crawfort 24 hour licensed money lender singapore

Unexpectedly, you might be looking for access to a 24-hour money lender in Singapore or a lender that can provide you with an instant cash loan. A sudden need for cash can arise at any time.  Your savings might not be enough to tide you over problems like car repairs or medical bills.

Besides, the busy lifestyle in Singapore also means that most of the time, you only have the weekends to settle your personal needs. So, you might be looking for the best licensed money lender  online or searching for a licensed money lender near me” or “Singapore money lender near me” that’s open on a Sunday or outside office hours that can cater to your needs.

In this article, we will discuss if about 24-hour money lender in Singapore. Moreover, find how to differentiate a licensed moneylender from an unlicensed lender.

What Is A Licensed Money Lender Singapore?

A licensed money lender in Singapore is an approved lender under the Ministry of Law.

A money lender can provide instant loans to Singapore citizens, and Permanent Residents. Moreover, a lender can provide loans to foreigners with valid Employment Passes.

Legal money lenders in Singapore are an alternative to consider when applying for urgent personal loans as the processes are generally quicker and less stringent compared to applying with traditional banks.

Since you may need an instant cash loan in unexpected situations, you might be wondering if there are any 24 hours money lenders in Singapore that you can go to, which brings us to the next point.

Are There 24-hour Money Lender Singapore?

There are no 24-hour money lenders in Singapore. If you happen to chance upon one, it’s highly likely that it’s an illegal money lender or one that’s pretending to be a legal money lender. 

However, there are online loan application portals that are available 24 hours online money lender Singapore from licensed moneylenders in Singapore. You can apply for the best personal loans there at any time.

When you apply for a personal loan with Crawfort, your loan can be approved within 8 minutes. Therefore, you will not wait for an hour or get your loan approved in two hours, but it only takes minutes to get your loan approved.

This may sound too good to be true, but Crawfort’s new loan platform allows you to do that. You can submit a loan application at any time and place and get it approved as fast as 8 minutes.

The integration of MyInfo with Crawfort’s system speeds up the application process by pre-filling certain information. Accurate information is retrieved from multiple government agencies and applied accordingly. This helps to eliminate any human error and speeds up your request such that it can be approved as quickly as possible.

With your submitted information, real-time data from credit bureaus, and in-house data that are collated over the years, Crawfort’s proprietary algorithmic formula makes it possible for your application to be approved within 8 minutes.

Of course, this is also subject to Crawfort’s operating hours, as you’ll need to head down to the outlet for face-to-face verification before you can get your loan disbursed. 

While your loan can be processed and approved within 8 minutes, if you were to apply on a Sunday morning, the earliest you can receive your loan will be on Monday morning. You may check out Crawfort’s operating hours here.

How Do You Apply For A Personal Loan With Crawfort?

Infographic on the loan application process with Crawfort, a licensed money lender in Singapore

With Crawfort, you can get your loan application processed and approved within 8 minutes.

You can apply for a personal loan with Crawfort in just 3 simple steps

Firstly, head over to crawfort.com/sg/ and fill in your details your citizenship, monthly salary, and how much you’d like to borrow.

Then, log in via SingPass and your application will be pre-filled automatically with the data retrieved from various government agencies.

Next, upload the documents necessary for your loan application. Once that’s done, submit your loan application, and you’ll receive your application results through SMS within the next 8 minutes.

Once your application is approved, all you have to do is schedule an appointment on Crawfort’s loan portal and head down to the office for a face-to-face verification. 

We’ll go through the loan terms and contract with you in person and clarify any questions you may have. You can also opt to collect your approved loan in cash or have it disbursed into your bank account.

How To Differentiate Between Licensed Money Lenders And An Unlicensed Money Lenders in Singapore

Many illegal money lenders masquerade as legal money lenders that guarantee 24-hour loans. Do keep in mind that licensed money lenders are governed by Singapore’s laws. Hence, there are regulations that Singapore licensed moneylender have to abide by. 

Here are some ways to differentiate between a licensed money lender and an unlicensed money lender.

1. Terms And Conditions Of Your Loan Contract

Firstly, a Singapore licensed money lender has to go through the terms and conditions of your loan to you before you sign the contract. A loan contract stating all the terms and conditions is required by law. These include terms like your repayment period, payment methods, interest rates, and any details pertaining to the loan. 

On the other hand, unlicensed money lenders often don’t provide contracts. They may even send PDF documents via SMS or WhatsApp to get you to pay a deposit before the loan is approved. 

Do not fall into that trap, as it’s part of their loan scam. No fees are required to be paid before any loan approval by a licensed money lender. 

2. Licensed Money Lender Interest Rates And Late Repayment Rates

Under the Ministry of Law’s regulations, licensed money lender in Singapore can only charge up to 4% interest rate per month for their loans. If a borrower fails to repay the loan on time, licensed money lenders can only charge a late interest rate of up to 4% per month.

3. Advertising Channels

Licensed money lender in Singapore is only allowed to advertise their services through business or consumer directories, websites belonging to the licensed money lender, and advertisements placed within or on the exterior of their business premise.

Hence, any advertisements that you see via other channels can be from unlicensed money lenders or licensed money lenders that have violated the law. If you get an SMS offering you cheap, fast cash loans in Singapore be wary. These are illegal money lenders trying their luck. Do not entertain the idea of borrowing from them just because they are convenient and are lending you a helping hand at the right time. 

What’s more, dealing with illegal money lenders can be quite a headache. Want to learn how to deal with illegal money lenders in Singapore? Here’s how

4. Loan Amount That You Can Borrow

You might be asking this question: “How much money I can borrow from a private money lender in Singapore?“.  There’s a limit on the amount that you can borrow for unsecured personal loans.  

Annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than S$10,000 S$3,000 S$500
S$10,000 – S$20,000 S$3,000 S$3,000
S$20,000 and above 6 times of monthly income 6 times of monthly income

Source: Ministry of Law

Hence, any money lender that offers an amount more than the limit set by the Ministry of Law is possibly an illegal money lender.

5. Blackmail Or Threats

Licensed money lenders don’t intimidate, blackmail, or threaten to damage or take control of your property. Without a Writ of Seizure And Sale, a licensed money lender cannot seize any of your property. 

They also don’t damage property, such as vandalising public spaces or even your property. 

What are the differences between a licensed and unlicensed money lender? We cover more here.

Find out how to settle your personal loan if you are unable to pay a licensed money lender in Singapore. 

What To Look Out For To Avoid An Online Loan Scam

Woman on computer with a scam popup

Technology makes it easy for scammers to target victims.

It’s easy for illegal money lenders to put up scams online. All they need is a website and a fake address for them to get their business going.

While it can be hard to distinguish a licensed money lender from a loan shark, there are some telltale signs that you can watch out for to avoid being scammed. 

Here are some things you can keep an eye out for.

1. Remote Application And Loan Disbursement

It’s common to have online loan applications from online money lender in Singapore  as more and more licensed money lenders go digital. 

There are private money lenders in Singapore that have a presence online, offering services that can be applied for online. 

But the increase in remote applications also gives unlicensed moneylenders an opportunity to scam others.

A licensed money lender will do a face-to-face verification before disbursing your loan to you. On the other hand, for unlicensed money lenders, your application may be approved via email, SMS, or phone call without any contract. There may not be any face-to-face meetings, and they may even disburse your loan straight to you.

Hence, be sure to check and not fall for these types of scams. Remember also to check whether the licensed money lender you are dealing with is licensed. Ensure that the lender you’re going with has a proper business address and application procedure. 

If going down to a physical outlet to sign a detailed loan contract isn’t required, this is a huge red flag and a sign that you should cut all contact immediately. 

2. Fees And Interest Rates

An unlicensed money lender or loan shark may ask for upfront fees, processing fees, or admin fees before your loan will be processed. They may even say that you’ll have to pay a fee before they’re able to disburse your cash loan to you.

A licensed money lender will never ask you to transfer money to them before they disburse the loan. They will only charge a 10% admin fee after your loan is approved, which is deducted from your principal loan amount. 

Besides that, loan sharks or unlicensed money lenders also charge interest higher than 4% per month. They charge higher to earn a huge amount of money in a short period of time through the high-interest rates.

On the other hand, licensed money lenders are regulated by the Ministry of Law in Singapore. They can only charge at a maximum of 4% per month for both nominal interest and any late repayment interest.

Remember to check on the interest rates you’re being charged with.

You can get the lowest interest rate with a licensed money lender in Singapore. 

3. Physical Addresses

A licensed money lender must have a physical address. You need to go to their office for verification and go through the loan contract and terms. 

Thus, if a money lender is unable to provide you with an address, the money lender is probably a loan shark.

You can also check the Ministry of Law website for the list of licensed money lenders in Singapore for their official addresses.

4. Advertising Means

Have you ever received SMS regarding loans? Well, these are probably from unlicensed money lenders or loan sharks. 

As businesses go digital, they also take the opportunity to keep up with the trends. They may use these tactics such as advertising via SMS, WhatsApp, flyers, and emails to entice people to borrow from them. 

But these are actually violations of advertising rules for licensed money lenders. Hence, the next time you ever receive this advertising, block and report the number immediately.

Licensed money lenders can only advertise via the 3 channels mentioned earlier. They are strictly regulated and can get their licence revoked if they advertise illegally. Hence, it’s best to deal with licensed money lenders since they are mandated under the Moneylenders Act in Singapore.

Read more about the things you need to know about loan sharks in Singapore here. Also, learn about licensed money lender new rules here.

24-hour Licensed Money Lender In Singapore

FAQs On Borrowing From Singapore Licensed Money Lender

Now that you understand more about licensed money lenders in Singapore, these FAQs can help clarify any doubts you have.

How Much Can Money Lenders Charge?

Licensed money lenders in Singapore can only charge a maximum of 4% interest rate per month. This is regardless of your income and whether your loan is secured or unsecured. 

For example, if you take a loan of S$10,000 and have repaid S$4,000. Only the remaining amount of S$6,000 can be used for the calculation of interest.

As for late interest fees, you can only be charged a maximum of 4% per month and can only be charged on the amount repaid late.

For example, if you take a loan of S$10,000 and make a late payment for the first repayment of S$2,000, the late repayment fee can only be charged on the S$2,000 since the remaining amount for repayment is not due yet.

Licensed money lenders can also only impose charges and expenses of:

  • Fees not exceeding S$60 for each month of late repayment.
  • Fees not exceeding 10% of the principal of the loan.
  • Legal costs ordered by the court for a successful claim by the licensed money lender for the recovery of the loan.

The total charges imposed, which include the interest, late interest, upfront administration, and late fee by a licensed money lender also cannot exceed an amount that’s equivalent to the principal of the loan.

For example, if you take a loan of S$10,000, the total interest, late interest, 10% administrative fee, and monthly late fees of S$60 cannot add up to be more than S$10,000.

What Else To Take Note To Ensure That You’re Dealing With A Licensed Moneylender 

Even if a money lender is licensed, look out for these occurrences as they may be in violation of the law:

  • Use of abusive language or threatening in any manner
  • Asking for your SingPass user ID and/or password
  • Retaining your NRIC or any personal ID documents
  • Asking you to sign on a blank or incomplete loan contract
  • Granting you a loan without giving you a copy of the loan contract 
  • Not explaining the terms and conditions 
  • Withhold any part of your principal loan amount for any reason

How To Lodge A Complaint Against A Money Lender?

If you would like to lodge a complaint against a money lender, you can report them to the Registry of Moneylenders with the money lender’s business name, license, and contact number.

You may report it to the Registry at 1800-2255-529 or via their website.

All details will be kept confidential and will not be disclosed to the Singapore money lender without your consent. In addition, to facilitate the investigation of your complaint, you may be required to attend an interview with the Ministry of Law officers to provide them with relevant information and documents relating to your loan transactions or dealings with the money lenders. 

What Can I Do If A Licensed Money Lender Singapore Is Harassing Or Threatening Me?

Any harassment or threatening behaviour is considered unfair practice and will be subject to regulation by the Registry of Moneylenders. You can also make a police report as such behaviours are taken seriously.

What Are The Supporting Documents Needed To Proceed With A Loan Application?

You’ll need to provide the following documents:

  • Proof of identity: NRIC or passport
  • Proof of residence: Bank statements or bills
  • Proof of income: CPF contribution or payslips

Alternatively, you may also use your income tax statements or employment contract for your proof of income.

What Must A Money Lender Inform Me About Before Granting A Loan?

Before approving any loan, a legal money lender must inform you in writing about the terms of the loan and the following information:

  • Nominal interest rate
  • Late interest charges
  • Other permitted fees to be charged
  • Instalment details

All licensed money lenders in Singapore are required to provide you with a cautionary statement in writing before any loan is granted to you.  You should also be informed about where you can lodge a formal complaint if necessary. Moreover, you must be familiar with licensed money lenders new rules to protect your rights as a borrower.

Need to get an instant cash loan? With Crawfort’s 24-hour accessible and fast online application, apply for a loan in just 3 simple steps and get approval in the next 8 minutes!

Apply Now!

Ultimate Guide in Choosing the Best Personal Loan in Singapore (2020)gapore

Taking personal loans in Singapore can be something worth considering. This is essential to help you reach your financial goals.

Before applying for a low interest personal loan in Singapore, let’s explore more about it. Let’s find out whether or not it can cater to your needs and help you achieve your goals.

Infographic on the pros and cons of taking a personal loan in Singapore

One advantage of taking a personal loan is the faster processing time

What Is A Personal Loan?

A personal loan is an unsecured fast cash loan in Singapore. It’s “unsecured” because it’s not bonded to collateral — a house, for example.

This means that the lender doesn’t possess the right to seize your assets when you’re unable to pay back the loan.

Conversely, the common “secured” loan is a mortgage loan, in which the lender is capable of seizing your assets when you fail to pay your debt.

Still unclear about a personal loan? Learn more about how it works here. 

How Does Personal Loan Work In Singapore?

Taking a personal loan means that you will receive a lump sum of money first based on the approved loan amount.

When it comes to repayment, it does not only stop by paying just the lump sum. Interest and other fees are also included. The total amount of money must be repaid within a specified time period by your lender.

Most personal loans such as personal instalment loans have fixed interest rates and repayment periods. This simply means that you need to repay it on an instalment basis that can span from months or over years.

Thus, being fully amortised, allows the borrower to repay the interest rate plus the principal amount. With an amortised loan, it does allow the borrower to prepare for their repayment schedules.

Do You Really Need A Personal Loan?

It’s good to consider taking a personal loan, particularly when you need to get a relatively large sum of cash urgently or looking for a fast cash loan in Singapore. Despite the need to pay it off over a period of time, it’s still a viable alternative to meet your short-term needs.

Before you apply for a low-interest personal loan in Singapore, ensure that you’re able to pay back your debt.
Here are some common reasons in which a personal loan may come in handy.

Medical And Family Emergencies

While it’s always good to save up a good sum of money for a rainy day, accidents and other emergencies are often unpredictable.

You may never know when you need that extra financial support for yourself or your family. Even after you’ve saved up some money, it may not be sufficient.

Hence, in these scenarios, a personal loan can aid in cushioning these emergencies, and give you a longer buffer time to restructure your financial plans.

Wedding And Vacations

A bride and groom hugging each other at their wedding

Consider taking a personal loan to pay for your wedding banquet

Besides emergencies, a personal loan can also be used to pay for the biggest events in your life. Whether it’s to celebrate your special day with your partner or to go for a holiday, you can consider taking up a loan to pay for these expenses, especially given how expensive a wedding can be in Singapore.

Learn more on how you can use a personal loan for your wedding here. 

Planning for a trip soon? Find out how a personal loan can cover your vacation expenses.

Debt Payments For Credit Cards

A personal loan is also a viable option to pay off your credit card debt. It’s not advisable to do this in the long term though, so it’s equally important to ensure that you spend within your means.

Education Expenses: College Tuition And School Textbooks

On top of that, if you’re a student, you may also adopt a personal loan that’s catered to your needs. Whether or not you require extra cash for textbooks or tuition fees, a personal loan can help support your education.

Consolidate Debts

A personal loan, such as a balance transfer and Debt Consolidation Plan, is also useful in consolidating your debt into one manageable account. Through these 2 types of personal loans, you can pay a fixed amount monthly at interest rates that are reasonably priced.

Do take note that the personal loan interest rates and other terms are still subject to your annual income and other supporting factors. Be sure to compare the interest rates and criteria of personal loans offered by various banks and financial institutions in Singapore.

What Should You Take Note Before Taking Up A Personal Loan In Singapore?

Before you apply for one, it’s good to understand what it entails. While a personal loan allows you to get quick cash, it comes with interest rates.

Advantages Of Personal Loans

Here are some of the good things about taking a personal loan.

Fast Processing Time

It’s a viable option for you to borrow money quickly, particularly in the case of an emergency. You can get a loan within a day to a week of your application. In addition, the documents you have to submit is also less as compared to applying for other types of loan.

No Collateral

Unlike a mortgage loan, you won’t risk losing an asset such as your house when you default on your payments. Since a personal loan is an unsecured loan, it’s not tied to an asset.

Fixed Interest Rates

The interest rates charged for the money you borrow are fixed. This is unlike credit cards, in which the interest rates can vary depending on your balance.

Disadvantages Of Personal Loans

However, like all things in life, a personal loan comes with drawbacks.

High-Interest Rates

A personal loan is typically charged with a higher interest rate than a secured loan. In some cases, its interest rate can be higher than some credit cards.

Age And Income Requirements

In general, you must be at least 21 years old and no older than 65 years old to take up a personal loan.

Most banks in Singapore will also require you to have a minimum income of S$30,000 per annum. While some offer personal loans to people who make less than S$30,000 a year, they’re subjected to a higher interest rate.

If you’re a foreigner, you’ll need to have an annual income of at least S$40,000 to S$60,000 when taking a personal loan from a bank in Singapore.

However, at Crawfort, even if you have an annual income of less than S$10,000, you can still borrow up to S$3,000. If you’re a foreigner living in Singapore under the same income bracket, you can borrow up to S$500. Here’s a table to summarise how much you can borrow from a licensed money lender in Singapore, such as Crawfort.

Annual income Maximum loan amount
Singaporeans and Permanent Residents Foreigners living in Singapore
Below S$10,000 S$3,000 S$500
S$10,000 to less than S$20,000 S$3,000
S$20,000 and above 6 times of monthly income

 

What Else Do I Have To Consider Before Applying For A Personal Loan?

Besides weighing the pros and cons, here are a few things that you should keep in mind when taking a personal loan in Singapore.

Be Sure To Plan Ahead

Before you apply for a personal loan, ensure that you’re able to pay back your debt.

Keep in mind that this debt doesn’t only comprise the sum you’ve borrowed initially, but also the interest and any additional charges. Paying your debt on time helps you to maintain a good credit score.

A credit score reflects the health of your financial state and the risks of lending you money as a customer. The better the credit score, the more trustworthy you are as a borrower.

On the other hand, defaulting on your payments can negatively impact your credit score. When this happens, you’ll have a lower chance of getting your loan applications approved in the future.

Got a bad credit score? Find out how you can still get a personal loan despite having a low score. 

Manage Your Finances Wisely

Whether or not you’ve taken up a loan, it’s important to manage your finances. Be sure to budget wisely and only borrow within your means.

During the application, choose a repayment schedule that you can commit to. Regardless of the instalment frequency (e.g. weekly, monthly, etc.) you’ve chosen to pay back your debt, be sure to manage your budget accordingly.

This helps to ensure that you can pay back your loan in a timely manner.

Explore Alternatives

While a personal loan may seem like the best option you’ve got, you may also consider borrowing from your family and friends. Talk to them about your goals and plans, and reassure them that you’re able to pay them back.

Should You Take A Personal Loan from Banks Or Licensed Moneylenders?

You might come to this point where you have decided that you need a personal loan. You’re now on the hunt for where you should get a personal loan. Is it best to go for banks or take out from licensed moneylenders?

The Advantages Of Taking the Best Personal Loan From Licensed Moneylenders

Fast & Easy Online Loan Application

As they take advantage of the technology, licensed moneylenders are now using online application forms. You will just fill in the form with your initial details e.g. your I.D. type, monthly salary, and loan request. Simple steps are needed to follow. Take for example Crawfort, there are just 3 simple steps to follow: first is to apply via MyInfo, then, check your results, and finally collect your loan.

Saves Time

With the existence of an online application, you don’t need to go down to the office of a licensed moneylender. This means that you can save time and can apply even in the comfort of your home. A time saver when especially when you need an urgent loan in Singapore.

Notable For Fast Approval Loan

Most licensed moneylenders are notable for their fast approval loans in Singapore. Only minutes of waiting to see your loan approval status. Crawfort is also notable for 8-minute loan approval. Therefore, no more long days to wait to collect your loan.

Easier Eligibility Requirements

Unlike banks that need you to have at least S$30,000 annual salary, a licensed moneylender can allow you to borrow even if your annual salary is less than S$10,000.

Ideal For Urgent Needs

Emergencies do come unexpectedly. Accidents and disasters may come at any time. In reality, handling this situation may need you to take some loans. Getting a personal loan from a licensed moneylender is a life-saver. Your fast cash loan can be collected within the day; Thus, it can answer your immediate need for money.

Lower Rejection Rate

Your personal loan has still the chance to be approved even if you have a bad credit score. You don’t have to worry about applying for a personal loan if you have a bad credit score. Licensed moneylenders will look at the moment your capacity to repay

Short-term Loan

Licensed moneylenders also specialises in offering short-term loan. This means that you can pay much lesser interest compared to committing to a long-term loan where you need to pay more interest.

The Disadvantages

Lower Maximum Loan Amount

The maximum loan amount you can take from a licensed moneylender is up to 6x your monthly salary unlike with Banks you can borrow up to 10x times your monthly salary.

Higher Interest Rates

Since licensed moneylenders are less strict when it comes to loan eligibility, this comes with a higher interest.  The interest rate is much higher compared to banks.

But, remember to take a loan from a licensed lender to avoid getting the worst interest rate e.g. those offers coming from a loan shark or “Ah long”. Licensed money lenders are regulated by the Registry of Moneylenders – Ministry of law, thus they can only charge an interest rate of up to 4% per month.

To get the advantages of getting a personal loan from a licensed moneylender, it is essential that you are knowledgeable on how to differentiate a legal lender from a loan shark.  Learn more about the differences between licensed vs unlicensed moneylender.

The Advantage of Taking Personal Loans from Banks

Higher Maximum Loan Amount

If you wanted to borrow up to 10x your monthly salary, taking a loan from a bank is the best option. An ideal answer especially if you need a larger sum of money.

Taking Advantage of Online Application

Most of the banks right now are taking advantage of using their website for loan applications. Borrowers can avoid queues and can experience convenience while applying even in the comfort of their homes.

The Disadvantages

Stricter Loan Requirements

Since they provide higher loan amounts compared to licensed moneylenders, banks are more stringent when it comes to checking the credit profile of every borrower. You need to have at least a S$30,000 annual income to apply.

Longer Approval Time

Credit Evaluation can take time. They will need to look at your credit score and other eligibility requirements. Thus, approval of your loan may take days. So, if you are asking right now where best to get a personal answer, you need to consider your annual salary and the amount you need. If your annual salary is lower than S$30,000, don’t be sad, licensed moneylenders are open to serve you.

Learn more about the differences between borrowing from a bank and a licensed moneylender here. 

How to Choose the Right Personal Loan?

When you are now decided to take a personal loan in Singapore either from a licensed money lender or bank, you might be asking right now if what is the right personal loan offer for you. Below are considerations in coming up with the right decision.

Which is the best interest rate?

When taking a personal loan from a licensed moneylender, you have to consider that the interest rate must not be above 4% per month. Since there is a wide range of lenders, you can shop around and find the lowest-interest possible. Taking a loan from a bank, you have to look over its effective interest rate (EIR) rather than the advertised interest rate. EIR is considered the “real interest rate” it includes processing and other fees.

What is the ideal loan amount?

Both banks and licensed moneylenders can give a higher loan offer. Banks can provide up to 10x your monthly income while licensed moneylenders can give you up to 6x your monthly salary. It is still recommended that you get the lowest loan offer or will be based on your capacity to repay. So, it is right if you start to get to know your financial condition.

What to look for about the repayment schedule?

Although both lending institutions can offer flexibility in terms of your repayment plan, it is advisable to get one that is manageable. Remember to read and understand well the Note of Contract since late repayment entails late interest and repayment fees.  This can also affect your loan and your credit score.

What is the right loan tenure?

You have to remember the ideal loan tenure is the shortest possible since with this you can pay a much lower interest rate compared to the longest tenure. Take into consideration also your financial condition, it is best that it will align with your capacity to repay.

Thinking of taking a personal loan soon? Learn more on what to consider here. 

Need More Help?

Here are the commonly asked questions that can help you with your personal loan application journey.

Can I take a personal loan if I have a bad credit score?

Yes, this is possible, most of the licensed moneylenders have specialised offers for those who have a bad credit score. Your loan application has still the chance to be approved even if you have a bad credit score. If you got approved, it is ideal that you start first with the lowest loan offer and repay it on time to improve your credit score.

Are personal loans good for my credit score?

When you are a good debtor, repaying a personal loan on time can help you improve your credit score. Remember, you need to be a responsible borrower to take advantage of the personal loan.

What Documents Do I Need For The Application?

Here are the documents that you’ll need to provide when applying for a personal loan in Singapore:

  • Proof of identity: Singapore Identification Card (IC) or Employment Pass (EP) and passport
  • Proof of address: Documents showing your residential address (e.g. utility bills with your residential address)
  • Proof of income: Your contribution history statement to your Central Provident Fund (CPF) for the last 12 months, latest income tax Notice of Assessment, latest computerised payslip, or salary crediting into the lender’s bank account (if you’re applying at a bank)

How long does it take to get my personal loan approved?

With a licensed moneylender, it can only take minutes to get your personal loan approved. Thus, they are known for disbursing fast cash loan offers. At Crawfort, loan approval can only take 8 minutes.

So, Are You Now Ready to Take Up the Best Personal Loan in Singapore?

Before you apply for the best personal loan in Singapore, be clear about your motives for applying. It’s also important for you to consider the pros and cons of taking a personal loan, as well as any other advantages and disadvantages based on your own circumstances.

As you go ahead with your plans, be mindful of your spending and borrowing, and only do so within your means.

When in doubt, speak to your peers — whether they’re a legal financial advisor or your family and friends. They might be able to advise you and give you a helping hand when you need it.

Apply now for a personal loan with Crawfort!

Are you short of funds and planning to borrow from the best licensed moneylender in Singapore? But before that, you must first understand the things to consider before borrowing from the best licensed moneylenders in Singapore or credit companies.

Paying off bills and expenses without any assistance can be really challenging, especially when you’re living in one of the most expensive cities in the world — Singapore. Things like medical bills and wedding costs, for instance, can easily cost thousands of dollars in Singapore. 

When there’s not enough money to pay off these expenses, most people may choose to take out loans from the bank. But banks tend to have a longer and more stringent approval process, which might not be helpful if you need cash urgently. 

This is why when it comes to loans, licensed moneylenders are a viable alternative to banks since they generally have faster approval. But borrowing from them or with 24-hour licensed money lenders in Singapore may not be something that sits well with everyone. 

“Is borrowing from a licensed moneylender really safe?” is one of the concerns that people have when it comes to borrowing from them. 

Well, contrary to popular belief, all licensed moneylenders are governed by the Ministry of Law (MinLaw). They’re very much different from illegal moneylenders, so it’s really safe to borrow from them. 

Before you start borrowing from the Singapore’s best moneylender, here are some things to consider. 

What Do You Need To Do Before Borrowing From A Licensed Moneylender In Singapore?

Things to do before borrowing money from a Moneylender

Be sure to check if the moneylender you’re dealing with is a licensed one

Decide On The Type Of Loan That You Need from a Licensed Moneylender

Before applying for a personal loan, from the best moneylender in Singapore, be sure to evaluate your finances to decide on the type of loan to take out. Ask yourself this question: Are you dealing with a small emergency or a major one? 

In the case of minor crises that require only a small sum of money, personal loans are an ideal choice. In addition, they are suitable for paying off home renovation, credit card debts, or consolidating your debts

Research On The Loan You’re Planning To Take From A Licensed Moneylender

Once you’ve decided on the type of loan to take, do some research on its repayment terms. 

Get Your Credit Report

You may also consider buying a credit report from either the Credit Bureau Singapore (CBS) or the Moneylenders Credit Bureau (MLCB) to get an idea of your credit rating. 

Though many licensed moneylenders in Singapore do not check a borrower’s credit report, especially in the case of personal loans, some moneylenders do not approve loans to borrowers with a bad credit rating. 

If you have a bad credit rating, it’s better to clean it up a bit before making a loan application.

Got a bad credit score? Find out how you can still get a personal loan here.

Read: How to Improve Credit Score in Singapore

Check Your Eligibility

Be sure to also check if you’re eligible for the type of loan you’re taking. Keep in mind that in Singapore, the maximum loan amount you’re eligible for depends on your annual income. 

Here’s a table illustrating the maximum loan amount you can borrow from licensed moneylenders in Singapore based on your income and citizenship. 

Annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than S$10,000 S$3,000 S$500
At least S$10,000 and less than S$20,000 S$3,000 S$3,000
At least S$20,000 6 times of monthly income 6 times of monthly income

Prepare All The Documents That You’ll Need Before Going To A Licensed Moneylender Office

How to Speed Up Your Personal Loan Application

Once you’re clear on the finer details, start collecting all the documents you’ll need to apply for the loan. These include:

  • Proof of income and employment
  • NRIC
  • Current credit score and past CPF statements
  • Residency proof
  • Tenancy agreement, employment letter, employment pass, and bank statements (for foreigners)

When it comes to approving unsecured loans such as personal loans, licensed moneylenders usually approve them based on annual income and not your credit history. This is why they usually ask for payslips to evaluate your financial ability to pay back the loan. 

Is There A Cap On The Costs Involved When Borrowing From A Licensed Moneylender?

A woman with a calculator and laptop searching for the best personal loan in Singapore

All licensed moneylenders in Singapore are required to adhere to the rules set by MinLaw. There’s a limit on interest, late fees, and other costs that they can charge borrowers. 

As of 1st October 2015, licensed moneylenders can only impose the following: 

  • The interest rate of not more than 4% per month
  • The late interest of not more than 4% per month
  • A late fee of not more than S$60 per month
  • An administrative fee that must not exceed 10% of the principal loan granted
  • Legal costs ordered by the court for the licensed moneylender to recover the loan amount

In general, the total cost charged by a legal lender, including interest, late interest, administrative fees, late fees, and other related charges, must not exceed the principal loan amount. 

How To Check If I’m Dealing With A Licensed Moneylender Or A Loan Scam?

Man reading text message on phone from a loan shark in Singapore

One important thing to learn before borrowing from a moneylender is differentiating between licensed moneylenders from the unauthorised ones

And, here’s how to check a licensed moneylender. 

Check If The Licensed Moneylender Is On Minlaw’s Registry

The easiest way to check if a moneylender is licensed or not is to refer to the list of licensed moneylenders in Singapore.  Each month the Registry of Moneylenders provides an updated licensed moneylender. So, you can avoid blacklisted moneylenders in Singapore when taking a personal loan.

Besides checking if their license is still valid, you should take some time to read through the licensed moneylender reviews.  

Take Note Of The Licensed Moneylender’s Advertisements

If a moneylender is offering you loans through phone calls or text messages, you’re probably dealing with an unlicensed moneylender in Singapore (often called “Ah Long” in Singapore) or a licensed moneylender violating the rules.  

According to MinLaw’s website, licensed moneylenders can only advertise through the following channels: 

  • Business or consumer directories 
  • Websites belonging to the licensed moneylender
  • Advertisements placed within licensed moneylender’s the interior and exterior side (such as the wall, door, shutter, gate, and window) of their place of business

In terms of the licensed money lender advertisements, you are advised to seek clarification from them and not to solely rely upon the advertisements.  You need to understand fully the terms of the loan contract before borrowing from a licensed moneylender in Singapore.

Check The Licensed Moneylender In Singapore Interest Rates And Fees Offered

As mentioned above, a licensed moneylender follows the standard interest rates and fees imposed by the Registry of Moneylenders.

It is a red flag if you have found the following:

  • Monthly Interest rates are higher than 4%
  • Late interest rate above 4% for each late repayment
  • The late fee is more than S$60
  • Administrative is above 10% of the personal loan granted
  • Not explaining the interest rates and fees

Above are the major signs that you are dealing with a loan shark. If this is the case, you need to cut off your communication with them. A licensed moneylender in Singapore provides the lowest interest rate than the illegal ones. 

Check If The Licensed Moneylender Has A Physical Address

As mentioned the Registry of Moneylender provides a monthly updated list. You will notice that it is a licensed moneylender if it has a physical business address. This is where you will go for the verification process.

Thus, if you are approved for a personal loan without going to a physical address of a moneylender, you are maybe dealing with a loan shark.

Also, if you are provided with a loan and will meet up in an unknown place – this is also a red flag. Make sure that you have checked the official list of licensed moneylenders.

Requires A Face-To-Face Verification With A Licensed Moneylender

Nowadays, it’s common that moneylenders provide an online application due to advances in technology. But, it is still a major requirement to go down to the office of a licensed moneylender for a face-to-face verification.

A face-to-face verification is required before a licensed moneylender proceeds to loan disbursement. If you are receiving just an email or a text message from a lender saying that your loan was approved, it’s time to go away from them.

You need to be careful from dealing with unsolicited calls saying that they can grant you a personal loan. Licensed moneylenders in Singapore are not allowed to send unsolicited emails, text messages, and calls.

Also, if you met a moneylender not providing you clear details about the loan contract or there’s no loan contract at all, it’s time to go away from them.

Always remember that it is a red flag when you are not required for a face-to-face verification within a physical office of a licensed moneylender. It is a major sign that you need to get away from them.

Ensure That You’re Issued With The Relevant Documents

Licensed moneylenders will always return your NRIC and other personal identification documents after evaluating them. They’ll also issue you with a loan contract. 

And before you sign the loan contract, they’ll also make it a point to explain to you each term mentioned in it. The loan contract should also include all the relevant details, including interest rate, repayment terms, and the repayment period. 

What Do You Need To Note When Dealing With A Licensed Moneylender?

When borrowing from a legal lender, be mindful of the following:

  • Using abusive language or behaving in a threatening manner
  • Asking you with your Singpasss ID/password
  • Retaining your NRIC card or any of your personal ID documents such as your passport, driver licence, work permit, employment pass, or ATM card
  • Ask for your signature in a blank or incomplete Note of Contract
  • Not giving you a copy of your Note of Contract for the loan after granting you the loan
  • Not properly explaining the terms and conditions of the loan
  • Granting the loan without following the standard process e.g. approving the loan over the phone or SMS
  • Withholding any part of the principal loan without any reason or explanation

Take in mind those practices are not acceptable. If you have encountered them, you must report the licensed moneylender to the registry of Moneylenders providing the moneylender’s business name, licence, and contact number.

You can lodge a complaint against the licensed moneylender Singapore that is involved in unfair practices such as those mentioned above to the Registry of Moneylender. You can contact them at 1800-2255-529. The registry will investigate this matter.

Also, in line with unfair practices, you can pursue this matter through Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act.

Ready to borrow from a licensed moneylender in Singapore? Get started with Crawfort. 

What Should You Do Once Your Loan Has Been Approved?

Closeup of hands writing notes

Once your moneylender has approved your loan and has given the principal amount to you, make sure they’ve charged you the correct amount for the approval fee. As noted earlier, a legal moneylender in Singapore can only charge up to 10% of the principal amount for administrative fees. 

Documents To Keep

You should also have the following documents for your reference:

  • A copy of the loan contract
  • Receipts for every payment you’ve made towards your loan
  • A statement of account for all your loans
  • Copies of all accounts, receipts, and any other relevant document

Pay Your Repayments On Time

Ensure that you’re paying each instalment by the due date.  

Paying them late will not only lead to your instalments accumulating but also incurring late fees and late interest.  You need to pay a late interest of not more than 4%. Having your debt accumulate can also make it harder to pay it off. Thus, in the end, it can be a problem.

What Are Your Legal Options In Case You Find Yourself Unable To Pay Back The Loan?

When borrowers default on their payments and are unable to pay moneylender in Singapore, licensed moneylenders usually hire debt collection agencies to collect debts.  

While there are no laws that regulate debt collection in Singapore, licensed moneylenders and debt collectors are encouraged to abide by the code of ethics laid down by the Credit Collection Association of Singapore

Debt collectors are not allowed to use violence, harassment, or intimidation as a means to collect debts. In the unfortunate event that you find yourself facing such a situation, be sure to report them to the police.

Learn more about what licensed moneylenders can’t do when collecting debts here. 

Request For Extension

The best way to deal with the situation is to talk to your licensed moneylender and negotiate for an extension. You may also consider going to social services to seek help in credit counselling and debt management. 

Learn more about how credit counselling and debt management work. 

File For Bankruptcy

However, if your debt amounts to at least S$15,000 and you find yourself unable to pay it off even after you’ve restructured your loan repayments, you may consider filing for bankruptcy. 

When a borrower files for bankruptcy, the accumulation of interest is stopped. It also prevents moneylenders from carrying out any legal proceedings against the borrower. 

Find what happens if you file for bankruptcy here.

Have questions about getting a personal loan? Read our FAQs to find out more.

Some Organisations That You Can Approach For Help

If you find yourself in huge debt, filing for bankruptcy should only be your last resort. You should consider approaching any of these organisations for help.

Credit Counselling Singapore(CCS)

Credit Counselling SingaporeCredit Counselling Singapore is a non-profit organisation that helps people with debt management through financial counselling and education. If you need help in arranging a debt repayment schedule to pay back your loan comfortably, this is the organisation to go to. 

Registry Of Moneylenders (MinLaw)

Ministry of LawThe Registry of Moneylenders is responsible for the regulation of moneylenders in Singapore. Before borrowing from a moneylender, be sure to verify if it’s a licensed one by checking on the Registry’s list. You should also refer to their FAQ to understand more about borrowing from licensed moneylenders. 

Credit Collection Association Of Singapore (CCAS)

Credit Collection Association Of Singapore (CCAS)Credit Collection Association of Singapore represents all the credit agencies and associations in Singapore. They ensure that all credit agencies uphold their code of conduct. In addition, they provide dispute resolution services for agencies and clients. Should you find yourself in a dispute with your lender, you may approach them to resolve the matter. 

National Council On Problem Gambling (NCPG)

National Council On Problem Gambling (NCPG)

If you take out a loan or find yourself unable to pay off your loan due to gambling addiction, you should get in touch with the NCPG. The organisation helps gamblers and their families manage problem gambling. 

Credit Association Of Singapore

Credit Association Of SingaporeCredit Association of Singapore is an association for all licensed money lenders in Singapore. You may contact them for more information on borrowing, as well as the various licensed moneylenders in Singapore. 

ComCare (MSF)

ComCare (MSF)ComCare is a fund under the Ministry of Social and Family Development (MSF). It works to empower low-income individuals and groups, enabling them to become self-reliant. There are various kinds of assistance that you can get from them, including urgent financial aid. 

The Final Word

At the end of the day, there might be times when you find yourself strapped for cash. And one good way of dealing with it is to take a short-term loan and pay it back on time. 

While most people will turn to banks to get loans, there are some who turn to private money lenders in Singapore for faster approval. Unfortunately, it’s also uncommon that borrowers run into unauthorised money lenders, who charge very high-interest rates or even scam them. 

To safeguard yourself against these illegal money lenders, be sure to engage with only licensed money lenders. If you encounter any unauthorised money lenders, you should report them to the police.

In need of cash urgently? Apply now with Crawfort, an established licensed money lender in Singapore. 

Personal Loan For Students With No Income Is It Possible

Are you a student in Singapore struggling with money? A personal loan can be of great help for things like rent, school expenses, or other costs. But what if you don’t have a job? Can you still get a loan?

The good news is that yes, you can get it even without showing income proof. However, you’ll need to provide other documents to convince the lender that you can pay them back.

If you need a personal loan in Singapore but don’t have the necessary income documentation, this article has you covered.

What Is A Personal Loan?

A personal loan is a sum of money borrow from a bank or money lender that you can use for various needs.

Think of it as a helping hand for those times you need some extra cash. It is a flexible way to get money for things like finally getting rid of those pesky credit card balances, fixing up your house, or throwing that dream wedding you’ve always wanted.

Banks, credit unions, and even money lenders are there to provide you with a personal loan.
Unlike car loans or mortgages, you don’t need to put up any property as security. The lender approves your loan based on your credit history.

Where To Get A Personal Loan

In Singapore, you can get personal loans from banks or licensed money lenders. Banks generally offer lower interest rates (the cost of borrowing) and longer repayment periods.

However, money lenders might be faster and more flexible, but their interest rates can be higher.

Discover the difference between borrowing from legal lenders and banks.

Important Rules Followed By Money Lenders

The Singapore government has rules to protect borrowers from unfair practices. Here’s what licensed money lenders must do:

  • Interest Rate Cap: They can’t charge more than 4% interest per month, regardless of your income or loan details.
  • Limited Fees: They can only charge specific fees, like late payment penalties, and not things like processing fees.
  • Loan Amount Limits: The maximum loan depends on your income and if you own property. It can be $3,000 or $6,000, depending on your situation.

Clear Loan Terms and Conditions: They must provide a contract with all the loan information (amount, interest, fees, and repayment schedule) before you agree.

Getting Approved For A Student Personal Loan

Credit score matters

Lenders look at your credit score to see how good you are at managing debt. Your payment history, the length of time you’ve had credit, and any current loans you have all affect your credit score.

You have better odds of approval with a good score and worse odds with a poor one.

Proof of Income (The Tricky Part)

Normally, lenders want proof that you can repay the loan. This can be tough for students without a job.

But some lenders might consider alternatives like scholarships or regular allowances from family. Always check what each lender requires for proof of income.

Additional Requirements for International Students

If you’re an international student, there might be additional hurdles to jump.

On top of the usual requirements, you might need documents like your passport, work contract (if you have one), and proof of where you live in Singapore.

Some lenders might even ask for a Singaporean guarantor, someone who promises to clear the loan if you can’t. Always double-check with the lender to see what extra steps you need to take.

How to Get Approved Even Without Income

Even without a paycheck, you might still be able to get a personal loan to cover school costs or living expenses. The key is to look beyond traditional lenders.

Finding the right lender

Banks typically require proof of income, but other lenders might be more flexible. Look for institutions that cater to students or those without regular income.

What to show instead of payslips

Instead of payslips and bank statements, you can provide documents like your ID, passport, and school records to prove you’re a student.

Some lenders might also consider guarantors who can vouch for your ability to settle the loan.

Putting up collateral

One way to improve your chances is by offering collateral, a valuable item the lender can take if you can’t repay the loan.

This could be a car, jewellery, or even property (if you own any). While collateral makes approval easier, remember that you risk losing it if you can’t repay the loan.

Finding a guarantor

Another option is finding a guarantor, someone who promises to settle the loan if you can’t. This can be a friend or family member with good credit.

A guarantor assures the lender they won’t lose money, making them more likely to approve you.

Make sure you fully trust this individual, as a default could potentially impact their credit score.

Teaming up with a Friend (Joint Applications)

Teaming up with a friend or family member who also needs a loan can be a smart strategy. By combining your applications, your total income increases, making approval more likely.

Joint applications can also lead to better interest rates and shared loan responsibility.

However, only team up with someone you trust completely, and ensure you both understand the loan terms thoroughly.

Important Note: Requirements Can Vary

Different lenders might have different requirements for documents and income proof. Some might ask for bank statements or payslips to assess your repayment ability.

Always check with the lender beforehand to ensure you have everything they need.

Getting a personal loan as a student in Singapore without income can be challenging, but it’s not out of reach.

By providing the right supporting documents and alternative income proofs, you can increase your chances of getting approved and securing the financial help you need.

Finding Financial Support for Singaporean Students And Unemployed Individuals (Even Without Income)

Applying for a Student Personal Loan

Even without a paycheck, you might qualify for special personal loans designed just for students.

These loans often come with lower interest rates and more flexible repayment options compared to regular personal loans.

Be prepared to show proof of enrollment, and you might even need a guarantor to vouch for you.

Applying for Financial Products for Unemployed

Being unemployed doesn’t mean you’re out of options. Some lenders offer short-term loans specifically for the unemployed, often called payday loans or cash advances. However, beware! These loans typically have high interest rates.

Consider bank loans as well, though they might be harder to get without income. You might need collateral or a co-signer to secure a bank loan.

Using Credit Cards

Credit cards might not give you a big chunk of cash upfront like a loan, but they can be helpful for managing everyday expenses.

Some cards even offer cashback or other perks that can ease the financial burden.

Choose cards with low interest rates and no annual fees, and remember: on-time payments are crucial to avoid high charges and hurting your credit score.

While it can be tougher to get a loan without income, there are still possibilities in Singapore.

Explore student loans, payday loans, bank loans, and credit cards to find the best fit for your situation.

Always prioritise responsible borrowing, and be mindful of repayment terms and interest rates.

Interest Rates And Repayment Plans For Student Loans In Singapore

Interest Matters: How Much Do You Pay to Borrow?

Interest rates are like fees you pay for borrowing money. These rates can vary depending on the lender, the amount you borrow, and how long you borrow it for (loan term). In Singapore, personal loans usually have fixed interest rates, meaning the rate stays the same the entire time.

Higher interest rates mean more money you repay in total. For example, a loan with a high interest rate will cost you more each month compared to a loan with a lower rate.

Repaying Your Loan: How Much and When

The repayment terms explain how you pay back the loan. This includes how much you pay each month (instalment amount), how long you have to repay (loan tenure), and the specific schedule for payments.

Choose a repayment plan that fits your budget! Some lenders offer flexible repayment options, so you can adjust your payments based on your financial situation.

Loan tenure is also important. This is the total time you have to repay the loan. In Singapore, personal loan terms typically range from 6 months to 5 years.

When considering a personal loan in Singapore with no income, interest rates, repayment terms, and loan tenure are all crucial factors. Understanding these will help you choose a loan that you can afford to repay on time.

Student Loans in Singapore: Your Smart Guide to Avoid Debt Traps

Personal loans can be helpful, but it is very essential to know what you’re getting into, especially if you don’t have a steady income.

It’s important to manage your debts wisely to avoid a trap. Here are some tips:

Facing a Mountain of Debt? Take Action!

If you find yourself drowning in debt, the first step is to take control. Make a spending plan and follow it! Keep tabs on your expenditures and find places you can save money.

Think about getting a cheaper interest rate on all of your loans by consolidating them into one.

As a result, things become easier, and the total amount of interest paid goes down.

Getting Help from Licensed Moneylenders

Licensed moneylenders are government-regulated and offer lower interest rates and flexible repayment plans compared to some lenders.

Before jumping in, compare rates and terms from different licensed moneylenders to find the best deal.

Illegal Lenders: A Big No-No!

Stay away from loan sharks and other dishonest lenders. They have a reputation for charging outrageous interest rates and using aggressive collection tactics. Even going to the extent of harassing and breaking the law is possible with them.

Make sure the lender has the proper licence from the Ministry of Law before you borrow money from them. You can get a list of reliable lenders on their website.

Remember that key to keeping afloat is responsible debt management. If your debts become too much to handle, make a budget, and if necessary, look into licensed money lenders for assistance.

To avoid falling victim to unscrupulous lenders, it is important to conduct thorough research and select a respectable one.

Paying Off Your Student Loan Without Going Broke

Budgeting for Loan Repayments: Be Realistic

Before you take out a loan, take a hard look at your finances. Create a detailed budget that considers the loan amount and repayment schedule.

How the loan will affect your savings and future income can be better understood with this information. You may easily return the loan on time if you plan ahead financially and stick to your budget.

Getting Help from a Financial Advisor

Getting a personal loan without a regular income can be complicated. You might want to think about consulting a financial counsellor.

They offer individualised assistance with loan management, budgeting, and selecting the finest savings accounts. In order to qualify for the loan and make prudent financial decisions that support your long-term objectives, their advice can be priceless.

Responsible borrowing is key! Consider all your options, get professional advice if needed, and prioritise repayment to avoid debt traps.

Ready to apply for a personal loan? Apply with Crawfort today!

Young lady on a laptop seeking out a personal loan in Singapore

Whether it’s to buy a first home or pay for education, most of us probably need to take a loan at least once in our life. However, not all loan applications can turn out successful. If you’ve applied for a personal loan in Singapore before but got rejected, it could be due to your credit score. 

Lenders often assess whether to give you a loan or not based on your credit score. A bad credit score can hamper your personal loan application in Singapore, but many people forget that.

Not many know what causes a bad credit score, much less what to do with a bad credit score. In fact, some may not even know what a credit score is. 

If you happen to be one of these people, don’t worry. In this article, we’ll tell you all you need to know about credit score and how you can get a fast personal loan in Singapore even with a bad one.

What’s A Credit Score?

A credit score is a numerical value assigned to borrowers indicating how likely they are to repay their debts. This is provided by a ratings company that assesses the creditworthiness of borrowers independently and objectively.

Credit scores are also used by lenders to assess a credit applicant’s risk, and is based on areas such as payment history on loans.

In Singapore, there are two credit rating systems: 


If you’re looking to get your credit report, you can approach either the CBS or the Moneylenders Credit Bureau (MLCB). Banks and finance companies get their customers’ credit report from the CBS, while licensed moneylenders get them from the MLCB.

CBS Credit Score

CBS credit score is a system often used by banks and financial institutions. When you apply for a personal loan from Singapore banks, the bank will request records from CBS.

The CBS credit score can range between 1000 and 2000, with 1000 being the worst and 2000 being the best. Individuals are given a risk grade based on their score range, which indicates the probability of a loan default.

Score Range Risk Grade Probability of Default
Min Max
1911 – 2000 AA 0.00% 0.27%
1844 – 1910 BB 0.27% 0.67%
1825 – 1843 CC 0.67% 0.88%
1813 – 1824 DD 0.88% 1.03%
1782 – 1812 EE 1.03% 1.58%
1755 – 1781 FF 1.58% 2.28%
1724 – 1754 GG 2.28% 3.46%
1000 – 1723 HH 3.46% 100.00%

DP Credit Rating

The DP credit rating applies only to business loans. It is essentially a financial risk model that assesses the default probability of a business. A business is assigned a Probability Default (PD) score based on scorings for factors such as growth and profitability. The PD score then corresponds to an expected DP credit rating.

If you want more information on the DP credit rating system, you can take a look at the detailed rating chart here

Now that we know the basics of the credit rating systems in Singapore, let’s look at what actually causes a bad credit score.

What Can Cause A Bad Credit Score?

Let’s look at 4 common reasons why you may have a bad credit score.

1. Making Late Repayments

If your loans are overdue, you’re probably going to end up with a poor credit score. Often, lines of credit require a minimum repayment before the end of the billing cycle, with the amount varying according to the type of loan you have. 

Being 30 days late on the minimum repayment will get you a delinquency status from CBS. Having to pay late fees also reduces your credit score.

To improve your credit rating, make your loan repayments on time. It’s also a good idea to call your bank in advance to inform them if you think that you’re going to be late with repayments.

2. Taking Several Loans Within A Short Period

Be careful not to apply for too many loans within a short time frame. 

If you take too many loans in a short time frame, your credit score will take a hit. This is because such behaviour signals to banks that you’re facing financial difficulties. As such, they will naturally be concerned that you’re unable to repay the loan.

One tip is to take out one large loan over multiple small ones. Before taking up a personal loan in Singapore, make sure you calculate how much you need first. This is so you don’t have to take out more loans than necessary.

You should also wait for a while between taking out loans. That way, you can avoid unintentionally ending up negatively affecting your bad credit score.

3. Having Multiple Credit Card Applications

Credit Card
Avoid applying for too many credit cards within a short time span

Banks and financial institutions check your credit score each time you apply for a credit card. If you apply for multiple cards within a short period, there will be multiple enquiries on your credit score during this time. Again, this can hurt your credit score.

The simple solution is to just wait.

Monthly intervals between your credit card applications should do the trick. This prevents your credit rating from dropping, thereby increasing your chances of having your personal loan in Singapore approved.

4. Defaulting On A Loan

A loan default happens when a lender writes off your debt, occurring when you cannot pay back your unsecured loan. Since unsecured loans do not have any collateral attached to them—such as most personal loans in Singapore—lenders may write off your debt or petition for bankruptcy against you.

Note that a loan default is very damaging to your credit score and will stay on your credit record forever. This will deter lenders from providing you loans since they cannot trust that you can repay your loan. Remember: one default can ruin your chances of securing a loan in future. 

Learn more about what else can damage your credit score here. 

How Can I Get a Personal Loan In Singapore With A Bad Credit Score?

Infographic on how to get a personal loan with a bad credit score in singapore
Here’s how to get a personal loan in Singapore if you have a bad credit score

A bad credit score can hurt your chances of securing a personal loan in Singapore. But there are still ways for you to work towards getting one even with a bad credit score. 

1. Restructure Your Debts

Having outstanding unsecured debts can lead to a lower credit score. Paying off existing debts first will improve the score, giving you a higher chance of securing a personal loan in Singapore.

You can also ask banks to restructure your debt. This means negotiating with your bank to reduce the interest rates or extend the tenure of your pre-existing loan. A longer repayment period lowers the amount you must pay each month, which can be a big help to you. 

You might be surprised that banks can be quite accommodating when it comes to restructuring debts. Some means of restructuring your debt include going for a debt consolidation plan. This combines multiple debt balances into a new loan with a lower interest rate.

Learn more about how a debt consolidation plan can help clear your debts here. 

2. Apply For Smaller Loans

It might be difficult to take out a larger personal loan in Singapore with a bad credit score. What you can do first is apply for smaller personal loans.

However, remember to pay back these personal loans in time and in full each time! Doing so shows that you are capable of paying back your loans, thereby improving your credit score. You’ll then have a higher chance of getting a larger personal loan approved in future.

However, note that you may need to do this a couple of times to improve your credit score sufficiently before a lender can grant you a larger personal loan in Singapore.

3. Explore Options Such As Licensed Money Lenders To Get A Personal Loan In Singapore

You don’t always have to take a loan from a bank. Remember that you can also consider alternative lenders such as licensed money lenders to secure a personal loan in Singapore. 

Licensed money lenders in Singapore tend to be more flexible in granting you a personal loan even with a bad credit score. They also offer fast approval, from a day to even an hour.

In short, licensed money lenders are a good alternative if you need to take out a loan quickly if you’ve been rejected by banks due to a poor credit score.

However, do note that there are income and age requirements. Typically, applicants need to be younger than 60 years old, and earning a minimum annual income of S$30,000.

However, with Crawfort, you can borrow up to S$3,000 even if your income is less than S$20,000.

If you urgently need a personal loan in Singapore but have a bad credit score, approaching a licensed money lender might be your next best bet. Let us help you with your personal loan needs.

 

Whether it’s buying that dream HDB flat, sending your kid to a good school, or starting your own business, sometimes personal loans are the way to go. But remember, loans aren’t free money, got interest to pay one!

Which is why this article on how to calculate interest rates for loans is useful for anyone in Singapore who wants to borrow money wisely.

Interest is basically the extra cost you pay for borrowing money. Sounds simple, but the calculations can get a bit tricky with things like your loan amount, interest rates, and how long your loan is for. If you don’t know what you’re doing, you might end up paying way more than you realised. That’s why in a high-cost city like Singapore, being financially savvy is crucial.

For example, a loan with a low advertised rate might sound good, but when you add on all the other fees and charges, ouch! Or you take a longer loan, thinking the payments will be smaller,

Understanding Interest Rates on Loans

When you borrow money, be it for a new car, a house, or any personal reason, you’re not just paying back the principal amount. There’s an extra charge on top, known as interest.

This is essentially the cost of borrowing money, a percentage charged by banks, financial institutions, or licensed money lender in Singapore.

The interest rate you end up paying is influenced by several factors, including your credit score, your income, the amount you’re borrowing, and the terms of the loan.

Breaking Down Interest Rates

Interest rates on loans come in two main types, and understanding how they work is crucial for making smart financial decisions. These rates directly affect your monthly payments and the total amount you’ll repay over the loan’s lifetime. Let’s break down the two primary types:

Advertised Rate

This often referred to as the nominal rate, this is the basic interest rate your loan starts with, not accounting for inflation. Within this category, you might encounter:

  • Flat Rate: The interest stays the same throughout your loan period, commonly seen in car loans and personal loans.
  • Monthly Rest Rate: This is calculated on the remaining balance of your loan, meaning as you pay off the loan, the interest decreases. It’s a common approach for home loans.

Effective Interest Rate (EIR)

The Effective Interest Rate or EIR is a bit more comprehensive. It includes additional fees like processing charges and considers the loan duration and repayment frequency, reflecting the compound interest effect. Essentially, the EIR gives you the real cost of your loan in Singapore, helping you to compare different loan options accurately.

  • Floating Rate: Linked to a benchmark rate (e.g., SIBOR or SOR), floating rates change daily. They’re suitable if you expect rates to drop and are comfortable monitoring market trends. Some floating rate loans may have a lock-in period.
  • Fixed Rate: As the name suggests, fixed rates don’t change during the lock-in period, which can last from one to five years. After this period, the rate might switch to a floating rate based on a benchmark. Fixed rates are ideal if you prefer stable monthly payments or expect interest rates to rise.

Understanding these terms and how interest rates work can demystify the borrowing process, making it easier to manage your finances and choose the loan that fits your needs best.

Whether you’re drawn to the predictability of fixed rates or the potential savings of a floating rate, being informed will help you navigate the loan landscape with confidence.

How Interest Rates From Banks Are Calculated

Having a firm understanding of how to calculate the interest on loans from banks is vital when it comes to managing your monthly spending. This is because the interest on loans from banks can be rather high.

This helps you determine whether or not the loan is within your financial means. Moreover, it gives you a clear image of what you are committed to doing on a monthly basis.

In Singapore, both car and personal loans typically use a flat interest rate, meaning the rate doesn’t change over the life of the loan.

To calculate your monthly interest payment, you can use the formula:

Monthly Interest Amount = (Interest Rate/Number of Payments) × Principal

For example, consider you take out a car loan of S$80,000 for 5 years at an annual interest rate of 2.5%, with payments due monthly.

(0.025/12)× 80,000 = S$166.57

This means you would pay S$166.57 in interest each month. By knowing how to calculate this, you can better plan your finances and ensure that the loan you’re considering is affordable for you.

Payments 5-year loan
Monthly payments S$1,499.90
Total amount paid S$9,994
Interest paid S$9,994

 

You may use a loan calculator to solve this.

On the other hand, the loan may be computed in a different manner by the bank or the lender. In order to obtain a more precise figure, you should check with them.

Understanding The Calculation Of Interest Rates By Licensed Moneylenders

Opting for a loan from a licensed moneylender in Singapore means you’re subject to an interest rate that can go up to 4%, a cap set regardless of your income or whether the loan is secured or unsecured.

For instance, consider taking a personal loan of S$2,000 with a one-month tenure at an interest rate of 3.92%. The interest you’d owe is S$78.40.

However, licensed moneylenders might use various formulas to calculate interest, so it’s advisable to consult directly with the loan officer for precise figures.

Influencing Factors on Interest Payments

Ever compared loans and thought, ‘Why does this one cost so much more?’ It all comes down to the factors that affect your interest payments.

Loan Amount

The principle here is simple – the larger the loan, the more interest you’ll end up paying. This is because larger loans represent greater risk to lenders, who in turn seek higher returns. It is wise to borrow only what you need.

For instance, borrowing S$8,000 over five years at a 2.5% interest rate results in S$1,000 in total interest. Doubling the loan amount to S$16,000, with all other factors constant, would double your total interest to S$2,000.

Interest Rate

The interest rate significantly affects the overall cost of your loan, with various factors influencing rates. A lower credit score, for instance, might result in a higher interest rate. Using the same example as above, an S$8,000 loan over five years, but with a focus on how the rate itself impacts total interest, highlights the importance of understanding and negotiating the best possible rate for your financial situation.

Payments 2.5% p.a. 4% p.a.
Interest paid S$1,000 S$1,600

 

Additionally, it is crucial to understand the type of interest rate applied to your loan.

For example, with a floating interest rate, your interest expenses could fluctuate throughout the duration of your loan, potentially increasing or decreasing based on market conditions.

Loan Duration Considerations

The length of time you’ll be repaying the loan is another important factor. Opting for a shorter loan term usually means you’ll face higher monthly payments, but you’ll also pay less interest overall, offering savings in the long run.

Conversely, a longer loan term spreads out your payments, making them more manageable month to month. However, this approach also means you’ll accrue more interest over the life of the loan, affecting the total cost.

Let’s put this into perspective with an example comparing two scenarios: a 5-year vs. a 7-year loan term, assuming you’ve borrowed S$8,000 at an annual interest rate of 2.5%.

This comparison will help illustrate how the term length directly influences both your monthly payments and the total interest paid.

Payments 5 years 7 years
Interest paid S$1,000 S$1,400

Understanding Your Repayment Plan

How To Calculate Interest On A Loan - Repayment Plan

When it comes to the total amount of interest that you wind up paying, the frequency of your loan repayments might be a significant factor. Because you are able to make payments on a more regular basis, you will be able to reduce the amount of the loan’s outstanding balance on a more frequent basis.

By increasing the frequency of your payments, you may be able to save a large amount of money on interest over the course of the loan’s lifetime, particularly if your lender processes interest calculations using a compounding method.

Choosing Your Repayment Amount

How much you choose to repay each month is equally crucial. Just like making payments more frequently, opting to pay a bit more each month can reduce the overall interest you’ll pay.

This is because you’re directly reducing the loan’s outstanding balance quicker.

In the event that you are considering increasing the amount of your monthly repayment, it is essential to be certain that these additional payments are being allocated to the reduction of your main balance.

When your extra payments are reducing the principal, you’re not just getting closer to being debt-free; you’re also reducing the total interest cost.

Navigating your repayment schedule and amount wisely can make a tangible difference in managing your loan efficiently and economically.

Figuring Out Your Total Repayment Sum

Now that you’ve got a handle on calculating total interest, it’s equally important to know how to work out your total repayment amount for a loan.

The formula is straightforward:

Total Repayment Amount = Principal Amount + Total Interest Amount + Any Additional Loan Fees

Remember, banks and lenders may tack on various fees and charges, which will increase the overall cost of your loan.

If you’re finding these calculations a bit daunting, don’t worry. You can make use of online personal loan calculators.

Most major banks offer these tools on their websites, allowing you to easily estimate your total repayments right from the comfort of your home.

How To Secure Favourable Loan Interest Rates

Imagine saving a ton of money just by getting a good interest rate on your loan. That is totally possible. But how do you actually make it happen? Check out this quick guide to getting the best deal possible.

Boost Your Creditworthiness

In Singapore, your credit score is a key indicator of your financial health, derived from your past credit activities. You can get a detailed credit report from the Credit Bureau of Singapore (CBS) for a nominal fee of S$8.

A good credit score not only shows you’re a reliable borrower but can also unlock benefits like lower interest rates, more substantial loan amounts, or more extended repayment periods.

To improve your credit score, consider these practical steps:

  • Always pay your debts on time.
  • Avoid loan defaults at all costs.
  • Keep your number of credit facilities reasonable.
  • Limit your loan applications within a short timeframe.
  • For those with a less-than-ideal credit history, consolidating your debts and maintaining consistent repayments can help repair your score.

Learn about other ways to boost your credit score.

Opt for a Shorter Loan Duration

Short-term loans may have higher monthly payments, but you’ll save money on interest overall. If you can afford it, a shorter loan term is a smart financial choice

Align with Total Debt Servicing Ratio (TDSR) Guidelines

​In Singapore, Total Debt Servicing Ratio or TDSR ensures borrowers don’t take too much debt.

It limits how much you can borrow based on your income. Staying within this limit is smart financially and can even get you better loan terms.

Aim to keep your total monthly debt payments under 60% of your income.

Struggling to meet TDSR criteria? Here are some alternatives:

  • Increase your down payment.
  • Consider a longer loan term or a more budget-friendly option.
  • Disclose any additional income sources, like bonuses or rental earnings, to your bank.
  • If co-borrowing, reevaluate if your partner’s debt levels are adversely affecting your loan conditions.

Navigating these steps can significantly enhance your chances of securing a loan with favourable interest rates, setting you on a path to financial success.

Other Costs To Consider

Embarking on a loan journey involves more than just managing interest payments. You may be subject to a number of additional fees and charges, all of which have the potential to impact the total cost of your loan.

Here’s a rundown of potential extra costs to keep in mind:

Processing Fee

Often charged right after your loan gets approved, this administrative fee covers the cost of processing your loan application.

Amendment Fee

If there’s a need to tweak your original loan application, an amendment fee may apply.

Cancellation Fee

Deciding against the loan after agreeing to the terms? Watch out for cancellation fees.

Excess Charges

Borrowing beyond your approved overdraft limit incurs excess charges.

Late Payment Charges

Missing the payment deadline? Late fees will be added to your bill.

Default Charges

These are levied if you fail to make payments as per your loan agreement.

Early Repayment Charges

Opting to settle the remaining loan balance before the end of your loan term can lead to early repayment fees.

In order to have a complete understanding of the total cost of the loan, it is essential that you incorporate these additional fees into your financial planning.

Having everything in place guarantees that you are completely ready for the financial commitment that you are about to make.

Smart Tips for Comparing Loan Offers

Understanding the ins and outs of loan interest can significantly influence your financial decisions.
However, when it’s time to sift through various loan offers, remember that patience and attention to detail are your best allies.

Each loan comes with its own set of terms and monthly payments, so finding the one that best suits your needs is key. Beyond just the interest rates, here are some other crucial elements to weigh:

Flexible Loan Duration

The length of your loan can greatly affect both your monthly payments and the total interest you’ll end up paying.

While a longer loan period might offer the appeal of smaller monthly outlays, it also means shelling out more in interest over time.

If your budget allows, opting for a shorter loan duration can save you money in the long run by reducing the total interest paid. Yet, if a shorter loan term comes with a steeper interest rate, consider a longer-term loan but try to make larger repayments when possible.

Total Loan Cost

Look beyond the monthly payments and calculate the total cost of the loan, which includes the principal, interest, and any additional fees. This total figure is what you’ll ultimately pay back to the lender, assuming you avoid any late or early repayment penalties.

Monthly Repayment Amounts

The monthly payment is a critical figure; it’s essential to ensure it’s something you can comfortably manage without overextending your finances.

Avoid situations where your payments are going solely towards interest, leaving the principal amount untouched.

How to calculate your monthly loan payment:

  1. Find the total interest: Multiply the loan amount by the annual flat interest rate, then multiply that number by the loan length in years.Example: Loan of S$8,000 at 2.5% interest for 2 years = S$8,000 x 0.025 x 2 years = S$400 total interest
  2. Add the interest to the loan amount: Take the original loan amount and add the total interest you just calculated.Example: S$8,000 + S$400 = S$8,400
  3. Divide by the loan length in months: Take the total from step 2 and divide it by the number of months in your loan term.Example: $8,400 / 24 months = $350 monthly payment

The Bottom Line

Before you sign a loan agreement, be sure you fully understand the terms, including the interest rate. Several things affect how much interest you pay on a loan, including your income, loan amount, repayment length, and credit score. While shorter loans often have higher monthly payments, you’ll usually pay less interest overall.

Never forget that interest calculations could vary throughout financial institutions. A loan calculator can simplify these calculations for you, making them easy and accurate.

Always check the whole cost of a loan, including interest, processing fees, and any other associated expenses, before signing any paperwork. Knowing all of the financial details of the loan you’re thinking about is the first step in making a smart decision.

So, are you ready to take out a personal loan? Let Crawfort help you with your loan needs. It only takes 8 minutes to approve your loan application. Apply for a loan now!

How To Pay Off CPF Accrued Interest

If you’ve used your CPF Ordinary Account (OA) to buy a home in Singapore, you’ll need to repay the withdrawn amount along with accrued interest when you sell the property. This accrued interest compounds annually at 2.5%. This guide will delve into the specifics of CPF accrued interest and present methods for effectively paying it down.

To understand how to pay off CPF accrued interest, let’s first learn what CPF is and accrued interest.

What Is CPF?

The Central Provident Fund (CPF) is Singapore’s mandatory savings scheme, providing a valuable pathway to homeownership while ensuring retirement and healthcare needs are met.

It helps Singaporeans build financial security by mandating regular contributions from both employees and employers. Here’s how the CPF supports your needs:

  • Ordinary Account (OA). Use your OA funds to tackle housing expenses like down payments, mortgage instalments, insurance premiums, and even property maintenance.
  • Special Account (SA). The SA is all about long-term financial stability. It’s designed for retirement savings and allows you to invest in approved financial instruments.
  • Medisave Account (MA). The MA is your dedicated healthcare fund, covering medical insurance, hospitalisation costs, and approved outpatient treatments.
  • Retirement Account (RA). When you turn 55, your OA and SA funds automatically merge into the Retirement Account, ensuring a consolidated foundation for your retirement years.

What Is CPF Accrued Interest?

When you finance your property purchase with your CPF Ordinary Account (OA) savings, you need to be aware of CPF accrued interest. This is essentially the interest you could have earned had you left those funds untouched in your CPF account.

Accrued interest is the interest your withdrawn CPF funds would have earned if left in your Ordinary Account (OA). It is calculated monthly and compounded yearly, based on the current CPF OA interest rate (currently 2.5%).

How to calculate CPF accrued interest?

Here’s the formula on how you can calculate CPF accrued interest:

Accrued Interest = Principal Amount x Interest Rate / 12 x Number of Months

Here’s an example of how to calculate accrued interest on CPF funds used for housing:

You withdrew S$80,000 from your CPF at an interest rate of 2.5% annually. You’ve owned the property for five years (60 months).

Calculation: (S$80,000) x (0.025 / 12) x (60) = S$10,000

When you sell the property, you must return the $80,000 principal plus the $10,000 accrued interest to your CPF account. This refund affects the amount available for retirement or future housing investments.

How to Check CPF Accrued Interest on CPF Portal

  • Access the CPF Portal: Log in to the official CPF website
  • Navigate to Your Statement: Select “My Statement” from the sidebar.
  • Find Section C: Scroll to “Section C” to see how much CPF money you’ve used and your available balance.
  • Review Accrued Interest: This section will clearly display the accrued interest on your CPF loan.

Understanding CPF Accrued Interest: How It Impacts HDB and Private Property Owners

The way you use your Central Provident Fund (CPF) savings for housing can have a significant impact on your finances, especially when it comes to accrued interest.

Let’s explore the key differences between HDB flat and private property ownership in Singapore:

1. Interest Rates: A Key Differentiator

  • HDB Flats: Enjoy lower interest rates on CPF funds used, leading to slower accumulation of accrued interest over time.
  • Private Property: CPF funds used for private property purchases accrue interest at a higher rate, potentially reducing the amount available for retirement or other financial goals.

2. CPF Usage: Flexibility vs. Restrictions

  • HDB Flats: Offer more flexibility in using CPF funds for the down payment, monthly mortgage payments, and even renovation costs.
  • Private Property: Have stricter regulations on how much of your CPF funds can be used.

3. Retirement Savings: The Long-Term Impact

  • HDB Flats: Owners potentially preserve a larger portion of their CPF for retirement due to lower accrued interest rates.
  • Private Property: Owners may see a significant portion of their retirement savings tied up in accrued interest, especially with multiple property purchases over time.

4. Property Resale: Accrued Interest Comes Due

  • HDB Flats: Upon resale, accrued interest is capped, limiting the amount owners must pay back to their CPF accounts.
  • Private Property: Owners must return the full amount of accrued interest, impacting their net proceeds from the sale.

Other Ways CPF Accrued Interest Affect Property Owners

  • Diminished Retirement Savings: Using CPF for property means less money compounding for retirement. Accrued interest further reduces available funds.
  • Higher Total Housing Cost: Accrued interest becomes part of the overall cost of your property.
  • Investment Returns: When calculating property investment profits, you must factor in accrued interest alongside the property’s appreciation.
  • Financial Strain: Paying back large amounts of accrued interest can be a burden, especially if you don’t sell your property at a high enough price.
  • Reduced Flexibility: Accrued interest can make you less likely to use your CPF savings for fear of impacting your retirement funds.

Real-World Scenarios: The Impact of Accrued Interest

To illustrate these concepts, consider these examples:

  • Upgrading Before 55. A young couple sells their HDB flat to buy a larger home. They discover their sale proceeds don’t cover the initial CPF used plus accrued interest, resulting in little profit.
  • Upgrading After 55. An older couple, now financially stronger, sells their HDB flat. Though they face accrued interest, their income growth allows them to comfortably purchase the next property.
  • Divorce and Unequal Split. A divorcing couple faces an uneven division of sale proceeds due to CPF contributions and accrued interest. This highlights how accrued interest can complicate asset division.
  • The First-Time Buyer. A young person debates using their CPF for a property down payment, weighing it against the potential opportunity cost of lost interest growth in their CPF account.

How To Pay Off CPF Accrued Interest?

When you use your CPF funds to buy a house, the amount withdrawn (plus interest) must eventually be returned to your CPF account. Accrued interest is the amount your money would have earned if left untouched in your CPF. Here’s how to repay it:

  • Cash Payment: Pay directly to the CPF Board.
  • Sale of Property: Interest is deducted before you receive sales proceeds.
  • CPF Savings: Use your existing CPF OA funds, if you meet the requirements.

Why Pay Back Accrued Interest?

It’s an investment in your own retirement. Paying back accrued interest grows your retirement nest egg faster.

Moreover, CPF accrued interest can significantly impact your retirement savings. When you sell your property, the accrued interest reduces the amount you can withdraw from your CPF, leaving you with less for your later years.

What If Sales Proceeds After Selling Your Home Cannot Meet The Refund Amount?

If you sell your property below market value, and the total CPF refund you owe (including accrued interest) is higher than the cash proceeds you receive from the sale, you are obligated to refund the entire amount of CPF savings used for the purchase. This may require you to:

  • Pay additional cash to cover the remaining refund amount
  • Refund any option money received from the buyer as it is considered part of the selling price.

However, if you sell your property at or above its fair market value, you are still required to refund the CPF you used, plus accrued interest. However, if your cash proceeds don’t completely cover this refund, you are not obligated to top up the difference in cash. You would only be responsible for partially topping up any shortfall.

How To Calculate The Sales Proceeds From Your Property?

How To Pay Off CPF Accrued Interest in Singapore

When selling your home, it’s crucial to determine how much money you’ll receive after paying off debts and fees. Accrued interest on money borrowed from your Central Provident Fund (CPF) is one significant factor. Here’s how to calculate everything:

Manual Calculation

  • Gather Information:
  • Your current home loan balance.
  • The total CPF amount used for the property purchase (principal).
  • Your accrued CPF interest (found on your CPF Home Ownership dashboard).
  • Estimated agent and legal fees.
  • Perform the Calculation: Subtract the outstanding loan balance, CPF principal, accrued interest, and additional costs from the expected selling price. This will give you a rough idea of your net sales proceeds.

HDB Sales Proceeds Calculator

If you own an HDB flat, use HDB’s dedicated calculator for the most precise result.

The manual calculation provides an estimate. For the most accurate figures, use the official online calculator by HDB.

How To Avoid Or Reduce Accrued Interest In CPF?

When buying property in Singapore, it’s inevitable that you’ll incur CPF accrued interest if you use your CPF Ordinary Account (OA) funds. However, there are intelligent strategies you can employ to reduce the amount you’ll eventually have to repay, ensuring more cash in hand after the sale.

Here are the key strategies:

1. Enhance Retirement Savings by Shifting CPF OA Funds to Your SA

One powerful tactic is moving your CPF OA funds to your Special Account (SA). The SA earns a higher interest rate (currently 4%), leading to faster growth of your retirement nest egg. While this move is irreversible, consider the long-term benefits.

For example, if you use $100,000 from your OA for housing, you’ll accrue around $12,500 in interest over five years. Transfer that same amount to your SA, and you could earn $20,200 in interest instead.

2. Refinancing for Lower Interest Rates

If you started with an HDB loan, refinancing to a bank loan with a lower rate can significantly cut costs.

Additionally, if you can switch some of your housing payments from CPF to cash, you’ll preserve even more of your valuable retirement funds.

HDB loans allow you to pay extra in cash, shorten your loan tenure, or reduce instalments on your current loan without incurring penalties.

Discover also about CPF Personal Loan.

3. The Power of Cash Payments

Whenever possible, paying your housing loan instalments in cash offers a major advantage. Since your principal amount stays untouched, no interest accrues on that portion. This safeguards your CPF savings for retirement or other crucial needs.

4. Voluntary Housing Refunds

Making voluntary cash refunds to your CPF account (either full or partial) effectively decreases the overall accrued interest. This lowers what you’ll owe when you sell the property and helps secure your retirement funds.

5. Partial Refunds for Flexibility

If a full refund isn’t feasible right now, partial refunds are a great way to slow the growth of your accrued interest. Pay off a portion of the principal or cover the principal without the accrued interest

6. Optimise Your CPF Usage

To truly gain an advantage in managing accrued interest, consider these detailed tactics within the broader strategy of optimising how you tap into your CPF funds:

Pay Down Early: The Power of Reducing Your Principal

Even small, additional payments towards your principal go a long way. Every dollar you pay above your regular instalment directly reduces the amount on which interest is calculated.

Look for opportunities to make lump sum payments when you have extra funds (bonuses, tax refunds, etc.). This has a significant impact over the life of your loan.

Use More Cash: Freeing Up Your CPF

  • Down Payments: If possible, consider making a larger down payment in cash. This instantly reduces the loan amount and the overall interest you’ll pay.
  • Monthly Instalments: Can you comfortably switch a portion of your monthly housing payments to cash? Even a small amount preserves more of your CPF savings.
  • Renovation & Maintenance: When it comes to home improvements, prioritise cash payments to protect your CPF funds. Remember, money kept in your CPF continues to earn interest, bolstering your retirement resources.

7. Property Upgrades – A Calculated Approach

If you’re planning to upgrade, minimising the time between selling your current property and buying a new one reduces the window for accrued interest to build up.

Be careful not to overstretch yourself financially by trying to time the market or buying properties purely for investment – these moves can backfire and lead to even greater accrued interest.

The Bottom Line

Buying a home in Singapore is a big step – it impacts your retirement savings too. That’s because when you use your CPF funds to buy property, you also start building up what’s called “accrued interest.” This can be a little tricky to understand, so it’s important to know how it works before taking the plunge into homeownership.

Think of accrued interest as a hidden cost. It can affect your retirement funds and even how much your monthly mortgage payments are. But don’t stress yourself – there are ways to manage it. Whether you pay it off gradually or in one go depends on your own financial situation.

To reduce or avoid accrued interest, it’s essential to plan ahead. Factor in this accrued interest when you’re thinking about selling your property.

Moreover, don’t just settle for the first mortgage offer you find. Shop around with different banks to get the absolute best possible deal. With a little planning, you can be a happy homeowner and set yourself up for a comfortable retirement.

Discover also if you can take home loan after personal loan in Singapore?

How Much Loan Can I Get From A Bank In Singapore

For many Singaporean homebuyers, the issue of “How much loan can I actually secure from a bank?” arises as an urgent concern. Because it depends on so many different personal details, this question doesn’t have a universally correct response.

To properly prepare for a house purchase, you must have a firm grasp of how financial institutions establish your loan eligibility. You can often borrow up to 75% of the property’s worth from Singaporean banks. The precise amount you can receive, however, is conditional on your own financial circumstances.

In this piece, we’ll look closely at the factors that banks mostly use to determine loan amounts. Your income, present debts, credit score, and the property’s worth are some of the many criteria that determine your home loan alternatives. So that you can get your house loan, let’s have a look at these things.

A Home Loan: What Is the Maximum Amount You Can Borrow?

The first step in buying a property is figuring out how much money you’ll need. To do this, you must be aware of your disposable income and the amount you are able to borrow from financial institutions. With this information in hand, you can narrow down your home search to match your budget. However, how can lenders assess your ability to borrow money?

Here in Singapore, the loan-to-value (LTV) ratio dictates how much you can borrow to buy a house. Typical loan-to-value (LTV) ratios offered by banks are up to 75%. This implies that the lenders will choose the LTV ratio that you are qualified for based on your income, debts, and credit history. The remaining 25% of the cost of the home can be paid for using a combination of cash and your Central Provident Fund (CPF). You’ll need at least 5% cash on hand and up to 20% from your CPF Ordinary Account (OA).

Outstanding House Loan LTV Limit Minimum Cash Downpayment
No outstanding debt 75% or 55% 5% down payment for an LTV of 75
1 outstanding loan 45% or 25% 25%
2 outstanding loans 35% 0r 15% 25%

 

Depending on your current debt load, your acceptable LTV ratio can change. If the loan term is longer than 30 years, the LTV ratio may need to be adjusted.

Lenders will give you a loan amount based on how much they think you can consistently pay back. In order to easily handle the loan repayments, it is crucial that you do a thorough assessment of your financial condition.

Making the Most of a House Loan Calculator

In order to properly prepare for the purchase of a home, it is vital to use a home loan calculator. It makes it easier to comprehend the EMIs (employee monthly payments) that are required to repay your loan. Home loan calculators are useful for more than just figuring out EMIs; they can also help you make better decisions. This is how it can be of service to you:

Finding the Optimal Home Loan Offer

A home loan calculator enables you to sift through various bank offers by showing you how different interest rates affect your monthly repayments and the loan’s duration. Using this comparison, you will be able to identify the loan conditions that are most acceptable for your current financial circumstances, guaranteeing that you select the most appropriate offer.

Assessing Affordability

By inputting various home prices into the calculator, you can explore different borrowing scenarios. By doing so, you are able to determine what you are actually capable of affording, ensuring that your home buying is in line with your financial capabilities and preventing you from exceeding your budget.

Understanding Down Payment Implications

The calculator illustrates how the size of your down payment influences the amount you need to borrow. A larger down payment reduces your loan requirement, and playing around with different down payment figures can help you decide the best amount to put down upfront.

Budgeting for Your Home Purchase

Understanding the down payment and monthly payments helps you plan and save accordingly. To guarantee that you are financially ready for this large investment, you should review your current financial status and create a budget for the purchase of a home with the assistance of a house loan calculator. This will ensure that you are completely prepared.

Through the provision of precise information and the provision of the opportunity to experiment with a variety of interest rates and loan amounts, the use of a house loan calculator eliminates the uncertainty that is associated with the process of purchasing a property. With this information at your disposal, you will be able to make a choice that is not only well-informed but also in line with your financial constraints.

What is the LTV Ratio?

The loan-to-value (LTV) ratio is a crucial factor in determining the amount you can borrow from a bank for a home purchase. The LTV ratio caps at 75%, allowing you to borrow up to three-quarters of the property’s value.

For the remaining 25%, it’s split into a mandatory 5% cash payment and a 20% portion that can be covered using your CPF Ordinary Account (CPF OA). For instance, if you’re eyeing a HDB flat priced at $500,000, the bank could lend you $375,000. You would then need to use $100,000 from your CPF OA for the downpayment, along with a $25,000 cash payment. The Monetary Authority of Singapore stipulates that the downpayment cannot be financed through additional loans.

However, banks do not guarantee the maximum LTV they offer. Several factors influence the final LTV ratio you qualify for:

Outstanding Loans

The presence of outstanding loans affects your LTV ratio. With one existing loan, you might only receive a loan covering 45% of your home’s value, with 55% payable through a combination of cash and CPF funds. More than two outstanding loans further reduce the LTV to 35%.

Loan Tenure and Age

The loan tenure also impacts the LTV ratio. For tenures exceeding 30 years or extending past the borrower’s 65th birthday, the LTV may be limited to lower thresholds.

Property Lease: The remaining lease of the property affects LTV. Properties with 36 to 40 years left on the lease can qualify for a 60% LTV, with a portion payable using CPF savings. Homes with less than 35 years on the lease might not qualify for a loan.

Property Condition and Location: The LTV can vary based on the property’s condition and its location. A lower LTV might be offered for properties in less desirable areas or those in poor condition.

Credit Score: A good credit score is essential for securing a favourable LTV ratio. A history of defaults or late payments can lead to a reduced LTV.

Cash Over Valuation (COV): If a property is priced above its market value, the difference is known as COV and must be covered in cash.

Understanding these factors can help you better prepare for your home loan application and navigate the financial aspects of purchasing a home.

What is the overall ratio of debt service payments?

The Total Debt Servicing Ratio (TDSR) represents the portion of your gross income allocated towards repaying debts, including the home loan you’re applying for. The Monetary Authority of Singapore mandates that your TDSR shouldn’t surpass 55% of your monthly earnings.

Lenders are able to evaluate your ability to manage debt without overextending your financial resources with the assistance of this guideline. By dividing your total debt obligations by your gross income, you can easily calculate your total debt service ratio (TDSR).

Banks take into account potential increases in interest rates when calculating your TDSR to ensure your debt levels remain manageable even if rates rise. For those with fluctuating incomes, banks may apply a lower TDSR to account for income variability. If you’re looking to boost your TDSR, consider co-applying for the home loan with your spouse, which can increase the combined gross income considered in the TDSR calculation.

How To Lower Your LTV Ratio

If you’re aiming for a smaller loan from your bank, lowering your loan-to-value (LTV) ratio is a strategic move. Here’s how you can achieve a lower LTV:

Opt for a larger downpayment.

Increasing your initial deposit reduces the loan amount you need from the bank. A substantial downpayment is an effective way to minimise your borrowing needs.

Choose a More Affordable Property

Opting for a property that’s within a more modest budget, combined with a significant downpayment, can also lower your LTV ratio.

Understanding the maximum loan you’re eligible for from a bank is crucial before embarking on your home search. Utilising a home loan calculator and the insights shared here can guide you to make well-informed decisions as you proceed with buying a property.

For the best loan options, consider Crawfort. Whether it’s financing the deposit for your new home or any other financial needs, Crawfort stands as a reliable licensed money lender. Get in touch with us or apply for a loan today to take the next step towards securing your dream home.

How To Do Debt Consolidation with Bad Credit in Singapore?

With the high cost of living in Singapore, handling various debts might be challenging. Debt consolidation can be really challenging especially for individuals with bad credit.

However, even with a bad credit score, it is not impossible to consolidate your debts.

This guide covers how to do debt consolidation with a bad credit score in Singapore.

A Guide to Bad Credit Debt Consolidation

Managing bad credit while consolidating debt can be complicated. Bad credit makes debt consolidation complicated. With a strategic plan, you can simplify your finances and secure your future.

Here’s a step-by-step approach for bad credit debt consolidation:

  1. Assess Your Debt Situation

Begin by understanding the full extent of your debts. Make a list of all your outstanding balances, interest rates, and monthly payments. This will give you a clear picture of your financial situation.2.  Research Debt Consolidation Options

  2. Research for Debt Consolidation Options

Despite having bad credit, there are still debt consolidation options available. Research and compare different debt consolidation plans offered by financial institutions in Singapore. Some common options include personal loans, balance transfer credit cards, or Debt Consolidation Plans (DCP).

  3. Consider Debt Counselling

Seek advice from a reputable credit counselling agency in Singapore. They can provide insights into your financial situation and guide you on the best course of action. They may also help you negotiate with creditors to achieve more favorable terms.

  4. Apply for a Debt Consolidation Plan (DCP)

If you are eligible, consider applying for a Debt Consolidation Plan. DCPs are designed to help individuals with multiple unsecured debts. While having bad credit may impact the interest rate, consolidating your debts can make repayments more manageable.

A Singapore debt consolidation plan (DCP) simplifies debt management by consolidating them into one account.

A financial institution-approved DCP covers debts, interest, and a 5% buffer for unexpected expenditures. After acceptance, you pay the consolidation institution monthly, simplifying finances.

Discover also types of personal loans in Singapore to consolidate your debt.

  5. Explore Secured Loans

If unsecured debt consolidation options are limited, consider secured loans. These loans are backed by collateral, such as your home or car, which may make lenders more willing to work with you despite bad credit. However, be cautious as your collateral is at risk if you fail to repay.

Learn more about the difference between secured and unsecured personal loan.

  6. Look into Peer-to-Peer Lending Platforms

Peer-to-peer lending in Singapore may be more flexible than traditional banks, especially if you can demonstrate an ability to repay the loan despite your bad credit history. Explore platforms that connect borrowers with individual lenders.

  7. Build a Co-Signer/Guarantor Arrangement

If possible, find a co-signer with a good credit history. A co-signer or a loan guarantor agrees to be responsible for the debt if you fail to repay. This can increase your chances of qualifying for a debt consolidation loan with better terms.

  8. Negotiate with Creditors

Contact your existing creditors and negotiate for better terms. Some creditors may be willing to lower interest rates or offer a more flexible repayment plan, especially if it means they are more likely to recover the debt.

  9. Create a Realistic Repayment Plan

Regardless of the debt consolidation option you choose, create a realistic budget and repayment plan. Stick to it to ensure you can meet your financial obligations and gradually improve your credit score.

  10. Monitor Your Credit Score

Regularly check your credit score and report. As you make timely payments, your credit score may gradually improve, making it easier to access more favorable financial products in the future.

If you are planning to apply for a debt consolidation plan, it’s best to familiarise yourself with the primary considerations before applying for a debt consolidation plan.

What Are The Key Considerations Before Applying For A Debt Consolidation Plan?

How To Do Debt Consolidation With Bad Credit in Singapore?

Assessment of Eligibility

To qualify for a DCP in Singapore, individuals must be Singaporeans or Permanent Residents (PRs) with an annual income between S$20,000 and S$120,000. Net assets should not exceed S$2 million, and the total debt must be at least 12 times the monthly income.

Choosing a Financial Institution

Various financial institutions and banks in Singapore offer Debt Consolidation Plans. Some of the prominent ones include DBS, UOB, OCBC, Standard Chartered, HSBC, Maybank, Citibank, RHB, Bank of China, HL Bank, CIMB, American Express, Diners Club, and ICBC.

Application Process

Gather the necessary documents, including NRIC (front and back), Credit Bureau Report, latest income statements, and statements for credit cards and unsecured credit. Submit the required documents to the chosen financial institution.

Loan Approval and Loan Amount

Once the application is approved, the financial institution will calculate the total amount to be consolidated. This includes the outstanding debts, outstanding interest, and an additional 5% buffer.

Repayment Terms

The borrower will be provided with a structured repayment plan. This plan typically involves monthly repayments over a fixed tenure, making it easier for the borrower to manage.

Additional 5% Buffer

The inclusion of an extra 5% in the total amount acts as a buffer to cover any unforeseen charges, late payment fees, or additional costs associated with the existing debts.

Suspension of Credit Facilities

Once the DCP is active, the individual is generally not allowed to apply for new credit cards or loans, and the use of existing credit facilities is suspended temporarily.

Revolving Credit Facility

While new credit applications are restricted, the financial institution offering the DCP may provide a revolving credit facility. This allows the individual to have access to credit for essential expenses.

Repayment Period

The borrower makes regular monthly payments to the financial institution for the agreed-upon tenure. The goal is to systematically pay off the consolidated debt.

Refinancing Considerations

If the individual wishes to refinance with another financial institution, there may be a waiting period of at least three months. Approval from the initial institution and potential penalty charges should be considered.

Completion of DCP

Once the agreed-upon tenure is completed, the borrower should have successfully cleared the consolidated debt. Any excess from the 5% buffer should be returned by the financial institution.

Remaining Balances

In some cases, the approved DCP amount might not cover the entire debt. If this occurs, the borrower is responsible for repaying the remaining balance.

How To Qualify For A Debt Consolidation Plan In Singapore?

If you’re considering a Debt Consolidation Plan (DCP) in Singapore to manage your financial obligations more effectively, understanding the eligibility criteria is crucial.

Here’s a breakdown of the eligibility requirements and the necessary documents for a successful DCP application:

  • Singaporean or PR

To qualify for a DCP, you must be either a Singaporean citizen or a Permanent Resident.

  • Annual Income

Applicants should have an annual income falling within the range of S$20,000 to S$120,000.

  • Net Assets Limit

The total net assets of the applicant should not exceed S$2 million.

  • Debt-to-Income Ratio

Your total debt must be at least 12 times your monthly income. This ratio helps assess the severity of your debt situation and determines your eligibility for a DCP.

Where to Apply for a Debt Consolidation Plan in Singapore?

Various financial institutions in Singapore offer DCP, including:

  • American Express International, Inc.
  • Bank of China Limited Singapore
  • CIMB Bank Berhad
  • Citibank Singapore Limited
  • DBS Bank Ltd
  • Diners Club Singapore Pte Ltd
  • GXS Bank
  • HL Bank
  • HSBC Bank (Singapore) Limited
  • Industrial and Commercial Bank of China Limited
  • Standard Chartered Bank (Singapore) Limited
  • Maybank Singapore Limited
  • Oversea-Chinese Banking Corporation Limited
  • RHB Bank Berhad
  • Trust Bank
  • United Overseas Bank Limited

Note: New financial institutions may be added or substituted. See the latest list here.

How To Apply for DCP in Singapore?

To apply for a Debt Consolidation Plan (DCP), you have the option to submit your application to any of the 16 listed financial institutions mentioned above. The decision to extend an offer is at the discretion of the respective financial institution.

What If You Don’t Qualify for DCP in Singapore?

If banks reject your DCP application, licensed moneylenders can be an alternative. They often have easier eligibility requirements, faster approval processes, and may offer benefits like low-interest rates and customisable repayment plans.

Here are some advantages of opting for a Debt Consolidation Loan from licensed moneylenders:

  • Low-interest rates. Enjoy the benefit of competitive interest rates.
  • Customisable monthly repayments: Tailor your repayment schedule to align with your financial capabilities.
  • Flexible loan duration. Choose a loan duration that suits your needs and circumstances.
  • Hassle-free application.  Experience a streamlined application process for your convenience.
  • Easier requirements. Encounter less stringent eligibility criteria compared to traditional banks.
  • Quick approval. Benefit from faster approval times, addressing your financial needs promptly.

If debt consolidation is still not attainable, consider the following alternatives:

  • Balance Transfers. Some banks provide balance transfer options, allowing you to consolidate credit card balances temporarily for relief.
  • Negotiate with Lender. Engage in discussions with your lender to explore refinancing options, maintaining transparency about your financial situation.
  • Credit Counselling. Attend credit counselling sessions conducted by recognised agencies like Credit Counselling Singapore. These sessions not only offer financial education but also provide assistance in managing debt effectively.

The Bottom Line

Dealing with debt, especially with bad credit, requires careful consideration of available options.

While debt consolidation plans offer a structured approach, alternative paths such as applying for a personal instalment loan from licensed money lenders, balance transfers, and credit counselling can also provide viable solutions.

It vital that you assess your overall financial situation, weigh the pros and cons, and choose a strategy that aligns with your financial goals and capabilities.

A man looking at his phone and looking for ways to get a personal loan in Singapore with bad credit

Need a personal loan with bad credit score?  It’s tough to get a personal loan in Singapore with bad credit. With a bad credit score, you automatically leave a poor impression on financial institutions, lenders, and banks.

The truth is that having bad credit can happen to anyone. A job retrenchment, a wrong choice in your twenties, or a medical emergency can bury you in debt and ruin your credit score.

However, there’s always a way out.

Even if it seems like you’ll never be able to get a personal loan in Singapore because of your bad credit, there are ways to improve your situation and increase the chances of your loan approval. 

Read on to find out more about the options you can explore!

What’s Considered Bad Credit? 

To answer this question, let’s clarify the concept of “credit score” first.

If someone were to ask you for a loan, would you say yes? Probably, but only to someone you trust. That’s the same in the financial world.

Since financial institutions don’t know you personally to figure out whether you’re trustworthy, they rely on your credit score. 

This credit score is based on your credit report, which is a summary of your credit history. Your credit report informs lenders of your financial activities and how good you are with repaying loans. 

Now, let’s learn more about the factors that will influence your credit score:

  • Number of recent loans: If you’ve taken too much credit within the last months, you give the impression that you’re credit hungry. It raises suspicions from lenders that you’re knee-deep in debt.
  • Utilisation pattern: If you have too much credit compared to your income, you may appear to be incapable of planning your finances. This is a sign that you’re spending out of your means.
  • Account delinquency data: If you make late payments, financial institutions will infer that you’re not trustworthy enough to make timely payments.
  • Past transactions: How and what you spend your money on is essential. If you’ve recently changed your spending habits or started spending significant amounts, you may seem fickle or desperate.
  • Available credit: Too many credit accounts are a red flag. Credit cards are notorious for their high-interest rates and usually, one will be tempted to spend more with more credit cards. In the worst-case scenarios, spenders are unable to repay their credit card bill in full, leading to debt.
  • Enquiry activity: The number of credit applications you make shows whether you’re a responsible or desperate credit user. 

All this information is crucial in allowing them to gauge your creditworthiness. It enables them to figure out:

  • If you can take a new loan now
  • How much they can lend you
  • What interest rate to charge you 

Banks generally use the credit score devised by Credit Bureau Singapore, while licensed moneylenders use the credit score from Moneylenders Credit Bureau (MLCB).

A Score Rating Of 1,000 To 1,723 Is Considered Bad Credit 

At the same time, all this information regarding your financial history translates into a credit score of between 1,000 and 2,000. You can check your credit score by purchasing a credit report from CBS and MLCB.

A higher rating means a better credit score and vice-versa. According to CBS, bad credit is anything between 1,000 and 1,723.

Here’s the credit score table devised by CBS:


Score range


Risk grade
Probability of default
Min Max
1911-2000 AA 0.00% 0.27%
1844-1910 BB 0.27% 0.67%
1825-1843 CC 0.67% 0.88%
1813-1824 DD 0.88% 1.03%
1782-1812 EE 1.03% 1.58%
1755-1781 FF 1.58% 2.28%
1724-1754 GG 2.28% 3.46%
1000-1723 HH 3.46%

100%

Source: Credit Bureau Singapore

Referring to the table, someone with bad credit has a high probability of defaulting (not paying their debt).

Therefore, if you have bad credit, you’re more likely to be rejected by banks. 

On the flip side, the credit score from MLCB is based on information provided by other licensed moneylenders. So the credit score you have with MLCB might be different from the one with CBS, potentially opening up more loan options.  

What Causes Bad Credit? 

If you want to get a personal loan in Singapore while you have bad credit, your best bet is to try and fix it first. And you can do so by understanding what might have caused your bad credit score. 

The first step is to get your credit report from CBS, which will only cost you around S$6.50. Based on the credit report, you can figure out what might have caused your credit score to plummet. 

Lack Of Credit History 

You’re probably thinking that never taking a loan tells financial institutions that you’re self-sufficient.

Not a lot of people know this, but if you’ve never taken any loan before, it doesn’t mean that your credit score is high.

In fact, never taking a loan lowers your overall score because financial institutions don’t know whether you’re good at repaying your loan, or how your financial standing is. 

Having a pre-existing loan or a credit card means there’s a track record of:

  • Being a loyal customer of a bank
  • Making timely payments
  • Repaying each instalment in full

Late Payments

Late and/or partial payments are a sure sign that you may not be able to repay a new loan. 

But there are times where faulty programmes can result in errors on credit reports, even if you’re always paying your bills and loans on time. 

A credit report dispute form

Be sure to check your credit report regularly and dispute any errors in it.

Luckily, you can dispute these errors once you get a hold of your credit report. This is also why it’s essential to check your credit report regularly. 

Loan Defaults

Defaulting your loan means not paying it. In this case, the bank writes it off as a loss.

However, even when the bank agrees that you can’t repay your loan, you’re not entirely off the hook. It’ll still be reflected in your credit history, which can result in: 

  • Having difficulty finding work, especially in the financial sector
  • Having money seized from your accounts 
  • Losing the assets with which you’ve secured the loan
  • Losing the assets that you’ve bought with the loan, a trend that’s on the rise among Singapore’s homeowners
  • Going through legal proceedings
  • Having difficulty obtaining a new loan

So it’s best that you avoid loan defaults as much as possible. 

Plus, the good thing is that banks are open to restructuring your loan or allowing you to just pay the interest for a few months until you get back on your feet.

Multiple Credit Facilities

Having multiple credit facilities reflects that you may be overstretching yourself.

It’s almost impossible to ignore all those promotions that banks in Singapore offer regularly. But it’s also important to say no to them, especially when you don’t need them. 

Here are some useful insights to keep in mind about taking on multiple credit facilities:

  • Maxing out on your credit card tells financial institutions that you can’t prioritise your financial needs.
  • Banks analyse outstanding credit by comparing it to your earnings. Too much credit shows you can’t manage your finances.
  • Applying for a lot of loans doesn’t maximise your chances of getting one. Instead, it may seem like you’re desperate for credit.
  • If you have a lot of active loans, banks believe that you don’t know how to spend money according to your financial means.
  • If you always have the card you need for discounted purchases at vendors around Singapore, it shows banks that you’re more interested in perks rather than wise spending.

Wondering what else might have brought down your credit score? Learn more about it here. 

How To Increase Your Chances Of Getting A Personal Loan In Singapore With A Bad Credit

Now that you know what bad credit is and what causes it, it’s time to do something about it.

Infographic on how to increase your chances of getting a personal loan in Singapore with bad credit

Consider other alternatives, such as applying for a loan at a licensed moneylender.

Avoid Mass Applying

You should never apply for various loans within a short period of time.

If you do that, you’ll send the wrong message to financial institutions. They can infer that you’re going through extreme financial distress and that you need a loan urgently.

Besides, financial emergencies can signal a higher probability that you’ll default on your loan.

So, even if you want to take advantage of excellent loan promotions, you should not take it unless you really need it. Applying to 5 different loans within a few weeks seems hugely desperate.

Moreover, mass applying signals to the credit bureau that you’re credit hungry, and this can lower your score. 

Here’s what you should do instead: 

  • Only apply for a second loan if a financial institution has rejected your first application
  • Spread your loan applications over several months
  • Do your research before applying to ensure your chances of success

Apply For Smaller Loans

Applying for smaller loans is a good idea as it increases your chances of getting one. 

Financial institutions are more likely to refuse bigger loans to people with bad credit scores, but they’ll be more eager to extend a smaller one. For example, if you intended to take on a loan of S$10,000, try lowering the amount to S$4,000. This increases the chances of getting your loan approved. 

And here’s the best part about applying for a small loan. Not only does it make timely repayments easier, but it also helps you to demonstrate that you’re financially responsible. 

This also helps you to improve your credit score and get out of your financial jam quickly. 

Apply With Licensed Moneylenders

Unfortunately, a lot of people with bad credit scores in Singapore turn to loan sharks when they can’t get a personal loan with the bank. However, it’s important to remember that unlicensed moneylenders are extremely dangerous and you should never borrow from them. 

Applying with licensed moneylenders is a much better solution because they don’t look at credit scores as much as banks, and don’t charge exorbitant fees like loan sharks. 

For instance, some licensed moneylenders in Singapore use their own systems to figure out if you’re creditworthy. If banks have rejected you, you can try applying at a licensed moneylender. 

Rest assured that licensed moneylenders won’t charge extremely high-interest rates. The maximum interest rate all licensed moneylenders in Singapore can charge is capped at 4% per month. 

If you’re looking for personal loans in Singapore, licensed moneylenders like Crawfort can help you even if you have bad credit. Crawfort allows you to get a personal loan even with a minimum annual income of less than S$20,000. 

Another benefit of applying with Crawfort is that their interest rates start from 1.8% per annum. This makes their loan packages one of the more affordable ones in the market. 

Regardless of your credit score, you should never borrow from unlicensed moneylenders. They are known for their sky-high interest rates and harassment tactics which may hurt you and your family! 

Not sure how else to differentiate between a licensed and unlicensed moneylender? Learn more about their differences here.

Planning to borrow from a licensed moneylender? Be sure to check out the things they aren’t allowed to do here. 

How To Clear Bad Credit History In Singapore 

Of course, the number one way to ensure you get a loan is to clear that bad credit history.

You won’t be able to do that in a day or a month, but with determination, you’ll be able to clear it eventually. 

Here’s what you have to do. 

Make Loan Payments On Time

Start paying off your existing debt, and commit never to miss a deadline again. 

This is where you need to instil discipline in your monthly expenses. Think about it: what have you been overspending on? How can you lower your expenses? 

Find out the ways to lower your spending and repay your debt. This way, you’ll be able to avoid late fees that make repaying your debt even harder. Doing so also reflects your tenacity to follow through with your financial obligations.

Restructure Your Debt

The first step to restructuring your debt is to negotiate with your lender. For instance, you can ask for a longer repayment period or a lower interest rate.

In some instances, an extension of the loan tenure might result in higher interest rates. While this doesn’t sound pleasant, it definitely is a better option than defaulting on your loan.

Loan defaults are almost detrimental to your credit score and should never be taken lightly. Where possible, you should always aim to repay all of your loans. 

Use A Balance Transfer

A balance transfer is a personal loan in Singapore that can help you to clear bad credit history.

Not only does a balance transfer consolidate all your credit card balances, it also helps to clear bad credit history.

This is a technique not known to many. An excellent way to repay outstanding credit is to get a more manageable loan to clear your debt.

An example of this is a balance transfer, which allows you to consolidate your credit card balances to a zero-interest account for a period of time. It gives you more time to make timely repayments, while improving your credit score faster. 

Learn more about how you can clear your credit card debt with a personal loan here.  

Use A Debt Consolidation Plan

Sometimes, the numerous loan repayments can make things confusing, causing you to miss out on a deadline. A debt consolidation plan can help to simplify everything for you. 

It works by combining small, high-interest loans into one, allowing you to just make a single payment every month for several loans. 

A debt consolidation plan is a personal loan in Singapore that’s extremely helpful in tidying up your finances, helping you clear bad credit history when you repay according to the schedule. 

Learn more about how a debt consolidation plan works here. 

Go For Credit Counseling

Financial habits can be difficult to change once they’re formed, especially if you have had poor financial habits for years. 

If you need assistance in restructuring your debt, credit counselling can help you negotiate with your lenders and manage your debt. 

The first step is to get in touch with a trustworthy credit counsellor from the Credit Counselling Singapore. This non-profit organisation has plenty of resources on their website that can help you restructure your debt. Alternatively, you can request a credit counselling session with them. 

Learn more about the services offered at Credit Counselling Singapore here. 

Limit The Number Of Open Credit Facilities

If you have more than 3 credit facilities, close the additional ones as soon as possible.

Out of sight, out of mind. No extra credit cards, no extra spending. 

Pay all your credit cards and loans, or refinance those you can’t repay on time, and make sure you have just 3 open credit facilities.

The first reason is that more credit tells financial institutions that you can’t manage your finances. It shows that you’re overextending and that you’re possibly credit hungry. 

It also makes you become more prone to missing your payments, which can result in a bad credit history. 

Moreover, all these open credit facilities require you to pay a lot of annual fees. So, it’s best to just stick to a few credit facilities. 

Wondering what else you can do to improve your credit score? Learn more about it here. 

How To Apply For A Personal Loan Within 8 Minutes 

Getting a personal loan with bad credit in Singapore isn’t as tough as you may think. With the latest technology and development, loan application at Crawfort, a licensed moneylender, is fast and fuss-free.

Plus, you can use your MyInfo login to apply, and get it approved as fast as 8 minutes. 

Ready to apply for a personal loan? Get it approved fast at Crawfort.