Personal loans are a type of installment loan, which allows you to borrow a fixed amount of money and pay it back with interest in monthly payments. Its amounts vary from lender to lender but what you qualify for is based on your credit health.

This type of loan can be used to finance an expensive medical bill, big purchases, consolidation of your debts, and funding for a small business. It can also be considered as a top-up for renovation loans and as a good resource for urgent cash.

The Monetary Authority of Singapore (MAS) currently limits how much a client can borrow to 12 times their monthly income. This is to ensure Singaporeans don't over-borrow and suffer from financial difficulties, which could have negative effects on the overall economy. Most banks can offer from $500 up to ten times a borrower’s monthly salary. 

For moneylenders, if a foreigner client’s income is less than $10,000, they can loan up to $500; if the income is at least $10,000 and less than $20,000, they can get up to $3,000, if their income is above $20,000, it’s likely they can avail for a loan 1 to 6 times of their income.

In Singapore, the licensed moneylenders are accredited by the Registry of Moneylenders. They are obligated to adhere to all the established lending guidelines, interests, and service fees in order for them to operate. Here’s a list of legal fees that moneylenders can only charge to borrowers:

• a fee not exceeding $60 for each month of late repayment;
• a fee not exceeding 10% of the principal of the loan when a loan is granted; and
• legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.

Personal loan approvals can take anywhere from a few minutes to days, depending on the type of lender. Licensed moneylenders can grant your loan in as fast as 30 minutes, while some banks and credit unions can take as long as a few weeks.

Repayment would normally vary depending on the amount that you have borrowed. There is a loan repayment period calculator that people can use online to compute how long it’s likely to take to repay their loans.

Usually for moneylender, the maximum repayment period is up to 12 months subject to the terms and conditions of the agreement. For banks, the tenure is up to 5 years.

Various licensed moneylenders will have different policies for their personal loans and payday loan offers. However, generally, personal loans have longer repayment periods. Payday loans, from the word itself, requires clients to pay back their loan in full plus the finance charge by its due date, which is typically within two weeks or by your next paycheck.

Yes, you can take multiple loans. But even though you can apply for over one loan, your application will still be subject to evaluation to make sure that you don’t over-borrow and suffer from financial troubles. Money lending in Singapore undergoes a strict process to protect both the borrower and the moneylender.

Through Moneylender Review’s searching tool, potential borrowers can easily look for lenders that are near their area which offer the most ideal loans for them.

Personal Instalment Loan - This can be used by Singaporeans and permanent residents in the area. This involves borrowing a specific sum, paying a 1-time processing fee and agreeing to repay the amount in fixed monthly repayment. The loan interest and fees are calculated for the whole loan tenure and added to the total loan amount. 

Foreigners can also apply for it, but the conditions require an employment pass of at least 6 months validity, and 3 months' payslips to generate your annual income.

Line of Credit - is an overdraft facility that only charges interest when you withdraw from the account. Once approved, the funds can be withdrawn via ATM, cheque, internet banking, or by going to a physical bank branch. You are charged loan interest the moment you draw funds. No loan interest is charged, when you repay the funds.

It typically has an annual fee ranging from $60 to $120. While its interest rates are generally between 18% to 22% p.a, before any promotional offer. This is deemed useful as a standby cash fund for unexpected expenses.

Fund Transfer - This loan uses the available credit on your card. You pay a 1-time processing fee and enjoy a very low interest or 0% rate for between 3 to 12 months.

Banks normally charge a 1-time processing fee of between 1% to 5% on your approved loan amount. The best balance transfer offers will waive this processing fee. Balance transfers are ideal should you need cash urgently, or have a big, short-term expense on the horizon and want to avoid high-interest rates on other types of loan facilities. 

Debt Consolidation Plan - This loan is a government-approved scheme available with all leading banks in Singapore. It brings together all your open unsecured credit under 1 easier repayment and debt management. 

Depending on the bank and promotional rates, the Effective Interest Rate is typically between 6.7% to 12% p.a. This is commonly used by those who are having trouble keeping up with loan repayments and have a rough guide being 12x monthly salary.

Credit card - This allows you to make purchases and pay back what you owe little by little over time or all at once. If you repay your balance in full within a month, you’ll avoid interest charges.

Payday Loan - This is a short-term loan that gives you money that you need until you receive your next paycheck. 

A personal line of credit -  Similarly to a credit card; you don’t follow a set payoff schedule for your debt, and you can tap your credit line on an as-needed basis.

Peer-to-peer (P2P) - These loans are like personal loans, except they are funded by individual investors rather than a single lending institution.

Home equity loan - This is a second mortgage that gives you a lump-sum amount of money that is repaid on a set schedule. The amount you can borrow is determined by the amount of equity you have in your home, and terms range from five to 15 years.

Small business loan - A business loan can help keep your personal finances separate from your business expenses. These also tend to have lower interest rates than personal loans.

Yes. Depending on your circumstances, a personal loan may be the best option for financing your vehicle purchase. It's advisable as you can receive the money within a few days and aren’t required to find the vehicle you plan on buying first. There is also no collateral needed.

While you could use a credit card to pay for a wedding, there are downsides. Should your card contain a high annual percentage rate, carrying a large balance over an extended time period could make your wedding more expensive than you’d planned.

A personal loan, on the other hand, could be a cheaper way to cover all your wedding costs. It also may have better interest rates than a credit card and take less a toll on your credit score.

Also deemed as a business loan, with a term loan, you receive a lump sum of capital that you pay back over a specific time period with a set interest rate, which might be fixed or variable. Meanwhile, a line of credit is one of the most flexible financing products on the market. 

While both term loans and lines of credit can provide you some much-needed capital, they have different use cases. Term loans are best for specific, one-off purchases. Lines of credit, on the other hand, are best for ongoing operating expenses. This type of financing is much more flexible and is usually revolving, meaning you don’t have to reapply each time you use and repay your loan.

A Flat Interest Rate plan computes interest payments based on the initial principal. In Singapore, it is normally applied to car loan financing. Meanwhile, the Effective Interest Rate plan computes interest payments based on the remaining outstanding principal at the end of each term and works on computing interest on a reducing balance basis. This is applied for mortgage loan financing in Singapore.