Personal loans can help tide you through unforeseen circumstances. However, before taking a personal loan, it is important to consider the interest rate involved, as it determines how much money you eventually need to repay.
In this article, we share the various personal loan interest rates in Singapore, alongside other possible fees and charges, to help you select a loan that is suitable for your needs.
What are personal loan interest rates?
Interest rate is a proportion of the loan principal – the amount borrowed – that a lender charges a borrower. This amount is to be paid on top of the amount you are borrowing from a financial institution. Generally speaking, banks charge around 3.5%-11% per annum, while licensed moneylenders in Singapore charge interest rates of 1%-4% per month.
The table below shows the various types of personal loans banks offer. The rates and amount payable stated are for borrowers with an income of S$2,500 a month and who want to take a loan of S$10,000, with a loan tenure of three years.
Personal loan options and interest rates of banks in Singapore:
Last updated: August 2022
| Name of Bank Loan | Interest Rate | Effective Interest Rates | Processing Fee | Total Amount Payable | Amount Payable Per Month |
| Standard Chartered CashOne | 3.48% | 7.99% | S$0 | S$11,044 | S$307 |
| Citi Quick Cash (New Loan Customers) | 3.45% | 6.5% | S$0 | S$11,035 | S$307 |
| HSBC Personal Loan | 3.2% | 6% | S$0 | S$10,960 | S$304 |
| UOB Personal Loan | 3.4% | From 6.36% | S$0 | S$11,020 | S$306 |
| Citi Quick Cash (Existing Loan Customers) | 4.55% | 8.5% | S$0 | S$11,365 | S$316 |
| DBS Personal Loan | 3.88% | 7.9% | S$100 | S$11,164 | S$310 |
| POSB Personal Loan | 3.88% | 7.9% | S$100 | S$11,164 | S$310 |
| OCBC ExtraCash Loan | 5.43% | 11.47% | S$100 | S$11,729 | S$323 |
Are there other fees and charges to consider when taking a personal loan?
Bank personal loans
Yes. Interest is not the borrower’s only expense. That is why the advertised interest rate (the lower rate that you see, often in a bigger font) is so low and attractive. It does not include other fees such as bank administrative charges, application fees, account processing fees, and penalties for late payment.
Most of these additional fees are reflected in the Effective Interest Rate (EIR), which is a more accurate reflection of how much banks are actually charging you for the loan.
Personal loans with licensed moneylenders
If you are borrowing from licensed moneylenders, the maximum personal loan interest rate in Singapore that they can charge is 4% a month. Likewise, should you fail to make your payments on time, the maximum rate of late interest the moneylender can charge is 4% per month for each month the loan repayment is delayed.
Licensed moneylenders can also charge you late fees not exceeding S$60 for each month of late repayment as well as processing fees not exceeding 10% of the loan principal.
The total charges imposed by moneylenders on any loan (including interest, late interest, processing, and late fees) cannot exceed the amount equivalent to the principal of the loan.
For example, if you take a loan of S$20,000 with a licensed moneylender, the interest + late interest + 10% administrative fee, and monthly S$60 late repayment fees cannot exceed S$20,000.
How to choose the personal loans with the lowest interest rates in Singapore?
1. Do your research
To determine which personal loan offers the lowest interest rate in Singapore, calculate the total interest and fees of each loan quote you are offered, compare the total amount payable for each loan, and then decide the loan that offers the most value-for-money.
2. Consider the instalment plans and loan tenure
Once you have laid out your budget and repayment plan, consider what your ideal instalment entails. Longer instalments generally mean spreading out the repayment over a longer term, so you pay less each month, conversely, shorter instalments mean paying more each month.
While it is easy to think that it is better to pay off your loan as quickly as possible, it is important to take into account your monthly cash flow and budget, and factor in possible financial emergencies that may affect your ability to pay the stipulated instalment. This could lead to additional late charges and fees due to late repayment.
3. Check the lender’s credibility
Before taking up a personal loan with a moneylender in Singapore, it is important to do a credibility check to assess the reliability of the lender. Ensure that the moneylender is licensed under the Ministry of Law, and also check for customer reviews on Google. A reliable moneylender always has happy and satisfied customers.
Be wary of loan sharks
While most people may prefer to take a loan from a bank, there are instances where this is not an option – for example, if one has bad credit. In such cases, it may still be possible to get a loan from a moneylender in Singapore. Should you decide to do so, do your research to ensure that the moneylender that you choose is licensed. All licensed moneylenders in Singapore registered under the Ministry of Law are bound under the rules and regulations of Singapore law. If you come across any moneylender that is not listed in the registry, it is not a licensed moneylender.
For more tips to ensure that you are dealing with a licensed moneylender, read the article here.
Find the personal loan with the lowest interest rate in Singapore
At Cash Direct, we offer competitive rates and flexible repayment terms to suit every budget. For more information, simply reach out to us.
