Personal Loans in Singapore 2026: Rates, Eligibility, and How to Compare
Quick Answer
A personal loan in Singapore is unsecured credit repaid in fixed monthly installments. Compare the Effective Interest Rate (EIR) rather than the advertised flat rate. Under MAS rules, banks may only grant unsecured non-card loans to citizens and PRs earning at least $20,000 a year, and borrowers whose interest-bearing unsecured debt exceeds 12 times monthly income for three months in a row cannot get more unsecured credit.
Rates as of 2026. Verify with official sources before acting.
A personal loan in Singapore is an unsecured loan: you borrow a fixed amount, repay it over a fixed tenure in equal monthly installments, and pay interest without putting up collateral. Banks and licensed moneylenders both offer personal loans, but they are regulated by different bodies and follow different rules. Banks are supervised by MAS, while licensed moneylenders are regulated by the Ministry of Law. This guide explains the rules that actually limit how much you can borrow, and how to compare offers fairly.
How Do Personal Loans Work in Singapore?
Unlike a credit card, a personal loan has a defined repayment schedule, which makes it more suitable for a planned, one-off expense than for ongoing spending. You know from the start how much you will repay each month and when the loan will end.
Lenders advertise interest rates in two ways. The flat rate is charged on the original loan amount for the whole tenure, even though you are steadily repaying the principal. The Effective Interest Rate (EIR) reflects the cost of borrowing on the reducing balance, so it is the better number for comparing offers. Always ask for the EIR, and check whether it includes any fees.
If you are borrowing to clear credit card debt, run your card balance through the credit card payoff calculator first, so you can compare what clearing it directly would cost.
Flat Rate vs EIR: A Worked Example
Here is why the two rates differ so much, using simple loan arithmetic rather than any bank's actual pricing.
- Loan: $10,000 over five years at a 3.5% flat rate.
- Interest: 3.5% of $10,000 for five years is $1,750, charged on the full amount even as you repay it.
- Monthly installment: ($10,000 + $1,750) divided by 60 months is about $195.83.
- Equivalent EIR: solving for the rate on the reducing balance that matches those payments gives about 6.5% a year, before any fees.
At a 5% flat rate over the same five years, the same calculation gives an EIR of about 9.2%. The gap exists because, on a flat-rate loan, you keep paying interest on money you have already repaid. The lesson is simple: a flat rate can understate the true cost by close to half on a multi-year loan. Comparing EIRs puts different offers on the same footing. Use the Personal Loan Calculator to run your own figures.
Who Is Eligible: The MAS $20,000 Rule
MAS sets a minimum income for bank personal loans. Under paragraph 8 of MAS Notice 635, a bank in Singapore shall not grant an unsecured non-card credit facility to a Singapore Citizen or Permanent Resident unless they have an annual income of at least $20,000, or its equivalent in foreign currency, at the time of application. Joint borrowers are covered by the same notice.
Beyond this legal minimum, each bank sets its own criteria, such as age, employment history, and its assessment of your credit record. These vary by lender, so check the eligibility terms on the specific loan you are considering rather than relying on general rules.
The 12 Times Income Borrowing Limit
MAS also caps how much unsecured debt you can carry across all lenders. Its explainer on the borrowing limit for unsecured credit shows the limit was phased in: 24 times monthly income from 1 June 2015, 18 times from 1 June 2017, and 12 times monthly income from 1 June 2019.
The limit counts only interest-bearing unsecured debt, such as credit card balances not paid in full by the due date, interest-bearing unsecured loans, and interest on other debts. If your aggregate interest-bearing unsecured debt exceeds the limit for three consecutive months, you cannot get additional credit facilities and your existing facilities are suspended.
Example: if your gross monthly income is $5,000, the limit is $60,000 of interest-bearing unsecured debt across all banks. Paying your cards in full each month keeps that balance out of the calculation entirely. The limit applies across all your banks and card issuers together, so a new loan from one lender can take you over it even if each lender's own exposure looks small.
TDSR and Personal Loans
Personal loans also affect property borrowing. Under the MAS rules on the Total Debt Servicing Ratio, a borrower's TDSR should be less than or equal to 55% of gross monthly income. Your personal loan installments count as part of your monthly debt obligations when a bank assesses a property loan, so a large personal loan can reduce the home loan you qualify for.
Use the TDSR Calculator to see the effect before you borrow, and read our guide to how TDSR and MSR work.
Bank vs Licensed Moneylender: Key Differences
Licensed moneylenders follow rules set by the Ministry of Law. According to its guide to borrowing from licensed moneylenders, these rules have applied since 1 October 2015: interest is capped at 4% per month, late interest at 4% per month, the upfront administrative fee at 10% of the loan principal, and the late fee at $60 per month. All interest and fees combined cannot exceed an amount equal to the loan principal.
| Factor | Bank | Licensed moneylender |
|---|---|---|
| Regulator | MAS | Ministry of Law |
| Interest rate | Set by each bank; compare the EIR | Capped at 4% per month |
| Minimum income (citizens and PRs) | $20,000 a year for unsecured non-card credit | No minimum, but loan caps depend on income |
| Loan cap, annual income under $20,000 | Not eligible for unsecured non-card credit | $3,000 in total across all moneylenders |
| Loan cap, annual income $20,000 or more | Bank's own limit, within MAS's 12 times income rule | 6 times monthly income in total across all moneylenders |
Because of the much higher interest cap, a licensed moneylender should only be a last resort after bank options and free credit counselling have been explored.
How Do You Compare Offers?
- Compare EIR, not flat rate. A lower flat rate does not always mean a cheaper loan.
- Ask about every fee. Processing fees, early repayment charges and late fees all add to the real cost, and they differ between lenders.
- Check promotional terms. Some advertised rates apply only for a limited period or to particular loan amounts.
- Match the tenure to the purpose. A longer tenure lowers the monthly installment but increases the total interest you pay.
- Borrow only what you need. Every dollar of unsecured debt counts toward your 12 times income limit and your TDSR.
Frequently Asked Questions
What is the difference between flat rate and EIR on a personal loan?
The flat rate is charged on the original loan amount for the whole tenure, while the Effective Interest Rate reflects interest on the reducing balance. For example, a 3.5% flat rate over five years works out to an EIR of about 6.5% a year before fees, so always compare EIRs.
What is the minimum income for a personal loan in Singapore?
Under MAS Notice 635, banks may only grant unsecured non-card credit facilities to Singapore Citizens and Permanent Residents with an annual income of at least $20,000 at the time of application. Individual banks may set additional criteria.
How much unsecured debt can I have in Singapore?
MAS sets a borrowing limit of 12 times monthly income for aggregate interest-bearing unsecured debt, effective from 1 June 2019. If you exceed it for three consecutive months, you cannot get more credit and existing facilities are suspended.
Does a personal loan affect my ability to get a home loan?
Yes. Personal loan installments count toward your Total Debt Servicing Ratio, which MAS caps at 55% of gross monthly income for property loans. A large personal loan can therefore reduce how much you can borrow for a home.
How much can licensed moneylenders charge?
Under Ministry of Law rules in force since 1 October 2015, licensed moneylenders can charge at most 4% interest per month, 4% late interest per month, an upfront fee of up to 10% of the principal and a late fee of up to $60 a month, with total charges capped at the loan principal.