One big downside of having bad credit is that financial institutions, especially traditional ones like banks, are hesitant to approve personal loans in Singapore for borrowers with bad credit. The big questions: Is it possible to get a personal loan with bad credit? Where to get a personal loan with bad credit? Read on to find out the answers.
Yes, you can get a personal loan in Singapore even if you have bad credit. The good news is that banks aren’t the only legal loan providers in Singapore. One other option you may consider is licensed money lenders.
Any Singaporean, Permanent Resident or foreigner aged 18 to 65 years old may apply for a personal loan with licensed money lenders.
Here are the documents you will need:
For Singaporeans or PRs:
- Singpass-verified monthly CPF contribution statements or Notice of Assessment (NOA)
- Proof of income (e.g. Payslips, invoices or bank statements from the last 3 months)
For foreigners in Singapore:
- Work pass such as Employment Pass, S Pass or Work Permit
- Proof of residency (e.g. Tenancy contract, recent mobile bill)
- Payslip from the last 3 months
It is important to note that some licensed money lenders also extend loans to borrowers without full-time employment as long as they’re able to furnish proof of consistent income (e.g. rental income, alimony, etc).
Licensed money lenders are where you can get a personal loan fast, with or without good credit. While the exact loan amount granted depends on a few factors such as your income and existing loans, here’s the maximum total amount you can borrow on personal loans across licensed money lenders at any point in time:
|Borrower’s annual income
|Singapore Citizens and Permanent Residents
|Foreigners residing in Singapore
|Less than $10,000
|At least $10,000
and less than $20,000
|At least $20,000
|6 times monthly income
|6 times monthly income
It is essential that you check that the money lender is legitimate before proceeding. Here are some ways you can do that:
- All licensed money lenders must be registered with the Ministry of Law, and are listed on their website. Check that the lender is within the Ministry of Law’s Registry of Moneylenders list and that the lender’s physical office address and landline number are the same as the information listed
- Face-to-face verification is a mandatory step before licensed money lenders can process and approve your loan application. Visiting the lender’s registered place of business for loan contract signing and disbursement is a must
- Check that the lender has standardised caps on fees and interest rates that comply with the Ministry of Law’s guidelines
- Check that the lender limits your loan amount and requires you to sign an official loan contract
Read online reviews on the private lender to get a better sense of their legitimacy.
The loan process with licensed money lenders is often streamlined, fuss-free and efficient. To get your personal loan in Singapore with bad credit, follow these steps:
Firstly, visit the money lender’s website and fill up the loan application form. You can also apply directly at the money lender’s office. To get multiple loan quotes from top licensed money lenders in Singapore, simply fill out this online form on our website.
Next, wait for the loan officer to call. You will be invited to make an appointment to verify your identity and have your credit assessed at the licensed money lender’s registered business address. Be sure to bring all required documents. Your loan can then be approved on the spot in 20 minutes or less if all goes well.
Finally, sign your loan contract and get your loan disbursed on the spot in cash or via bank transfer. However, be sure to clarify all contract terms with the loan officer before signing.
No responsible or legal money lender will skip credit checks before offering loans. Doing their due diligence ensures that they do not allow the borrower to over-leverage; the borrower can only receive an appropriate loan amount befitting of his or her means to repay.
That being said, the silver lining is that licensed money lenders are a lot more lenient; they welcome borrowers with poor credit scores who aren’t able to obtain loans from traditional banks and financial institutions. Careful financial planning is also done to ensure that the payment plan is apt for the borrower’s financial situation.
Motivated to work on your credit score? Here’s how you can boost your credit score and up your chances of loan approval from major banks in Singapore.
Bottom line: Where to get a personal loan with bad credit?
You can get a personal loan with bad credit from a licensed money lender. It’s a legal source of loan that you can seriously consider if you’re in need of an urgent cash loan.
While licensed money lenders aren’t the traditional financial institutions everybody is familiar with, all legal money lenders in Singapore have to abide by rules and regulations, and be approved by the Ministry of Law.
Compared to banks, licensed money lenders typically charge higher interest rates and processing fees for personal loans. However, their services tend to be more streamlined and efficient, and accessible — loans are available to eligible borrowers regardless of your nationality. Depending on your income, you can expect to borrow up to 6X your monthly income.
In short, licensed money lenders are where to get a personal loan if you have bad credit. They can offer you the much-needed cash flow —despite your less than stellar credit records— while the same cannot be said for other traditional lenders that place heavy emphasis on only lending to folks with good or excellent credit.
Read this next: Singapore Personal Loan Comparison: Money Lenders vs Banks