Which Loan Provider Offers the Lowest Loan Interest Rates

There are multiple factors to consider when looking for a personal loan that suits your needs. Starting from the lender of the loan, the loan interest rates, and meeting specific criteria set, it’s not always a walk in the park.

One of the essential features that you should note is the interest rates that your personal loan attracts. It’s important to know where you can find low-interest rates, loans, and everything you need to get approved. In this article, we have summarised a list of the best loan providers offering personal loans in Singapore.

Average Interest Rates in Singapore

Interest rates between banks and money lenders have a significant difference due to the level of risk that these two institutions are willing to take.

Generally speaking, bank rates for personal loans start at nearly 4% per YEAR (EIR from 7%) while moneylender interest rates range from 1-4% per month.

Understanding Personal Loan Interest Rates

Loan interest rates are dynamic. Personal loan interest rates are influenced by multiple factors that result in either high or low-interest rates. While comparing different personal loans in Singapore, you will notice two distinct interest rates for each loan. 

  • Advertised interest rates 

The Advertised Interest Rate, which is also the annual interest rate, is the rate used for advertising the loan. It’s shown in a larger font. This interest rate does not disclose important information such as the admin and processing fees.

  • Effective interest rates 

The effective interest rate must be displayed next to the advertised interest rate. This rate accounts for the extra costs such as processing fees and other charges and details of your repayment schedule. The Effective Interest Rate (EIR) is therefore the true interest rate for a loan.

  • 0% interest personal loans

Some banks offer a promotional 0% interest on personal short-term loans. The only catch for these loans is that they attract high processing fees. The bank, therefore, collects a high fee upfront, meaning that you still pay the bank for the loan.

Currently, the average effective interest rates that most banks are offering personal loans is around 7% p.a. However, the interest rate can be affected by your creditworthiness, loan amount, repayment terms, annual income, and the purpose of the personal loan.

Other Charges Incurred on Personal Loans

Depending on the lending company involved, personal loans may incur other charges such as:

  • Late payment fees

Of course, banks and moneylenders don’t want you to make your monthly payments late. Late payments are an indicator to lending institutions that a borrower is a potential defaulter. Late payments act as an incentive for borrowers to keep making payments. 

On top of your monthly interest rate, banks charge a penalty of 2.5% of the overdue amount or $60-$100 as a penalty. Moneylenders charge fees not exceeding $60 for every month of later prepayment. A moneylender may also charge a late interest on the monthly installment not paid.

  • Early payment/ prepayment penalty

Whenever you pay your personal loan earlier than the bank expected, the bank ends up earning less interest income from the loan. To make up for the loss of interest income, the banks, therefore, charge a prepayment penalty that can range from 2.5% to 3% of the redemption amount, or a fixed fee of between $100- $250. Moneylenders, on the other hand, don’t charge early repayment fees. 

  • Annual fees

Some banks may charge an annual fee for maintaining your credit facilities with the bank. Personal loans such as credit lines may attract an annual fee to maintain the credit facilities.

  • Processing fees

Processing fees are the main hidden cost on a personal loan that you should consider carefully. Loan processing fees are a percentage of the loan and are usually deducted from the principal loan awarded. While a loanee may not consider processing fees, it’s important to consider personal loans that have minimal processing fees. The usual processing fee is 1% for banks.  Moneylenders also charge a fee not exceeding 10% of the principal upon release of the loan. 

  • Change of tenure

It’s important to carefully consider the repayment period of your personal loan. While short loan tenures can result in high monthly installments, long repayment periods will spread your monthly installments. However, it’s important to note that the longer the loan repayment period, the higher the interest amount you end up paying. While banks may offer loans for tenures ranging between 1-7 years, moneylenders have a relatively short repayment period of 6-12 months.

Which Bank Is Best for Personal Loans?

Personal loan agreement
Various factors come into play when considering the best bank for personal loans. Factors such as low-interest rates, quick approval, income eligibility, and loan tenure influence your choice. Also, banks may have promotions and incentives that may favorably influence your choice, in comparison to the metrics involved in considering your personal loan.


Loan amount: HSBC offers a loan minimum of $5,000 and a maximum of up to 4 times your monthly income. Individuals with annual income exceeding $120,000 can borrow up to 8x your monthly salary or a maximum of $200,000.

Interest rate: Annual interest rate  of 3.7% p.a, Effective Interest 7.0% p.a

Repayment period: The loan repayment period ranges between 1-7 years

2. Standard Chartered CashOne Personal Loan

Amount: Minimum loan amount is $1,000 and a maximum of up to 4x your monthly income capped at $250,000.

Interest Rate: Flat interest rate of 3.48% annual interest rate p.a, and 6.95% effective interest rate p.a

Repayment period: The loan repayment tenure is between 1-5 years.

This loan attracts an annual fee of $199.

3. CIMB Bank

Loan Amount: Minimum loan amount of $1,000 and a maximum of up to 90% of the credit limit

Interest Rate: CIMB Cashlite personal loan is the cheapest personal loan with the lowest interest of 3.50% AIR and a 6.8% EIR.

Repayment period: This loan is only available to new CIMB customers and the maximum loan repayment tenure is 3 years.

4. DBS/POSB Personal loan

Loan Amount: Minimum of $500 and up to 4x your monthly salary. With an annual income exceeding $120,000 you can access a personal loan up to 10x your monthly income. 

Interest Rate: The annual interest rate is 3.88% and the effective interest rate is 7.56%.

Repayment period: The loan repayment period is between 1-5 years

DBS/POSB personal loans have a 1% processing fee.

5. OCBC Personal Loan: 

Loan amount: OCBC personal loan allows you to borrow a minimum of $1,000 and up to 6x times your monthly salary for income exceeding $120,000. For people with income between $20,000- $120,000, you can borrow up to 4x your monthly income.  

Interest rate: Annual interest rate 3.5% p.a, Effective interest rate 7.27% p.a

Repayment period: The loan repayment period is from 1-5 years

6. Citi Quick Cash Loan

Loan Amount: Minimum loan amount is $1,000 and a maximum amount of up to 4x your monthly salary.

Interest rate: The Annual interest rate for Citi Quick Cash Loan is 3.99% p.a and the effective interest rate is 7.5% p.a. 

Repayment period: The repayment period ranges between 2 years to 5 years

7. UOB

Amount: UOB loans start from $10,000

Interest Rate: Flat interest rates of 4.25% annual interest rates p.a, and 7.96% effective interest rate p.a.

Repayment period: Minimum repayment period is 1 year, and the maximum tenure is 5 years.

UOB personal loans attract a $100 late payment fee. You also pay a full repayment penalty of $150 or 3% of the outstanding loan amount

Other Loan Options

  • Loans from family

Rather than opting for loans from lending banks and moneylenders, you may opt to approach family members for a personal loan. This could be helpful especially if you don’t want to incur the cost of having to pay for loan interests and other loan charges.

For a successful loan request from your family, you may need to be honest about your goals and plans, and reassure them that you can pay them back.

  • Government assistance schemes

Government assistance schemes such as ComCare are part of Singapore’s Ministry of Social and Family Development (MSF). This scheme provides long-term assistance to people who are unemployed and who need help in supporting themselves.

  • Moneylenders

Licensed moneylenders are often the best bet if you need a personal loan urgently. Moneylenders are quick in processing your loan requests, and their requirements such as citizenship, credit history, and average income are flexible. Loans from moneylenders also have fast approval. If you meet their requirements, some can approve personal loans within an hour. 

Remember that moneylenders are regulated by the government and are not allowed to charge more than 4% per month interest rates.

Ensure that you do not conduct any transactions with unlicensed money lenders and loan sharks. Unlicensed moneylenders are considered dangerous as they employ unregulated harassment techniques to chase debt. It’s considered illegal to deal with loan sharks and unlicensed moneylenders as they do not have a clear source of their funds.

Visit the Registry of Moneylenders on the Ministry of Law Website to see the full list of the licensed moneylenders.

  • Pawnshops

Pawnshops can help you get some money by trading your valuables for cash. By pledging your item, a pawnshop will give you 60%-80% of the original value of the item. The pawnshop issues a receipt, which you will use to reclaim your valuables once you repay the money. However, if you are not able to return the money within the given 6 months time frame the pawnshop auctions your valuables to regain their money.

How to Choose the Right Personal Loans

Personal loans are easy to acquire as they do not need any form of security guarantee. 

Some of the reasons why people take personal loans include: 

  • Taking care of family expenses such as weddings and social functions
  • Paying off credit card debt
  • Buying high-end home appliances
  • Funding vacations
  • Debt consolidation
  • Emergency situations

Learn more: 10 Expenses You Can Finance With a Personal Loan

Here are some of the things you should consider when choosing a personal loan:

  • Compare loan interest rates

Different lending companies offer loans at different interest rates. Ensure that you go for lending companies with the lowest interest rates. Conducting prior research before approaching lenders can help you compare interest rates between different personal loans.

Loan comparison sites such as Moneylender Review are a great start to identifying personal loan interest rates that lending companies offer.

  • Compare Extra Charges and Fees

While interest rates are the major point of consideration, ensure that you identify all other charges and fees that come with a loan product of choice. Compare fees that different banks charge for personal loans. Some of the extra charges and fees to consider include processing fees, early and late repayment penalties, annual fees, service tax, loan cancellation charges, among others.

  • Repayment Options

Ensure that your lenders provide flexible repayment options in case you need to accelerate your loan repayment process. Ensure that the monthly repayment rates are affordable. Personal loans that have flexible payment options can help you reduce the overall interest you pay for your loan.

With flexible payment plans, you don’t have to incur extra payment penalties that increase your principal payment. 

  • Other loan options

If you have access to other loan options that are easy to manage, consider exploring them. Friends and family can come in handy with personal loans and you won’t have to worry about high-interest rates.

  • Ensure that you plan ahead

Before you make plans for getting a personal loan, ensure that you plan accordingly. Planning ahead ensures that you have a clear strategy on how you will repay your debt.

Once you obtain a loan, your credit score will be at stake. You need to ensure that you maintain a healthy financial state without ruining your credit score.

  • Manage the loan wisely

Make sure that your personal loan is utilized efficiently in accomplishing its main purpose. Budget wisely for your loan and only borrow manageable loans that you can repay comfortably.

Choose repayment schedules that you can commit to and comfortably service without severely straining other financial needs. 

Other Things You  Need to Know

  • What is a good interest rate on a personal loan?

In general, a good interest rate for a personal loan is one that is below the national average, which is 7%. However, the interest rate of the personal loan you apply for shall be affected by factors such as your debt-to-income ratio, your creditworthiness, the purpose of the loan, and the loan amount.

  • What is the interest rate on a $30,000 loan?

The true interest rate for a $30,000 loan with a loan repayment period of 3 years ranges between 6.5% to 9.46% p.a. Total amount payable to your lender will range between $33,060 to $34,230 inclusive of other extra fees charged.

  • What is the interest rate on a $10,000 loan?

The true interest rate on a $10,000 personal loan with an average loan tenure of 3 years ranges between 6.5% p.a to 9.46% p.a. The total amount repaid to the bank will range between $11,164 to $11,410 depending on the interest rates and excluding other fees charged on the personal loan

  • Which bank is offering the lowest interest rate?

HSBC offers the lowest interest rates for personal loans at 3.5% AIR and 6.5% EIR p.a. HSBC does not charge any processing fees, and the maximum loan repayment tenure is up to 7 years. For a $30, 000 loan and repayment period of 3 years, you will need to pay installments of $918 per month. For a $10,000 loan with a similar repayment period, the monthly installments stand at $306.

  • What do you need to apply for a personal loan?

To apply for a personal loan in Singapore, you must be between ages 21-65 years, and with proof of annual income. Most banks require a minimum of $30,000 annual income, while other banks may choose to charge high-interest rates for people with an annual income lower than $30,000. The minimum requirement for foreigners is $40,000- $60,000.

You must also provide;

  • Proof of identity; Singapore identification card or an E pass and passport for foreigners
  • Proof of address using documents that show your residential address (utility bills indicating your name and address.
  • Proof of income for the last 12 months using a computerized payslip, or the latest income tax notice of assessment 

Moneylender Loan application requirements

  • Proof of income dating back to 3 months prior to the date of a loan application, payslips, employment letter, and tax income statements
  • Proof of residence provided through tenancy agreement, street address, and utility bills
  • Proof of identity through a personal identification number for citizens or passport and employment pass for foreigners
  • Is a personal loan right for you?

Take time to consider if a personal loan is the best option for you. Be sure that you can repay the loan back as defaulting on personal loans is detrimental to your credit score.

Consider other options of borrowing such as approaching friends and family or other alternative loans from your bank. A personal loan can help you consolidate debt, which helps in managing your process of getting out of debt.

Ensure that your monthly repayment installments are manageable. Staggering your repayment installments throughout your tenure can help you get out of debt comfortably without draining other parts of your life.


It’s important to do thorough research and compare between different banks while going for a personal loan. Different banks package their products differently and research may save you some peace of mind and hundreds of dollars.

However, it’s also important to note that personal loans are quite expensive compared to other types of loans and should only be taken if necessary. Since they are unsecured loans that do not need any collateral, personal loans offer convenience and a quick solution for everyone in need of cash. 

If you are eager to learn more about making better financial decisions in the future, we are willing to help you find the right and relevant information. Moneylender Review can help you find the perfect personal loans for your needs. 

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