hand calculating monthly installment loan payment

Monthly Installment Loans: What is It and Where to Apply

What is a Monthly Installment Loan?

A monthly installment loan involves receiving a whole lump sum loan, which will be paid through several installments. It can be a secured or unsecured loan, with the secured type requiring assets as collateral. 

Because it is due monthly, the repayment stays the same throughout the loan term, making it easy for the borrower to make the installment payments.

In a nutshell , the benefits of installment loans include flexible terms and lower interest rates, while the downsides include the risk of default and loss of collateral.

Types of Monthly Loans

Some of the most common types of an monthly installment loans are the following:

1. Home Loans / Mortgage

Home loans, or mortgages, give a financing option for you to be able to pay for the residential property that you want to buy. 

Eligible properties in Singapore include HDB flats, private properties that are already finished with the construction, and private properties that are still ongoing with construction. 

Before taking up a housing loan, determine both the house price and the approved amount you will borrow.

2. Car Loans

A car or auto loan is used for purchasing a brand new or used vehicle. The maximum loan amount for vehicles in Singapore less than $20,000 is 60% of the purchase price, while the maximum amount for vehicles over $20,000 is 50% only. The loan tenure limit is at 5 years.

3. Student Loan/Education Loans

An education loan can be used by students to pay for education and living expenses. Some student loans in Singapore offer 20%-25% tuition subsidies, with offers for annual stipends of $3,600 or more. 

4. Personal Loans

A personal loan is a type of unsecured loan. Moneylenders’ maximum loan amount ranges up to 6x your monthly income. If you are a Singapore resident, then you need an income of at least $2,000 per month to be eligible for a personal loan. If you are a foreigner, your monthly income must be at least $3,000.

5. Renovation Loans

Renovation loans are used to repair or remodel a property. The loan amount generally ranges from $10,000 to $30, 000, with a loan tenure range of 1-5 years. Different banks in Singapore offer varying interest that ranges from 3% to 6% yearly. 

There are also some banks in Singapore that offer services such as free insurance protection, and other related loans such as furnishing loans.

Pros and Cons of a Monthly Installment Loan


  • A monthly installment loan has a fixed amount of interest rate, regardless if the loan is secured or unsecured. 
  • It has a higher loan amount limit, especially for people with high income
  • It does not rely only on credit scores, which means that installment loan lenders focus on your current financial standing and ability to pay the loan. As long as you have proof of income, then it can be easy to get.
  • A monthly installment loan has predictable repayment terms, allowing you to conveniently prepare for the upcoming installments.


  • Having a fixed interest rate means that your interest rate will stay the same despite lowering of market rates.
  • Banks can give you a high interest rate, depending on your credit and the installment loan type. Average interest rate might be higher compared to rates on revolving credit lines.
  • Some banks do not allow prepayment, which means you have to serve the full loan tenure.

Where to Apply for a Monthly Installment Loan

Banks and licensed moneylender both offer a monthly installment loan, but each type of loan has differences in service.

Monthly Installment Loans Singapore
ServiceBanksLicensed Moneylender
Loanable AmountUp to 10 x monthly salary Up to 6x monthly salary 
Interest RatesFrom 3.8% p.a.Up to 4% per month
Loan TenureUp to 5 yearsUp to 12 months, subject to the terms and conditions of the agreement
Charges/FeesAnnual fees/Administration FeesProcessing feesProcessing fee
Application ProcessHigh importance of good credit scoresMore required documentsdays to several weeks application processHigh credit score is not required.Lesser required documents30 mins to one hour application process

How to Apply

To apply for a loan, you need to meet the eligibility criteria and requirements.

Eligibility criteria for moneylender

  • At least 18 years old
  • Employed/Self-Employed
  • Have a minimum monthly income of S$2,000 for Singapore citizens and permanent residents and minimum salary of $3,000 for foreigners

Eligibility criteria for banks

  • At least 21 years old 
  • Banks minimum annual income is $300,000

Requirements for moneylender

  • Identity Card (for Singapore resident/permanent resident)
  • Passport and work Permit (for Foreigner)
  • Proof of Residence
  • Proof of Employment (For employees)
  • Proof of Income (For self-employed)
  • Recent 3 months payslip
  • SingPass (To log into CPF, HDB, IRAS website)

Eligibility criteria for banks

  • Identity Card (for Singapore resident/permanent resident)
  • CPF contribution history statement (latest 9 months)
  • Latest 1 year income tax notice of assessment
  • Latest payslip or salary crediting into the bank account

Alternative to Installment Loans

1. Personal line of credit

A personal line of credit is like a revolving credit line account that has a floating interest rate. You can access the money as needed until the limit is reached. Repayments are based on the amount of money you consumed. A good credit score, around 680 or more, is required for this type of credit.

2. Credit card

Credit cards typically charge higher interest rates versus other forms of loans. But you can avoid this by paying the balance in full every month.


A home equity line of credit can be a great source of value for homeowners to access cas for large purchases. It comes as a lump sum of cash, typically with a fixed interest rate. HELOC also works much like a credit card and personal line of credit that you can access as needed.


To know if an installment loan is right for you, you must assess whether you have space in your budget to apply for a loan and have a monthly repayment schedule, even with difficult financial needs.

If you have trouble with paying off the loan within the repayment period, discuss with licensed moneylender or banks about options for changing the terms of the loan agreement.

It may also happen that revolving credit is much better for your needs, especially if you seek to borrow on a daily basis. It depends on your regular lifestyle, so you must assess your own life and needs as well before inquiring for a monthly loan.If you prefer personal loans, feel free to request up to three quotes from Moneylender Review. It is a loan comparison site that compares the best personal loan rates from top licensed moneylenders in Singapore.

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