9-inch 10th Gen Wi-Fi 64GB (worth S$499), a Dyson AirWrap (worth S$430), or an Apple iPhone 16 Pro 128 GB (worth S$1,599) when you apply for a CIMB Personal Loan and get approved for a loan of min. S$8,000 with a minimum loan tenure of 3 years. Available to new and existing customers. Valid till 6 January 2025. T&Cs apply.
Is the CPF Personal Loan Right For You?
The CPF Personal Loan is a solid choice if you want more flexibility when it comes to repayment and without the need for collateral.
Moreover, it is a quicker and more seamless process than applying for a traditional loan, provided that you are a Singaporean or PR who is 54 years old and above and meets the eligibility criteria.
If a CPF loan is not right for you, check out these personal loans from banks:
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