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Personal Loans
How personal loans work in Singapore, and what to check before you borrow.
A personal loan is a lump sum you borrow from a bank or a licensed moneylender and repay in fixed monthly instalments over an agreed period, with interest calculated either as a flat rate or an effective rate. Singapore banks and licensed moneylenders both offer personal loans, but they're regulated differently and suit different situations.
Banks are regulated by the Monetary Authority of Singapore (MAS). Licensed moneylenders are regulated separately, by the Ministry of Law's Registry of Moneylenders under the Moneylenders Act. Both are legal, regulated options — the difference is in rates, speed, and who typically qualifies.
Bank personal loans typically quote a flat interest rate of roughly 0.9% to 3.45% per annum, which works out to an effective interest rate (EIR) of around 1.75% to 6.5% per annum once fees and repayment structure are factored in. Approval usually takes a few days to a few weeks, and banks lean heavily on your credit score and income history — eligible borrowers can typically access up to around 10 times their monthly income, subject to the bank's own criteria.
Licensed moneylenders are capped by law at 4% interest per month, and can often approve and disburse within hours, with fewer documents required. They tend to weigh your debt-to-income situation more than your credit score alone, which is why they can work for self-employed borrowers, foreigners working in Singapore, or anyone with a less conventional income profile. Borrowing limits from licensed moneylenders are also set by regulation and vary by income and residency status.
| Feature | Banks | Licensed moneylenders |
|---|---|---|
| Regulator | Monetary Authority of Singapore (MAS) | Ministry of Law, Registry of Moneylenders |
| Typical interest | ~0.9%–3.45% flat p.a. (EIR ~1.75%–6.5%) | Capped at 4% per month |
| Approval speed | A few days to a few weeks | Often within hours |
| Typical borrowing limit | Up to ~10× monthly income | Set by regulation; varies by income and residency |
| Best suited to | Borrowers with a strong credit score and steady income | Self-employed, foreigners, or non-standard income profiles |
Figures above are indicative and subject to each lender's assessment and current regulations.
What's the effective interest rate, not just the flat rate? Is there a processing or early-repayment fee? What happens if you miss a payment? A lower headline rate isn't always the cheaper option once fees are included.
Fundwise doesn't lend directly — we help you understand which type of personal loan fits your situation, and connect you with banks and licensed institutions that do.
If you're weighing up a personal loan, get in touch and we'll walk through your options with you.
Tap on our knowledge to make better decisions for yourself.
