Compare The Best Personal Loans in Singapore: Lowest Interest Rates of 2025

In Singapore, there are two main types of personal loans, each serving different needs:

• Unsecured loans: These don't require collateral and rely on your credit score. They're as flexible as a yoga instructor at East Coast Park.

• Secured loans: These are backed by an asset and often come with lower interest rates, making them as attractive as a plate of char kway teow on a hungry afternoon.

Personal loans in Singapore come with special features that make them stand out:

Feature	Description
Loan Amount	Typically ranges from S$1,000 to S$200,000
Tenure	1 to 7 years, depending on the lender
Interest Rates	Vary between 2.50% to 10% p.a., subject to credit assessment
Processing Fees	Usually 0% to 10% of the loan amount

Understanding these loan details helps you pick the right financial product in Singapore. Whether you're leaning towards unsecured or secured loans, it's crucial to compare your options carefully.

Securing a personal loan in Singapore requires meeting certain criteria. Banks scrutinise several factors to ensure you can repay the loan, much like how a hawker carefully selects ingredients for the perfect laksa. Here are the key eligibility requirements you'll typically encounter:

Income requirements

Your income plays a pivotal role in the loan approval process. In Singapore, you need to earn at least S$30,000 annually if you're a citizen or permanent resident. Foreigners usually need to show a higher income, typically between S$40,000 to S$60,000 per year.

Borrower Type	Min. Annual Income
Singaporeans and PRs	S$30,000
Foreigners	S$40,000 - S$60,000

Credit score considerations

Your credit score from the Credit Bureau Singapore is as important as your EZ-Link card for daily commutes. A better credit score increases your chances of approval and might even secure lower interest rates. Lenders typically look for scores above 1000 – consider it the 'A' grade of the financial world.

Citizenship and residency status

Your residency status affects your loan eligibility as much as it influences your ability to buy property. Singaporeans and permanent residents enjoy easier access to loans. However, foreigners face stricter rules, much like the queue for Singapore Flyer tickets during peak tourist season. While some loans cater to expatriates, they often come with higher rates and more stringent terms.

Understanding these criteria can help you prepare for your loan application. Remember, meeting the minimum requirements doesn't guarantee approval.

Navigating the world of personal loans requires a solid understanding of the different interest rates involved. This knowledge is essential for effective personal loan comparison in Singapore, allowing you to identify the best personal loan rates and ultimately secure the lowest interest rate for a loan tailored to your circumstances.

Applied interest rates

This is the interest rate that banks and financial institutions prominently advertise for their loans. Think of it as the basic annual cost of borrowing.

However, while it represents the yearly cost of the loan, the applied interest rate doesn't tell the whole story. It excludes other fees or charges, such as processing and administrative fees, which can significantly impact the overall cost of a personal loan.

While this may provide you with a good base to select your loan provider, you should carefully consider the other fees associated with your personal loan of choice. You might be surprised to find that these seemingly small fees and charges can add up significantly, potentially increasing the actual cost of your loan beyond the advertised interest rate.

Effective interest rates (EIR)

For a more accurate picture, turn to the EIR. This figure provides a comprehensive view of your personal loan cost by incorporating not only the advertised interest rate but also additional fees, processing charges, and the loan's repayment schedule. This makes it a more reliable measure of your total borrowing expenses.

Fortunately, in Singapore, it's mandatory for lenders to disclose the EIR alongside the advertised rate, promoting transparency.

Term personal loan rates

Term personal loans typically come with lower interest rates compared to their revolving counterparts. These rates, which can be fixed or variable, are established at the beginning of your loan term. With term loans, you borrow a lump sum and repay it in fixed monthly instalments over a predetermined period, usually ranging from 1 to 7 years, depending on your loan term and provider.

Revolving personal loan rates

Revolving personal loans tend to have higher interest rates. This is attributed to the flexibility they offer and the increased risk they pose to lenders. Unlike term loans, revolving personal loans provide access to a pre-approved credit limit, allowing you to borrow and repay in flexible amounts. Interest is calculated only on the outstanding balance, making this a generally more adaptable borrowing option.

0% interest personal loans

While enticing, 0% interest personal loans often have a list of caveats. These offers, typically associated with short-term loans, may involve hefty processing fees. This means you'll still incur costs as your loan provider recoups its expenses upfront instead of through interest payments over time.

If you’re set on taking up a 0% interest loan, it is essential to carefully evaluate the total cost of the loan. This includes processing fees, late payment fees, and early repayment fees to determine if a 0% interest loan truly offers the lowest interest rate for your personal loan.

Choosing a personal loan can feel overwhelming. With various options available, it's important to understand the key factors that will help you secure a loan that aligns with your financial needs and goals. Here's a breakdown of the key things you should do before committing to a personal loan:

Focus on the EIR

When comparing personal loans in Singapore, prioritise the EIR over the applied interest rate. The EIR provides a more complete picture of the total cost, including fees and charges, enabling you to make informed decisions and potentially find the best personal loan rates.

At this stage, it may also be helpful to consult personal loan comparison sites and charts to gain a clearer understanding of the different loan packages available, compare interest rates and fees side-by-side, and identify lenders offering the most competitive terms for your specific needs.

Evaluate the monthly instalments

While smaller monthly instalments might seem attractive, don't opt for an unnecessarily long loan term just to reduce your monthly payments. This strategy can result in paying more in total interest over the loan's duration.

Think of it like choosing between two taxi routes to your destination. One route has a lower flag-down fare but takes a longer, winding path, while the other has a higher flag-down fare but takes a shorter, more direct route. While the first option might seem cheaper initially, the longer journey could end up costing you more in the long run.

To accurately determine the best instalment amount for your needs, you can consider utilising online personal loan comparison tools to explore different repayment scenarios and strike a balance between affordable monthly payments and overall interest costs.

Determine the loan amount you need

It's crucial to take up a personal loan to borrow only what is absolutely necessary. You should avoid taking out a larger loan than you need, as this will lead to higher interest payments and potentially make repayment more difficult. That’s why it’s essential to carefully assess your financial requirements and borrow responsibly.

Choose your loan tenure carefully

The loan tenure significantly influences the total cost of your personal loan. A longer tenure, while resulting in lower monthly instalments, means that the interest can accumulate substantially over time. Conversely, a very short tenure can lead to high monthly repayments that strain your budget.

Ultimately, the choice of tenure depends on your individual needs and ability to repay. That’s why you should choose a tenure that balances affordability with the total interest paid over the life of the loan.

Consider alternatives to personal loans

Before settling on a personal loan, you should also consider exploring alternative options to meet your financial needs. Certain expenses, such as home renovations or starting a business, might qualify for specialised loans with potentially more favourable terms. For example, you can consider options like renovation loans or small/medium enterprise loans, which could be better suited to your specific needs.

When exploring personal loans in Singapore, understanding the costs is crucial as it helps you make a decision as wise as choosing the shortest queue at a popular hawker centre.

Understanding Effective Interest Rates (EIR)

The Effective Interest Rate (EIR) is as important in loan comparisons as the chilli level is in your mee pok. It combines the nominal interest rate with all associated fees, giving you a clear picture of the loan's true cost. Always focus on the EIR, not just the advertised rate, when evaluating loan offers – it's the financial equivalent of looking beyond the glossy menu photos.

Common Fees Associated with Personal Loans

Personal loans come with various fees that can impact the overall cost, much like how add-ons can increase your hawker meal price. These fees include:

• Processing fees: A one-time charge for applying and getting approved, like the service charge at a restaurant

• Late payment charges: Penalties for not paying on time, akin to the extra cost for extending your parking

• Early repayment fees: Charges for paying off your loan early, similar to cancellation fees for booking changes

Remember to factor these costs into your loan repayment plan, just as you'd budget for ERP charges on your daily commute.

Beyond the typical factors like interest rates, fees, and loan duration, several other elements can influence the interest rate offered on your personal loan. Understanding these factors can help you secure the best personal loan rates available:

US Federal Reserve interest rate policies

While you might be taking up a personal loan in Singapore, the monetary policies of the US Federal Reserve can indirectly impact interest rates offered by local banks. The Federal Reserve's decisions on interest rates often influence global financial markets. When the Federal Reserve raises interest rates, it can trigger a ripple effect, leading to increased interest rates on loans, including personal loans, in Singapore.

Credit score

Your credit score is a significant factor in determining the interest rate you'll receive on a personal loan. It serves as an indicator of your creditworthiness. Factors that influence your credit score include your payment history, outstanding debt, credit history length, types of credit used, and recent credit applications.

By maintaining a healthy credit score through responsible financial habits, such as paying bills on time and keeping credit card balances low, you can increase your credit score as well as your chances of securing a personal loan with a lower interest rate. Conversely, a lower credit score may result in higher interest rates.

Income level and employment status

Lenders consider your income level and employment status as key indicators of your ability to repay any type of loan. A stable income and secure employment history demonstrate financial stability and reduce the perceived risk for lenders. This can lead to more favourable interest rates on your personal loan.  Conversely, an unstable income or frequent job changes might result in higher interest rates.

Debt-to-income ratio (DTI)

Your DTI is another crucial factor that lenders assess. It reflects the proportion of your monthly income that goes towards debt repayments. A lower DTI indicates that you have more disposable income available to manage additional debt, making you a lower-risk borrower. This can result in more favourable interest rates on your personal loan. A high DTI, on the other hand, may lead to higher interest rates or even loan rejection.