What Are The Things You Need To Qualify For Personal Loans?

There are many advantages that come with taking a personal loan. One of such is that you can procure a personal loan without collateral, which is also known as an ‘unsecured’ personal loan. Generally, with unsecured personal loans, a higher interest rate follows. In comparison to secured loans, they can be an excellent option when you are in need of money urgently.

Although personal loans can come in handy, it does not mean that anyone can just walk into a bank or a lender’s office to borrow money. You must take note of the criteria you need to fulfil to be eligible for personal loans from Singapore reliable money lenders. Here are some of the things you need to qualify for a personal loan.

Your Age

To begin with, you are required to be between the ages of 21 to 65 to be eligible for personal loans in Singapore. To qualify for a personal loan, the minimum age limit is 21. While some borrowers have a maximum age cap, most lenders do not find the applicant’s age a problem so long as the individual is above 21.

Annual Income threshold

Most banks in Singapore will demand your bank’s statement of account. You’re required to have an annual minimum income of S$30,000. Other lenders might consider providing you with a loan for those with annual income below S$30,000 but at a higher interest rate.

If you’re a foreigner seeking to get a loan in Singapore, the minimum annual income is between S$40,000 and S$60,000. In many instances, the annual income requirement depends on the lender.

Formal Identification

Depending on the lender you approach, you would likely be requested to provide the following documents as a means of identification:

For salaried employees:

  • A copy of the National Registration Identity Card (NRIC)
  • Latest 3 months’ computerized payslips or latest 1 month Notice of Assessment or latest 6 months Central Provident Fund (CPF) statement

For self-employed individuals:

  • A copy of your National Registration Identity Card (NRIC)
  • The most recent 2 years’ Notice of Assessment

For foreigners:

  • Passport
  • At least 1-year validity Employment Pass (EP)
  • Latest 3 months’ computerized payslips OR recent Notice of Assessment OR latest 6 months Central Provident Fund (CPF) statement

Types Of Personal Loans Available In Singapore

Generally, there are four main types of personal loans available in Singapore. This includes;

  1. Secured personal loan: Secured personal loan requires collateral like a car or house. One of the advantages is that it allows you to repossess your assets and sell it to recoup losses in the event that you fail to repay your loan. It also has low-interest rates.
  2. Unsecured personal loan: No collateral is required but comes with likely fixed interest rate. Interest rate is often higher than those of a secured personal loan.
  3. Installment loan: Installment loan follows a set number of scheduled payments made overtime. It gives you more time to pay back, and you can build credibility from the lender with it.
  4. Payday loan: Payday loans are most ideal when you need to borrow smaller sums of money with repayment terms of between 2 to 4 weeks. Interest rates are quite high for this particular loan.

Lastly, you are more than likely going to come across a number of banks and moneylenders when you are in need of fast approval loans in Singapore. However, you must be cautious and be sure to approach only legal and licensed money lenders when applying for a personal loan.