The Top 5 Singapore Personal Loans with the Lowest Interest Rates (2022)

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Your best option is definitely a personal loan if you need money urgently but are too poor to borrow from relatives and friends.

A personal loan allows you to borrow money from a bank or other financial organization and repay it over the course of predetermined payments. However, there is usually a minimum income requirement and a credit history check by the bank.

Still, getting a personal loan rather than one from a moneylender is typically considerably cheaper and safer. Here are the loans in Singapore with the lowest interest rates at the moment.

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Best personal loans in Singapore (2022)

Here are the starting interest rates being offered by Singapore’s most well-known personal loan companies right now. We’ll use the case of a Singaporean who makes $2,500 per month and wants to borrow $10,000 to repay over the course of two years.

OCBC’s ExtraCash personal loan, which carries an interest rate of up to 5.42% (EIR: 12.11%) and requires a $462 monthly payment plus a $100 processing fee, is not included in this table.

What do the terms “interest rate,” “EIR,” and “processing fees” mean?

There is a lot of lingo in this, so let’s go over some potential questions.

Interest rates: Did you notice a lot of terms beginning with “from X%”? That’s because personal loans are fairly flexible since they all depend on (a) your personal situation, (b) the amount you want to borrow, and (c) the length of the loan. You typically won’t see the final interest rate until after your application is approved because banks frequently personalize your interest rate when you submit an application.

EIR: EIR, which stands for effective interest rate, is a more accurate representation of the cost of borrowing because it also accounts for additional costs (such as the processing charge; see the following point) and the timeframe for loan payback.

Processing fee: It is important to note that this is the biggest unavoidable expense of personal loans. The processing fee is subtracted from the loan’s principal, so if you borrow $10,000 but pay a $100 processing fee (or 1% of it), you will only receive $9,900 in cash. Although you as the borrower may not “feel” it, it does deplete your funds and raise the cost of borrowing.

Let’s now go over the 5 personal loan packages that were highlighted.

1. HSBC Personal Loan

Singaporeans and Permanent Residents with an annual income of at least $30,000 are eligible for an HSBC personal loan. In fact, provided you meet the requirements, HSBC now has some of the lowest interest rates available.

The bank is now promoting special interest rates with no processing fees starting at 3.2%, which equates to an EIR of 6%. However, keep in mind that individual interest rates will differ. There are loan terms available from 1 to 7 years.

On the downside, processing applications for larger loans (say, $100,000 and beyond) may take some time, maybe longer than a week, although smaller loans can get authorized rather quickly. However, the cheap interest rates make it worthwhile to wait if you can.

2. UOB Personal Loan

Only current UOB credit card or CashPlus customers who are Singaporeans or PRs between the ages of 21 and 65 are eligible for a personal loan from UOB. Additionally, you must bring in at least $30,000 annually. You can still apply for this UOB Personal Loan if you are not already a customer of UOB. but, you’ll also need to purchase a UOB credit card or CashPlus.

While EIR ranges from 6.22% to 6.42%, the flat interest rate is set at 3.4%. Loan terms range from one to five years, with three years being the longest EIR.

When you apply for a personal loan online and are an existing UOB customer, your application will be instantly approved.

If you’re in urgent need of money, but too paiseh to borrow from your family and friends, your best bet is probably a personal loan.

With a personal loan, you borrow cash from a bank or financial institution and pay them back in fixed instalments over an agreed period. But you’d typically need to meet a minimum income requirement and the bank will check your credit history.

Still, it’s generally much cheaper and safer to get a personal loan rather than a moneylender. Here’s a look at the loans with the lowest interest rates in Singapore right now.

Best personal loans in Singapore (2022)

Here are the current starting interest rates on offer by the most popular personal loan providers in Singapore. We’ll use the example of a Singapore citizen earning $2,500 a month, who wants to borrow $10,000 and repay it over 2 years.

Personal loanInterest rateProcessing feeMonthly repayment
HSBC Personal Loan3.2% (EIR: 6%)None$443
UOB Personal Loan3.4% (EIR 6.4%)0%$445
Standard Chartered CashOne3.84% (EIR: 8.64%)None$446
Citibank Quick Cash (New Customers)3.46% (EIR: 6.5%)None$446
DBS/ POSB Personal Loan3.88% (EIR 8.2%)$100$449

Not mentioned in this table is OCBC’s ExtraCash personal loan which brings you up to 5.42% interest rate (EIR 12.11%) amounting to $462 monthly repayment with a $100 processing fee.

What do interest rate, EIR and processing fees mean?

There’s quite a bit of jargon here, so let’s go through some questions that may have come up.

Interest rates: Notice a whole bunch of interest rates along the lines of “from X%”? That’s because personal loans are pretty dynamic as all depend on (a) who you are, (b) how much you want to borrow and (c) for how long. Banks often personalise your interest rate when you submit an application, so, typically, you’ll see the final interest rate only after your application is approved.

EIR: EIR stands for Effective Interest Rate, and it is a more accurate reflection of the cost of borrowing because it also takes into consideration the other fees (like processing fee; see next point) and loan repayment schedule.

Processing fee: This is the main hidden cost of personal loans and is worth highlighting. The processing fee is deducted from the principal, meaning, for a $10,000 loan with a $100 (or 1%) processing fee, you get only $9,900 in cash. As a borrower, you might not “feel” it, but it does eat into your funds and increase the cost of borrowing.

Now, let’s walk through the 5 personal loan packages highlighted.

1. HSBC Personal Loans

HSBC’s personal loan is open to Singaporeans and PRs with an annual income of $30,000 and above. If you qualify for it, HSBC actually offers some of the most competitive interest rates at the moment.

The bank is currently advertising promotional interest rates starting from 3.2%, which works out to an EIR of 6%, and zero processing fees. Remember, however, that actual interest rates will vary from person to person. Loan tenures ranging from 1 to 7 years are available.

On the downside, while smaller loans can get approved quite quickly, processing of applications for bigger loans (say, $100,000 and over) might take some time, possibly more than a week. Still, if you can wait, it’s worth it for the low-interest rates.

2. UOB Personal Loan

Enjoy a low-interest rate of 3.4% p.a. (EIR from 6.36% p.a.) AND up to S$3,288 Cashback from UOB when you apply for a minimum loan amount of S$10,000 with a minimum tenure of 24 months.  T&Cs apply.

UOB’s personal loan is only open to existing UOB credit card or CashPlus customers who are Singaporeans, and PRs aged 21 to 65. You’ll also need to earn at least $30,000 a year. If you’re not an existing UOB customer, you’ll still be able to apply for this UOB Personal Loan… but you’ll have to get a UOB credit card or CashPlus along with it.

The flat interest rate is fixed at 3.4% while EIR ranges from 6.22% to 6.42%. Loan tenures stretch from 1 to 5 years, with the highest EIR at 3 years.

If you’re an existing UOB customer, you can get instant approval when you apply for your personal loan online.

3. Standard Chartered CashOne

Standard Chartered CashOne personal loan is open to Singapore Citizens, PRs and foreigners with a Singapore Employment Pass aged 21 to 65. The minimum annual income requirements are $20,000 for Singaporeans and PRs and $60,000 for foreigners.

You can apply for this personal loan online by signing in through SingPass and receiving your loan disbursement within 15 minutes. There’s no need to be an existing Standard Chartered customer to get this personal loan.

So, it’s fast, but is it also cheap? Standard Chartered charges an initial annual fee of $199 (deducted from your approved loan). From the second year onwards, you won’t have to pay any more processing fees — UNLESS you miss any installments, in which case you will pay $50 for that year.

CashOne is more advantageous if you’re taking out a large loan because of the $199 cost. You would be required to pay a fee equal to 1.99% of the principal amount on a $10,000 loan.

Advertised interest rates start at 3.48%, which equates to an EIR of 10.4% and higher. Since interest rates vary from person to person, yours may not be exactly like this one.

4. Citibank Quick Cash (New Customers)

Customers who are absolutely new to Citibank loans are the only ones who can get this 3.46% Citibank Quick Cash. If you already have a loan from Citibank, Quick Cash will offer you one at 4.82% interest for $457 a month.

You can get the money you need right away by logging into the Citi Mobile App and entering the amount.

Singapore Citizens and PRs between the ages of 21 and 65 who earn at least $30,000 per year are eligible for the loan. If you are already a customer of Citibank, you need not worry about these requirements because Citibank has already thoroughly vetted you.

With a shorter 1-year term, Citibank’s personal loan is available to you at 0% interest. BUT, and this is a BIG BUT, there is a substantial processing fee of 3.5% that you must pay. Your 1-year loan will therefore cost you 7.06% in effective interest rate (EIR), even with the 0% interest rate.

You will pay an EIR of 6.5% and interest rates of 3.48% per year, with no processing fees, if you decide to extend the repayment period of your loan for up to 5 years.

Nevertheless, don’t believe us when we say it. Since rates are individualized, what you receive might differ slightly from the aforementioned examples.

5. DBS/ POSB Personal Loan

The personal loan from DBS is only available to current DBS clients. You can receive the money dispensed right away if you already have a DBS Cashline, a DBS credit card, or you currently deposit your income into a DBS or POSB deposit account.

Foreigners having DBS Cashline or credit card accounts are eligible for the loan, along with Singaporeans and Permanent Residents. One of the banks’ lowest income requirements is a minimum annual income of $20,000 and you must be between the ages of 21 and 75.

With DBS’s personal loan, interest rates as low as 2.88% are promised. The lowest possible EIR is 5.79% after a processing fee of 1%. There are loan terms ranging from one to five years.

What does it all mean when comparing the interest rate and effective interest rate (EIR)?

You can typically find two percentages on personal loans from banks. On their marketing materials, the lowest one will be the annual interest rate and will be written in a large font, such as “Personal loan at just 5% p.a.!” You should be able to spot a faint gray lettering that reads “(EIR: 12.5%)” somewhere nearby. The greater effective interest rate, or EIR, is that.

Calculating the annual interest rate is simple. You must pay the bank $500 in interest if you borrow $10,000 for a year at 5% annual interest. If you borrow it for two years, the interest will cost you $1,000 ($500 x two years). so forth.

The calculation of EIR (effective interest rate), which also accounts for any processing fees (such as 2% of the loan), is much more difficult.

For instance, if you borrow $10,000 and pay it back in full after a year, you’ll have $10,000 to play with throughout that time. The entire year will be “rich” for you. However, if you must pay back your $10,000 in monthly installments, you will start out rich before becoming progressively poorer as the amount of money decreases after the first month. The EIR of the first loan is lower than that of the second loan, other things being equal.

It also considers how much of your monthly loan payment is used to repay the money you borrowed and how much is used to cover interest.

Which personal loan should you opt for?

The HSBC Personal Loan is a fantastic choice if all you’re looking for is the lowest rate on a personal loan. Having said that, you might wish to compare what the other banks are willing to offer you if you aren’t given the lowest advertised interest rates.

The quickest options are Standard Chartered CashOne and DBS Personal Loan (for current DBS clients) if you need the money right now.

And Friday Finance is your best option if your profile makes it difficult to get a bank loan (for example, if you’re self-employed and lack income documents for the last two years). Just make sure to pay off the loan as quickly as you can to save money on interest.

Whatever personal loan package you choose, opt for the smallest loan amount and shortest term you can comfortably manage. This would keep your interest payments to a minimum.

Term loan vs credit line — which should you choose?

You may have run across a variety of loan types while looking for personal loans, some of which don’t seem to fit the bill for what we’ve just discussed.

Only term personal loans, in which you borrow a set amount with a set repayment schedule that you agree to before you receive the money, are included on MoneySmart.

These loans are typically recommended by us due to their much cheaper interest rates. You can repay over time at a pace that works for your financial situation.

A personal line of credit, often known as a credit line, revolving loan, or even “flexible payback loan,” is another product that many banks provide.

You can withdraw this pre-approved sum of money in full or in part, but you must pay it back immediately to avoid facing penalties.

Nowadays, the majority of banks base their personal loans either on your credit card limit or personal line of credit. Therefore, to qualify for the loan, you will need either a credit card or credit line. Even though it has a defined payback schedule, it is still regarded as a term loan.

But before you join up, be aware that since you would have essentially “spent” your credit on a cash loan, your credit cards with this bank will be as good as dead.

Being in debt is not fun…

However, it can be avoided. If you have to, take out a loan and focus all of your efforts on repaying it. Reexamine your income and spending plan in the interim, keeping track of everything you spend money on, to prevent having to take out loans in the future.

Ideally, you should create a budget that allows you the flexibility to save money for the future without going hungry.

Additionally, you should accumulate an emergency fund that can cover a few months’ worth of expenses so that you can draw on it in the event of unforeseen expenses rather than incurring debt.

Knowing the different types of insurance you require is also a good idea. At the very least, we advise getting hospitalization insurance, and if you have dependents, life insurance. Having enough insurance protects you from being saddled with astronomical costs in the event of the unexpected.

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John Hopkins is Editor at Admire, his One of the original CB crew, John joined the team back in 2013 after moving from her role as a staff writer on Design World. Since then he's written regularly for other creative publications.

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