A personal loan can serve many purposes, especially when you’re in a desperate situation where you need access to immediate cash. But what if you need a personal loan but have no proof of income? Well, the fact of the matter is that in Singapore, getting a personal loan from banks or money lenders requires standard proof of income from borrowers. If you aren’t able to produce any proof of consistent income, you stand no chance of getting your hands on a personal loan from legal loan providers in Singapore.
That being said, there’s a workaround that allows personal loans to be given to eligible unemployed people (e.g. an unemployed housewife) in Singapore — borrowing from an alternative legal loan provider, a licensed money lender.
Read on as we deep dive into this intriguing topic.
Do banks offer personal loans without income proof in Singapore?
Our local banks do not offer personal loans without income proof as they are regulated by the Monetary Authority of Singapore (MAS).
Just so you know, banks only approve and disburse personal loans if you can meet the minimum annual salary which they have set (more on this later), and are assessed to be a suitable personal loan candidate.
What documents do banks need in order to process personal loan applications?
Solid income proof
Unconventional income proof doesn’t cut it. Banks require borrowers to be gainfully employed and have the ability to furnish documentation such as:
- Latest 12 months’ CPF Contribution History Statement
- Latest 3 months’ Computerised Payslip (in Singapore Dollar currency)
- Latest Income Tax Notice of Assessment (NOA)
- Company Letter certifying Employment and Monthly Salary (in Singapore Dollar currency) dated within 3 months
Frankly, it’s wishful thinking to hope for a major bank to offer personal loans for the unemployed in Singapore.
Proof of Identity
Singaporeans and Permanent Residents: NRIC
Foreigners: (1) Passport; (2) Valid Work Pass (at least 6 months’ validity)
Proof of Residence
This includes tenancy or rental agreement, utility bill, phone bill or any other bill/statement stating your residential address.
What’s the minimum income requirement for personal loans from banks in Singapore?
Most banks in Singapore require Singaporean and Permanent Resident applicants to have an annual income of at least $30,000. Some banks have a minimum income requirement of only $20,000.
There are personal loans for foreigners in Singapore but the minimum annual income requirement is higher, some banks require at least $40,000 while others require as much as $60,000.
Can an unemployed person get a loan in Singapore?
This may surprise you but an unemployed person can get a personal loan in Singapore. However, you still need some proof of steady income in order to convince the lender that you’ll be able to repay the loan.
Luckily, some licensed money lenders are willing to provide personal loans for the unemployed in Singapore who are able to furnish proof of income via the following channels:
1. Rental income
It is usually paid via internet bank transfer and reflected in your bank statements. Another way to prove rental income is through your Income Tax Notice of Assessment (NOA).
2. Alimony
Whether you’re an unemployed housewife with a part-time job or a ‘full-time’ job looking after your home — either way, you are able to utilize your regular alimony payments to obtain a personal loan. These payments will be reflected in your bank statements. Some licensed money lenders may also ask for court documents to prove the validity of these payments.
3. Foreign income
Any foreign income earned overseas will be taxed when it is remitted to Singapore. This income will be reflected in your Income Tax Notice of Assessment (NOA).
4. Annuities
It can be paid out monthly, quarterly, half-yearly or yearly based on your policy. These payments will be reflected in your bank statements.
5. Retirement payouts
Your retirement payouts are most likely paid out to you monthly since they are typically used for living expenses. These will be reflected in your bank statements.
How much can an unemployed individual borrow on their personal loan?
Although licensed money lenders in Singapore are able to provide personal loans for the unemployed in Singapore, there are some limitations worth considering.
For starters, the loan amount is limited. Any eligible individual can get a loan of up to 6 times their monthly income if their ‘annual income’ is at least $20,000.
Take note that this limit applies across licensed money lenders at any point in time.
| Borrower’s Annual Salary | Singaporean Citizens and Permanent Residents | Foreigners residing in Singapore |
| Less than $10,000 | $3,000 | $500 |
| At least $10,000 and less than $20,000 | $3,000 | |
| At least $20,000 | 6 times monthly income | |
For a better understanding of what to expect from money lenders, it’s best to read up on reliable sources or even speak to a licensed money lender directly.
What to know about personal loans from licensed money lenders
Interest rates
According to the Ministry of Law, the maximum interest rate that licensed money lenders are allowed to charge is 4% per month. This is much higher compared to banks’ interest rates, which usually hover around an advertised interest rate of 2.99% to 5.43% per annum.
Processing fees
Their processing fees cannot exceed 10% of the principal loan amount. To put things into perspective, most banks charge a processing fee of 1% to 3% of the approved loan amount.
Loan tenure
Licensed money lenders provide a short repayment period that’s usually between 3 and 12 months. On the flip side, banks typically offer loan tenures of up to 5 years, with some even offering loan tenures of up to 7 years.
Conclusion
It would be much easier to get a personal loan without standard income proof in Singapore from licensed money lenders rather than banks and financial institutions as they are more lenient with their requirements.
Another advantage is the licensed money lenders’ ability to tailor their loan products for each individual according to their repayment capability.
