Best Personal Loan for Low Income Earners in Singapore (2022)

Are you a low income earner? Here are some of the best personal loans you can apply for

It is a common misconception that borrowing money from a bank is a bad idea. If you borrow money wisely, it can be one of the best things you can do for your finances, especially if you are a low income earner.

But with so many loan providers in Singapore, picking the best one can be stressful. That is why we have done the hard work for you and came up with this list of the best personal loan for low income Singapore that you can apply for. Here, you can learn about different loan products that best fit your budget and needs.

Here at OMY Singapore, you will discover the following:

Personal Loans In Singapore

Because most personal loan for low income Singapore are unsecured, banks usually have a minimum income requirement to ensure that the loan will be paid back. After all, they will not be able to take away your possession as payment for it.

The minimum annual income for most personal loan Singapore options is usually S$30,000 for salaried employees. For foreigners, commission-based earners, and those who are self-employed, it can fall between S$40,000 to S$60,000.

But in reality, not everyone’s annual income can meet these requirements. Does that mean you should just give up and get a loan from an ah long?

Absolutely not.

The good news is there are tons of Singapore personal loan options for low income earners. Applying for a loan from a reputable institution is always a better choice than going for seemingly convenient unlicensed lenders that will charge you exorbitant interest rates.

What You Can Use Personal Loans For?

Personal Loan for Low Income Earners

Are you overwhelmed with your current bills? Or maybe the money you earned for this month just is not enough to cover your needs? If so, personal loans can get you out of trouble. Here are other expenses you can cover with your loan.

Medical emergencies

Dealing with medical emergencies is unavoidable, but personal loans can help you pay your bills partially or fully. This will help you get your finances in order until you get your next paycheck.

Vacation

Thanks to personal loans, you can finally get the chance to visit the place you have always wanted to go to. It can be a beach, a mountain, or an exotic location. Personal loans are truly an amazing option to help you see the world.

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Wedding

There is nothing more important than celebrating the most memorable day of your life, especially if you are ready to commit to someone. Wedding planning is tiring, but with personal loans, you can focus on planning this memorable day instead of getting stressed about your bills.

Home Renovation

Home improvement projects can be expensive, but with a personal loan, you can get all the materials you need without worrying about your cash on hand. This loan is also great to cover home emergencies such as plumbing problems.

Credit card payments

If you have several credit cards and your limit is already maxed out, you can use your personal loan to pay for expenses like grocery bills or petrol.

You can also use your loan to cover spiraling credit card bills since personal loan interest rates are better compared to credit cards.

Remember These Things Before Applying For A Personal Loan

Here are a few things you keep in mind to ensure you make the most out of your money.

Factor in the interest rate

When applying for personal loans, keep in mind that the advertised interest rates may not apply to you, especially if your income does not go above S$30,000. Banks also factor in your outstanding debts and credit rating when determining your interest rate. Considering this, expect to be charged higher than the published amount. This means that you may have to take care of more expensive instalment payments.

Think about your debt ratio

If you want to take out another loan in the future such as an auto or housing loan, you should check your TSDR or Total Debt Servicing Ratio. This refers to your monthly total debt payment that is capped at 55%. Considering this, your personal loan should not take up the majority of the 55% cap or you may have to wait until you pay back your personal loan to apply for another loan.

Only borrow what you need

If you can put your needs off for a while and wait until your salary increases, do so. But if not, only borrow what you can afford to pay back. Even if you can qualify for a bigger amount, do not be tempted to max it out. If you are unable to pay it back in time, you may end up in a worse situation since you have to take care of late repayment fees.

Consider your current bank

If you have an existing account with any bank, consider getting a loan from them. Banks usually have laxer requirements to their current clients, and this will help you get a better deal. You also do not have to worry about getting tons of documents to qualify for the loan.

Assess your credit score and check for errors

Before applying for a loan, ensure that you check your credit score. See if there are any errors in your credit report. Getting these errors corrected can help your financial health.

The Best Personal Loans In Singapore For You

Here is a look at some of the best personal loan Singapore you can apply for. We made sure to only include loans that have an eligibility requirement of at least S$20,000 minimum annual income.

Take a look at this personal loan comparison Singapore below to see how each loan measures up next to each other.

Loan Minimum income requirement Interest rate Loan tenure
Standard Chartered CashOne S$20,000 for Singaporeans and PRs S$60,000 to foreigners Starts at 3.48% per annum Up to 5 years
POSB Personal Loan S$20,000 for Singaporeans, PRs, and foreigners who already have a credit card or cashline with POSB Starts at 2.88% per annum Up to 5 years
OCBC ExtraCash Loan S$20,000 for Singaporeans and PRs S$40,000 for Foreigners 5.45% to 13.92% per annum Up to 5 years

Standard Chartered CashOne

Interest Starts at 3.48% per annum
Minimum income requirement S$20,000 for Singaporeans and PRs S$60,000 to foreigners
Loan tenure Up to 5 years
Perks Get up to 1.2% cashback + S$100 cashback for new clients

With a minimum income requirement of only S$20,000 a year, this personal loan for low income Singapore is one of the best options for you. One of the upsides of this loan is it offers quick cash disbursement in only 15 minutes, which makes it perfect for those who need cash urgently. This personal loan interest rate Singapore starts 3.48% per annum.

It is important to note that while this loan is worth considering by Singaporeans and PRs, it is not the wisest loan for Foreigners in Singapore since it has a S$60,000 minimum requirement for the said group. Your credit history also greatly affects your interest rate. For example, if you have a bad credit score, Standard Chartered may give you a higher interest rate since they will be taking on more risk.

Eligibility:

  • 21 to 65 years old
  • S$20,000 minimum annual income requirement
  • Singapore Employment Pass (for foreigners)

Apply here.

POSB Personal Loan

Interest Starts at 2.88% per annum
Minimum income requirement S$20,000
Loan tenure Up to 5 years
Perks Enjoy 2% cashback by using code “POSBPL” for loans amounts S$10,000 and above. Promo is valid until 30 September 2022.

This is another loan with friendly eligibility requirements. Everyone with a minimum annual income of at least S$20,000 can apply for this loan, although foreigners need to have a credit card or cashline with the bank to be eligible. This has the lowest interest rate personal loan Singapore at only 2.88% per annum plus a 1% processing fee. When you apply online, you will instantly get the cash in your account.

This lowest personal loan Singapore allows low income earners to borrow up to 4 times your monthly salary. Only those with an annual income of over S$120,000 can borrow up to 10 times their monthly salary. The tenure for this loan is between 1 to 5 years. Borrowers can also receive up to 2% cashback by using the code “POSBPL” for loans amounts S$10,000 and above. Promo is valid until 30 September 2022.

Eligibility:

  • 21 to 75 years old
  • S$20,000 minimum annual income requirement
  • Singapore or PR, and foreigners with existing credit card account and/or cashline

Apply here.

OCBC ExtraCash Loan

Interest 5.45% to 13.92% per annum
Minimum income requirement S$20,000 for Singaporeans and PRs S$40,000 for Foreigners
Loan tenure Up to 5 years
Perks n/a

Although it does not have the most affordable interest rates which start at 5.43% per annum, it is still worth considering for existing OCBC customers who already have an OCBC EasiCredit or credit card. The loan tenure for this loan is up to 5 years, and those whose annual income falls between S$20,000 to S$29,000 can get 2 times their monthly salary.

Repayments can easily be made through mobile banking or online funds transfer. You can also pay through a cash deposit machine or cheque deposit. It is worth noting that the S$20,000 minimum annual requirement is only for Singaporeans and PRs. Foreigners must have an annual income of at least S$45,000 to qualify for this loan.

Eligibility:

  • At least 21 years old
  • S$20,000 minimum annual income requirements for Singaporeans and PRs
  • S$40,000 minimum annual income requirements for Foreigners

Apply here.

Alternatives To Personal Loan For Low Income Earners

The Best Personal Loans In Singapore For You

If any of the personal loans listed above do not look appealing to you, here are some alternatives.

Credit card

You may use your credit card for a major purchase, or its cash advance option. However, keep in mind that it can get expensive due to the high interest rate. You can look for a credit card with current promotions such as a 0% annual percentage rate. Just be realistic since you cannot have a high credit limit if your income is low.

Secured loan

If you have any property, you can apply for a secured loan instead of an unsecured personal loan. Because there is collateral involved, these loans are less strict when it comes to minimum income requirements. Of course, you may lose your collateral if you are unable to pay your loan back.

Get a loan from a licensed moneylender

Getting a personal loan money lender Singapore is another great option for low income earners. These are organisations that have been approved by the Singapore government to offer short-term loans to the public.

Unlike ah longs, their terms are restricted so you will not be taken advantage of. While the interest rates are higher compared to banks, you can still get a good deal from them. This may also be an option for those looking for personal loans for students with no income. Check out our guide on licensed moneylenders in Singapore for more information.

Moreover, it is a viable choice when you are looking for fast cash loan in Singapore. For instance, your personal loan application can get approved in just minutes.

Frequently Asked Questions

Still got questions about personal loan for low income Singapore? We will answer them below.

Can I get a loan if my income is low?

Yes. There are banks in Singapore that offer loans for Singaporeans and PRs with an annual salary of S$20,000. Having a good credit score will help you get a loan with an improved interest rate.

Which bank provides a personal loan for those with low salaries?

POSB/DBS, Standard Chartered, and OCBC all have loans for low income earners. If your annual income is above S$30,000, you can apply for a personal loan in most banks.

Can I get a personal loan without income proof Singapore?

If you do not have income proof such as CPF contribution statements or payslips, you can take advantage of other documents to apply for a personal loan Singapore such as your employment contract or offer letter. Before applying for a personal loan without payslip Singapore, make sure to check if your preferred lender accepts these documents.

What is the easiest loan to get approved for?

If you are already an existing account holder of a certain bank, you have a higher chance of getting approved for a personal loan in that institution.

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