Personal loans are one of the most diverse loans because they can customarily be spent on whatever you want. Like any loan, it is a lump sum from the bank or a lender, that a borrower applies for with the expectation that it will be repaid in fixed payments over the duration of the loan tenure, usually from one to five years. Personal loans can be secured, where the borrower supplies collateral, or unsecured, where approval is solely based on the borrower’s creditworthiness to pay it back. When taking out a personal loan, you would obviously want the lowest possible interest rate. Here are our recommendations.
In our investigation, we took the median Singaporean household income of S$8,846 or an annual income of S$105,600. This household wants to borrow S$20,000 with a loan tenure of 3 years. With these numbers, our example family has a debt-to-income ratio, or DTI, of 7%. Remember, the lower the ratio or percentage (up to 35%) demonstrates to lenders that you are fiscally responsible.
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HSBC Personal Loan
The HSBC Personal Loan has interest rates starting at 3.7% p.a. They advertise fixed monthly repayments for a loan amount of up to eight times your monthly income. You can choose your loan tenure from one to seven years and even get 1-minute approval! If you apply online, you will also receive S$88 cash back and HSBC will waive the customary S$88 processing fee.
With the lowest interest rate offer, the monthly repayment is S$618. At the end of the 3-year loan tenure, you would have paid S$2,248 in interest. Your total amount payable would be S$22,248. A few things to note that there is a prepayment fee of 2.5% of the redemption amount as well as a late payment fee of S$75.
DBS Personal Loan
The DBS Personal Loan has interest rates starting at 3.88% p.a. They advertise a fixed affordable repayment plan with interest rates as low as 3.88% p.a with cash up to four times your monthly salary. If your annual income is S$120,000 and above, you can borrow up to ten times your annual income. However, don’t let the 3.88% p.a. number fool you because they tack on a 1% processing fee. The loan tenures range from one to five years. When you apply online and get approved, you will get instant cash in your account. The current promotion is up to S$1,000 administrative fee waiver and a S$120 NTUC voucher.
With the lowest interest rate offer, the monthly repayment is S$629, including the processing fee. At the end of the 3-year loan tenure, you would have paid S$2,644 in interest. Your total amount payable would be S$22,644. A few things to note that there is a flat prepayment fee of S$250 as well as a late payment fee starting at S$100.
Standard Chartered Cash One Personal Loan
The Standard Chartered Cash One Personal Loan is ideal for individuals with lower annual salaries. It is an unsecured personal installment loan on your credit card with a very generous welcome offer. It advertises cash on the next working day and up to S$2,088 cashback upon loan approval. Additionally, if you apply online, you will receive an additional S$50 flashback and S$199 credit to offset the first year’s annual fee. For borrowers with an annual income of $$30,000 and above, you can borrow up to four times your monthly income. The loan tenures are from one to five years with an interest rate of 3.88% p.a.
With the lowest interest rate offer, the monthly repayment is S$623. At the end of the 3-year loan tenure, you would have paid S$2,428 in interest. Your total amount payable would be $22,428. A few things to note that there is an early prepayment fee of S$250 or 3% of the outstanding principal, whichever is higher. Additionally, this loan has an annual fee of S$199, which is deducted from the loan amount for the first year. S$50 of the annual fee is waived if all payment is received by the payment due date for the past 12 months. If you default interest, or your payment is not received by the due date twice within 6 consecutive months, 4% p.a. will be added to your original interest rate and applied to the outstanding balance. The loan tenure will then be adjusted so that your monthly payments stay the same. And finally, there is a late payment penalty of $80, as well as daily finance charges will be added. There are a lot of fees associated with this kind of loan. This is reasonably expected since the loan is tied to your Standard Chartered Credit Card. This personal loan is ideal for low annual salaries but needs a serious borrower who is on top of their repayments to avoid all the penalties.
Citibank Personal Loan
The Citibank Personal Loan is similar to the Standard Chartered Cash One Personal Loan because it also converts your credit card limit into a personal line of credit. You can enjoy flexible repayment options ranging from 12 to 60 months. The minimum loan amount is S$1,000. New customers get a better interest rate offer than current customers with Citibank. For our example, the interest rate is 4.55% p.a. The Citibank Ready Credit Card is required for this loan. Currently, there are no welcome offers or promotions.
With the lowest interest rate offer, the monthly repayment is S$632. At the end of the 3-year loan tenure, you would have paid S$2,752 in interest. Your total amount payable would be S$22,752. A few things to note that there is a cancelation fee of S$100 or 3% of the outstanding principal amount, whichever is higher.
The HSBC Personal Loan has a better interest rate than the DBS Personal Loan, but the DBS Personal Loan has a better repayment penalty than the HSBC Personal Loan. The Citibank Personal Loan had the highest interest rate but is simpler and less punishing than the Standard Chartered Cash One Personal Loan. On the other hand, the Standard Chartered Cash One Personal Loan had a very generous welcome offer. When deciding a personal loan, look past the monthly repayment and the interest rate. Always read the terms and conditions to find which personal loan is perfect for your situation.