List of MinLaw Licensed Moneylenders in Singapore (25 February 2019 Update)

List of MinLaw Licensed Moneylenders in Singapore (25 February 2019 Update)

There will always be times where we need money urgently or have emergencies that needs to be taken care of. Some of us would turn to banks for financial help but there is always the chance that they will reject the application due to their strict criteria. The other option that applicants have is moneylenders but many would frown as the word moneylender is commonly linked with loan sharks. The truth is, not all moneylenders are loan sharks. There are legal and reliable moneylenders and we have included a complete list of licensed moneylenders in Singapore.

Here is the list of the Top 10 licensed moneylenders in Singapore.

(Updated List as of 25 February 2019 based on the Ministry of Law)

Here is the complete list of legal and licensed moneylenders in Singapore.

(Updated List as of 6 February 2019 based on the Ministry of Law)

Business NameBusiness AddressLicense No.Website
AP Credit10, Anson Road, #01-38A, International Plaza, Singapore 07990350/2019
BST Credit Pte. Ltd801, French Road, #02-33, Singapore 200801134/2018
Credit 21 Pte. Ltd.10, Anson Road, #01-07, International Plaza, Singapore 07990351/2018
Credit Matters Pte. Ltd.801, Geylang Road, #02-01, Singapore 38968170/2018
Credit Thirty3 Pte. Ltd.304 Orchard Road, #02-88 Lucky Plaza, Singapore 2388631/2019
CreditMaster Pte. Ltd.1, Park Road, #01-50, People’s Park Complex, Singapore 05910844/2018
Horison1, Park Road, #01-15, People’s Park Complex, Singapore 05910892/2018
Katong Credit Pte. Ltd.304, Orchard Road,#02-30/31, Lucky Plaza,Singapore 23886315/2018
U Credit (Pte.) Ltd.180, Bencoolen Street,#01-19, The Bencoolen,Singapore 189646163/2018
101 Credit Pte. Ltd.101, Upper Cross Street, #01-24, People’s Park Centre, Singapore 05835740/2018
1133 Moneylenders Pte. Ltd.262, Balestier Road, #01-02, Okio, Singapore 32971495/2018
1st Capital Pte. Ltd.304, Orchard Road, #04-01, Lucky Plaza, Singapore 2388635/2018
1st Credit SG Pte. Ltd.149, Rochor Road,#01-07, Fu Lu Shou Complex, Singapore 18842590/2018
1st LG Credit Pte. Ltd.304, Orchard Road, #02-29, Lucky Plaza, Singapore 23886358/2018
365 Credit Solutions Pte Ltd14, Scotts Road, #03-64, Far East Plaza, Singapore 22821322/2018
96 Credit883, North Bridge Road, #01-13, Southbank, Singapore 198785144/2018
A1 Credit2 Havelock Road, #02-08, Havelock2, Singapore 059763117/2018
ABI Credit Pte Ltd185, Toa Payoh Central, #01-320, Singapore 31018527/2018
ABK Leasing13, North Bridge Road, #01-3984, Singapore 190013118/2018
ABM Creditz1, Park Road, #01-12, People’s Park Complex, Singapore 059108145/2018
Advance Cash Credit Pte. Ltd.304, Orchard Road, #04-12/13, Lucky Plaza, Singapore 23886362/2018
Advance Planners Credit220, Orchard Road, #01-08, Midpoint Orchard, Singapore 23885268/2018
Aero Credit Pte. Ltd.810, Geylang Road, #02-15, City Plaza, Singapore 40928676/2018
AK Credit Corporation Pte. Ltd.2, Havelock Road, #01-16, Havelock2, Singapore 059763147/2018
AKB Moneylenders69 Jalan Besar, Singapore 2088154/2018
Alles Autos Credit Pte. Ltd.133, New Bridge Road, #01-34, Chinatown Point, Singapore 05941396/2018
Alpha 8 CreditBlk 449, Clementi Avenue, #01-265, (2nd floor only), Singapore 12044957/2018
Andal Enterprise50, Tagore Lane, #04-11-A2, Entrepreneur Centre, Singapore 78749481/2018
AR.T. Firm Money Lender238A, SERANGOON ROAD, SINGAPORE 21808597/2018
Avis Credit185, Toa Payoh Central, #01-344, Singapore 31018545/2018
Ban King Credit (S) Pte. Ltd.705, Ang Mo Kio Avenue 8, #01-2563, Singapore 56070559/2018
Best Credit SG Pte. Ltd.372, Bukit Batok Street 31, #01-374, (level 2), Singapore 650372119/2018
Bliss Credit Pte. Ltd.11, Collyer Quay, #03-24, The Arcade, Singapore 049317133/2018
BTB Creditz Pte. Ltd.810, Geylang Road, #01-05/14, City Plaza, Singapore 40928691/2018
Bugis Credit Pte Ltd470, North Bridge Road, #02-12, Bugis CUBE, Singapore 18873537/2018
Capital Funds Investments65, Ubi Crescent, #03-03, Hola Centre, Singapore 408559166/2018
Cash Check Singapore Pte. Ltd.726, Ang Mo Kio Avenue 6, #01-4166, Singapore 560726112/2018
Cash Direct Ptd. Ltd.1187, Upper Serangoon Road, #01-16, The Midtown, Singapore 40928684/2018
Cash Mart Pte. Ltd.277, Balestier Road, Singapore 329726186/2017
Cashmax Credit Pte. Ltd.810, Geylang Road, #01-56, City Plaza, Singapore 40928656/2018
Crawfort Pte. Ltd.1, North Bridge Road, #01-35, High Street Centre, Singapore 17909472/2018
Credit 89200, Jalan Sultan, #04-21B, Textile Centre, Singapore 19901826/2018
Credit Assist Pte. Ltd.101, Upper Cross Street, #01-15, People’s Park Centre, Singapore 05835723/2018
Credit Empire Enterprise Pte. Ltd.304, Orchard Road, #02-103, Lucky Plaza, Singapore 23886354/2018
Credit Excel Capital Pte. Ltd.192, Waterloo Street, #05-04, Sky Line Building, Singapore 18796698/2018
Credit Hub Capital Pte. Ltd.190, Middle Road, #10-01A, Fortune Centre, Singapore 188979120/2018
Credit King Pte. Ltd.101, Upper Cross Street, #01-27, (Part)& #B1-49 People’s Park Centre, Singapore 05835750/2018
Credit Xtra Pte. Ltd.People’s Park Centre, 101 Upper Cross Street #01-05C, Singapore 05835780/2018
Dalip Singh & Company3, Coleman Street, #04-32, Peninsula Shopping Centre, Singapore 17980487/2018
DIO Credit Pte Ltd810, Geylang Road, #01-115&6, City Plaza, Singapore 409286140/2018
Dynamic Money Lenders3, Ang Mo Kio Street 62, #02-29 , [email protected] (Office Unit 01-09), Singapore 569139121/2018
Elite Investment & Credit Pte. Ltd.799, Geylang Road, #01-01, Singapore 38968064/2018
Empire Global Pte Ltd513, Bishan Street 13, #01-514, Singapore 57051353/2018
Emvertex Credit (SG) Pte. Ltd.200, Jalan Sultan, #02-33, Textile Centre, Singapore 199018135/2018
Ethoz Protect Pte. Ltd.30, Bukit Batok Crescent, Singapore 658075178/2017
Excel Credit (Pte.) Ltd.Blk 449, Clementi Avenue 3, #01-241, (plot B), Singapore 12044912/2018
EZ Loan Pte. Ltd.i: 3, Beach Road, #01-4853, Beach Road Gardens, Singapore 190003, ii: 1, Tanjong Pagar Plaza, #02-09, Singapore 08200130/2018
EZ Pte. Ltd.765, Geylang Road, Singapore 38966329/2018
Fast Money Pte. Ltd.i: 101, Yishun Avenue 5, #01-39, Singapore 760101, ii: 505, Tampines Central 1, #01-341, Singapore 520505122/2018
Fong Chin Capital Pte. Ltd.129, Bedok North Street 2, #01-42, Singapore 46012999/2018
Fortune Credit Pte. Ltd.470, North Bridge Road, #02-06, Bugis Cube, Singapore 18873542/2018
G Credit441A, Clementi Avenue 3, #01-01, Clementi Towers, Singapore 12144117/2018
Gain Credit Pte. Ltd.807, Yishun Ring Road, #01-4197, Singapore 760807146/2018
Galaxy Credit and Investments Pte Ltd709, Ang Mo Kio Avenue 8, #01-2595, Singapore 560709158/2018
GM Creditz Pte. Ltd.111, North Bridge Road, #01-35, Peninsula Plaza, Singapore 17909888/2018
Gold Allianze Capital Private Limited1, Rochor Canal Road, #01-03, Sim Lim Square, Singapore 18850446/2018
Golden Credit (S) Pte. Ltd.101, Upper Cross Street, #01-05F, People’s Park Centre, Singapore 05835749/2018
Goldstar Credit Pte. Ltd.i: 183, Toa Payoh Central, #01-21, Singapore 310183, ii: 183, Toa Payoh Central, #01-254, Singapore 310183123/2018
GS Credit Pte. Ltd.1, Gateway Drive, #06-08, Westgate, Singapore 608531100/2018
GT Credit Pte. Ltd.178, Toa Payoh Central, #01-202, Singapore 31017811/2019
GV Credit Pte Ltd101, Joo Chiat Road, GV Building, Singapore 427395101/2018
Happy Cash Pte. Ltd.465, North Bridge Road, #01-5083, Singapore 19146532/2018
Hersing Credit Pte Ltd21, Tampines Street 92, #05-00, H C Design Centre, Singapore 528891102/2018
HHL Credit Pte. Ltd.1, Rochor Canal Road, #01-04, Sim Lim Square, Singapore 18850428/2018
HMS Credit Pte Ltd189, Selegie Road, #B1-11, Selegie Centre, Singapore 18833283/2018
Hua Yang Credit Pte Ltd159, Sin Ming Road, #01-03, Amtech Building, Singapore 188504124/2018
Hup Hoe Credit Pte. Ltd.1, Rochor Canal Road, #01-01, Sim Lim Square, Singapore 188504113/2018
I-Credit Pte. Ltd.82, Lorong 23 Geylang, #05-02, Atrix, Singapore 38840994/2018
IP Credit Pte. Ltd.185, Toa Payoh Central, #01-332, Singapore 31018566/2018
JD Credit Pte. Ltd.531, Upper Cross Street, #01-38, Hong Lim complex, Singapore 05053148/2018
Jefflee Credit Pte. Ltd.131, Jurong Gateway Road, #01-261, Singapore 600131103/2018
JML Credit756, Upper Serangoon Road, #04-13, Upper Serangoon Shopping Centre, Singapore 534626148/2018
JNB Creditz175, Bencoolen Street, #01-25, Burlington Square, Singapore 189649159/2018
Jothi Moneylender5001, Beach Road, #07-63, Golden Mile Complex, Singapore 199588160/2018
JR Credit (S) Pte. Ltd.304, Orchard Road, #02-14, Lucky Plaza, Singapore 23886338/2018
Kairon Services111, North Bridge Road, #05-15A, Peninsula Plaza, Singapore 17909852/2018
Karthik Money Lending238A, Serangoon Road, Singapore 21808589/2018
KBB Credit111, North Bridge Road, #01-35, Peninsula Plaza, Singapore 1790983/2019
Khalon & Gill Moneylenders Pte. Ltd.1, North Bridge Road, #B1-25-A, High Street Centre, Singapore 179094136/2018
Kim Eng Finance (Singapore) Pte Ltd50, North Canal Road, #03-01, Singapore 05930474/2018
KR RM Ramasamy Pte. Ltd.238A, Serangoon Road, Singapore 218085149/2018
KST Credit Pte. Ltd.220, Orchard Road, #01-01, Midpoint Orchard, Singapore 23885275/2018
Lian Fong Credit & Trading (Pte) Ltd96, Jalan Jurong Kechil, Singapore 598599137/2018
Magnus Credit Pte. Ltd.301, Ubi Avenue 1, #01-279, Singapore 40030135/2018
Majestic Credit Pte. Ltd.101, Upper Cross Street, #01-26B/G, People’s Park Centre, Singapore 0583576/2019
Max Credit Pte. Ltd.1, Sophia Road, #01-15, Peace Centre, Singapore 22814977/2018
MM Credit Pte. Ltd.217, Bedok North Street 1, #01-63, Singapore 4602178/2019
Monetium Credit (S) Pte. Ltd.220, Orchard Road, #01-10, Midpoint Orchard, Singapore 238852161/2018
Motor-Way Credit Pte Ltd1094, Lower Delta Road, Motorway Building, Singapore 169205104/2018
MWA Capital Pte. Ltd.3, Phillip Street, #13-01, Royal Group Building, Singapore 048693125/2018
New ERA Credit50, East Coast Road, #02-58, Roxy Square, Singapore 42876982/2018
Oasis Credit442, Clementi Avenue 3, #01-87, Singapore 120442142/2018
On Line Credit Pte LtdBlk 210, New Upper Changi Road, #01-731, (half portion only), Singapore 46021033/2018
Orange Credit Pte. Ltd.810, Geylang Road, #01-91, City Plaza, Singapore 40928661/2018
Outer Trust Credit Services135, Jurong Gateway Road, #01-323, Singapore 600135114/2018
P Lakshmi Firm77, High Street, #09-15, High Street Plaza, Singapore 179433141/2018
Pardeep Moneylenders77, High Street, #06-14, High Street Plaza, Singapore 17943325/2018
Phillip Credit Pte. Ltd.250, North Bridge Road, #06-00, Raffles City Tower, Singapore 179101105/2018
Pit-Stop Credit200, Jalan Sultan, #02-27A, Textile Centre, Singapore 19901873/2018
Platinum Credit Pte Ltd1, Coleman Street, #01-11, The Adelphi, Singapore 179803126/2018
Power Credit Enterprise Pte. Ltd.1, Tras link, #01-11, Orchid Hotel, Singapore 078867150/2018
PR Veerappa Chettiar77, High Street, #09-15, High Street Plaza, Singapore 1794339/2019
Prime Motor & Leasing Pte. Ltd.61, Ubi Avenue 2, #01-03, Automobile Megamart, Singapore 408898106/2018
Prosper Credit Pte. Ltd.186, Toa Payoh Central, #01-420, Singapore 31018678/2018
Quick Credit Pte Ltd2, Jurong East Street 21, #04-01A, IMM Building, Singapore 60960139/2018
Quick Loan 10110, Anson Road, #01-15, International Plaza, Singapore 079903138/2018
QV Credit Pte. Ltd.175A, Bencoolen Street, #11-08, Burlington Square, Singapore 18965067/2018
R2D Credit Pte. Ltd.Blk 846, Yishun Ring Road, #01-3661, Singapore 76084619/2018
Radeep Moneylender77, High Street, #04-06, High Street Plaza, Singapore 179433127/2018
Riverbank Financials Pte Ltd228, Changi Road, #B1-12, [email protected], Singapore 419741128/2018
RM Credit Pte. Ltd.No. 2 Havelock Road #01-17 Havelock II Singapore 059763156/2018
RM. Renganathan moneylender29A, Upper Dickson Road, Singapore 20748847/2018
S G Credit Pte Ltd304, Orchard Road, #02-98, Lucky Plaza, Singapore 23886379/2018
S.P. Moneylender43A, Campbell Lane, 2nd Floor, Singapore 20991563/2018
S21 Credit704, Ang Mio Kio Avenue 8, #01-2545, Singapore 56070493/2018
Sands Credit Pte. Ltd.175, Bencoolen Street, #01-06, Burlington Square, Singapore 189649129/2018
SGP Credit133, Jurong Gateway Road, #01-299, Singapore 60013319/2019
Shanmugan Moneylender10, Jalan Besar, #13-05A, Sim Lim Tower, Singapore 208787107/2018
Sighappi Achi Moneylender25, Norris Road, 2nd Floor, Singapore 20826743/2018
Sincere Moneylender Pte. Ltd.13, Jalan Besar, ( level 1 only), Singapore 20878986/2018
Singa Credit Pte Ltd470, North Bridge Road, #02-01, Bugis Cube, Singapore 188735130/2018
SKM Credit Pte. Ltd.185, Toa Payoh Central, #01-334, Singapore 31018524/2018
SME Care Pte. Ltd.5, Jalan Kilang Barat, #07-02, Petro Centre, Singapore 159349108/2018
Soon Seng Moneylender711, Ang Mo Kio Avenue 8, #01-3501A, Singapore 56071120/2018
Su Credit Pte. Ltd.175, Bencoolen Street, #01-36, BURLINGTON Square, Singapore 189649116/2018
Sumo Credit Pte. Ltd.190, Middle Road, #02-06, Fortune Centre, Singapore 18897910/2019
Swift Credit Pte. Ltd.1, Sophia Road, #01-37, Peace Centre, Singapore 228149152/2018
Synergy Credit Pte. Ltd.140, Upper Bukit Timah Road, #02-18, Beauty World Plaza, Singapore 588176162/2018
Tan & Jiang Enterprise Pte. Ltd.201D, Tampines Street 21, #03-1157, Singapore 52420116/2018
The Moneylenders Pte. Ltd.7A, Tech Park Crescent, Singapore 637839109/2018
TK Moneylenders43A, Campbell Lane, 2nd Floor, Singapore 20991536/2018
Tradition Credit Co Pte Ltd810, Geylang Road, #02-79, City Plaza, Singapore 409286139/2018
Trillion Credit Solutions Pte. Ltd.i: 101 Upper Cross Street, #01-26/A, People’s Park Centre, Singapore 058357, ii: 304, Orchard Road, #02-12, Singapore 238863153/2018
Tur Mohar Money Lending5001, Beach Road, #07-39, Golden Mile Complex, Singapore 19958865/2018
UK Credit210, New Upper Changi Road, #01-723, Singapore 46021021/2018
Unilink Credit Pte. Ltd.35, Selegie Road, #10-27, Parklane Shopping Mall, Singapore 188307154/2018
Uniqcash Pte. Ltd.7A, Trengganu Street, Singapore 05846141/2018
United Credit Pte Ltd186, Toa Payoh Central, #01-410, (2nd Floor), Singapore 31018660/2018
Unlimited Finance Pte. Ltd.162, Bukit Merah Central, #01-3541, Singapore 150162155/2018
Vera Capital Pte. Ltd.302, Ubi Ave 1, #01-33, Singapore 400302110/2018
VM Credit Pte. Ltd.261, Waterloo Street, #01-31, Waterloo Centre, Singapore 180261111/2018
Wah Leong Company (Private) Limited339, Jalan Besar, Singapore 2089842/2019
Winz Credit Pte. Ltd.i: 153, Serangoon North Avenue 1, #01-530, Singapore 550153, ii: 124, Lorong 1 Toa Payoh, #01-467, Singapore 310124131/2018
HSX Credit5001, Beach Road, #06-47, Golden MileComplex, Singapore 19958880/2017 ( *** Suspended Till 19/04/2019 ***)

What are licensed moneylenders in Singapore? Are they loan sharks?

Contrary to the belief of many, not all moneylenders are loan sharks. Yes, not all of them will hang pig heads and splash paint at your door. Loan sharks who charge exorbitant interest rates are illegal moneylenders in Singapore.

To provide more options for financing, there are licensed moneylenders who are reviewed and approved by the Ministry of Law and many of them have been in business for many years. Some of them even operate 7 days a week. The interest rates of licensed money lenders are not sky-high. Instead, they are able to offer lower interest rates, faster approval and flexible repayment plans depending on individual’s profile.

Loans offered by licensed moneylenders are usually unsecured. Unsecured loans are loans that do not require collateral (house, car, assets). Most of the loans offered by banks are secured and require collateral. This means that it may be harder for some to get a loan from banks.

How can getting a loan help me?

There are always times in our lives where we need some extra cash. It could be money to pay the bills, money to pay off other loans, for an emergency or simply cash to purchase the goods that you’ve been eyeing for the longest time. Licensed moneylenders are here to help you achieve your goals or get through the tough period. Nonetheless, we strongly recommend you to only apply from financial institutions that you truly trust and only apply for the amount that you can repay.

What if I have a bad credit score? Can I still get a loan?

Unfortunately if you already have a bad credit, it may be harder for you to get a loan from local banks. Banks generally have more stringent checks. Having a bad credit score implies that it is riskier for banks to provide a loan for you and hence, they may reject your application. Licensed moneylenders on the other hand are usually more flexible and willing to understand your situation in order to help you.

Can I still get another loan if I already took one?

The answer is yes, you can still get another loan. You might already have a home loan or a car loan but still need some cash for your emergency. It is still possible to get another loan at an amount that you prefer. Each financial institution will evaluate your profile and provide you with the best rates and amount.

I don’t want to get conned. What should I look out for when getting a personal loan from a moneylender?

We understand how scary it can be to take a loan. After all, it is a serious financial commitment.

The first step you should take is to check with the most updated list of licensed moneylenders by the ministry of law to make sure that the company you are planning to borrow from is legal and reliable. Secondly, shop around the different moneylenders so as to get yourself the best interest rate and repayment plan. Thirdly, be clear of the amount that you are borrowing, the interest rate and the monthly repayment fee. Do ensure that you are getting an amount that you can handle and repay. The last and most important tip, is to always read the small fine prints on the forms in case they have additional terms and conditions. Take your time and shop around for the best repayment plans and lowest interest rates, do not rush into a loan.

How do I know if the loan advertisements are real or not?

It can be hard to differentiate between a legal licensed moneylender and an illegal moneylender. We all want to work with reliable moneylenders and we definitely don’t want to fall into a high interest rate debt trap. Other than checking the list of licensed moneylenders in Singapore, note that licensed moneylenders are only allowed to advertise through 3 channels. First, only on consumer and business directories in both print and online media. Next, their own websites and lastly, advertisements can only be placed within the premises of their own shop or business area. Do be wary that flyers, SMSes, emails might be from unlicensed moneylenders.

What are the interest rates moneylenders can charge?

From 1 October 2015, the maximum interest rate licensed moneylenders are able to charge is 4% per month. This is applied regardless of the borrower’s income and if it is a secured or an unsecured loan. If the applicant fails to repay on time, the maximum rate of interest charged is 4% per month for each month the loan is repaid late.

Computation of interest charged on the loan should be based on the remaining loan amount left. For example, if Ben takes a loan of $10,000 and repays $3,000, only the remaining $7,000 can be taken into account for the computation of interest.

Late interest can only be charged on the amount that is repaid late. Licensed moneylenders are not allowed to charge on amounts that are outstanding but not due yet. For example, if Charlie takes a loan of $20,000 but fails to pay for the first installment of $2,000, the moneylender may only charge the late interest on the late fee of $2,000, not on the remaining $18,000 that is not yet due.

What are the fees that moneylenders can charge? How to avoid unnecessary payments?

Licensed moneylenders are not allowed to charge a fee exceeding $60 for each month of late repayment. They are also not allowed to charge a fee that exceeds 10% of the principal loan amount when the loan is granted. Moneylenders in Singapore can impose the legal costs ordered by the court for a successful claim by the moneylender for the recovery of loan. All licensed moneylenders are suppose to explain all the conditions and rates clearly in a language that the borrower’s are comfortable with before completing the contract.

I can get a credit card loan if I need some extra cash. Why should I choose personal loans from a moneylender?

Yes, a credit card loan is also another option available to borrowers. However, most of the credit cards charge a very high interest rate that is mostly higher than that of personal loans. If you need cash urgently and cannot wait for the approval or bank or is rejected by the bank, you can approach a licensed moneylender as they are much quicker in approval and disbursement and have lower interest rates than credit cards. Licensed moneylenders also have knowledgeable and friendly financial assistants to address your queries.

Here are the 5 simple steps to getting the best loan for yourself:

1. Evaluate your financial needs – One of the greatest mistakes applicants make is borrowing without any plan in place. You have to carry out a financial assessment and clearly identify the reason and amount that you need.

2. Assess the lending company – The lender must be licensed and regulated by the Registry of Moneylenders. They should also be members of the Moneylender’s Association of Singapore (MLAS). Additionally, they should have a great track record and extensive experience in lending and helping applicants.

3. Compare loans available – Go online and use comparison websites to find as many loans as possible. Look at the best rates and flexibility of the repayments before opting for any. Most of them even have a live chat function for you to ask clarify your doubts.

4. Look for a tailored loan – Talk to different lenders and ask if they can offer a loan based on your unique financial situation. Such a loan will be easier to service.

5. Prepare for the loan – You need to have the necessary documents for the loan. Borrowers usually need to be 21 to 65 years old and have a stable source of income. Each moneylender will usually state the other information they require on their website.

What are personal loan tenures? What affects the tenures? 

Loan tenure refers to the term of the loan, or how long it will take you to repay the loan. Every lender has their minimum and maximum loan repayment period, but on average, a personal loan repayment term can be between one and five years. Tenure for personal loans is affected by the following factors:

Loan amount – There is a relationship between tenure and how much you end up paying on the loan. When the tenure is very long, you end up paying more in the long run. However, with a longer tenure, your monthly repayments are less and your debt burden ratio decreases as well. The Singapore government has capped the Debt Burden Ratio (DBR) at 60% of your monthly income. By spreading out your loan repayments, you are able to take a higher loan amount than if you had kept your tenure shorter.

Monthly repayments – As your loan tenure increases, the amount you pay every month is spread out more and therefore you get to pay less. If you have a shorter tenure, the monthly payments will increase because you are paying off a large amount of money in a short period of time. This makes loan tenure an individual choice, because you will have to look at your current responsibilities and determine how much you can pay. The monthly payments should be comfortable for you, and should not strain your finances unduly.

Interest rates – The amount of interest you need to pay on the money borrowed remains the same whether you go for longer or shorter term. However, when your personal loan tenure is short, the interest is crowded into that period, which contributes to the hike in your monthly payment amount. It is important to note that when the tenure is increased by say another year, you end up paying more because the loan accrues additional interest for the extra year.

Bank options – If you decide to borrow from the bank, you will find that each bank has its own rules regarding Debt Burden Ratio (DBR). Some cap it at the 60% recommended by the government, while others will cap it at 40%. This means that even if they will be happy to loan you the money you need, they may not be able to give it to you at a short tenure because it will raise your DBR above their cap. Should you have a DBR that is actually above their cap, but less than what the government recommends, the bank will consider you ineligible for any of their loans.

Pros and Cons of Short Loan Tenure

  • Reduced interest amount. When the tenure is short, your total interest amount reduces automatically even when your monthly repayments increase.
  • Unfortunately, with the higher monthly repayments, chances of defaulting increase. Should you default, you will feel the effect in your credit report since your credit score will drop, and in the future, getting a loan may be a little more difficult. A poor credit score tells financial institutions that you might not be able to make repayments on time, making it risky for them to lend you the money.

Pros and Cons of Long Loan Tenure

  • It is ideal for someone whose DBR is already high. By making smaller payments spread out over a longer period of time, you will be able to keep managing your finances without too much strain.
  • With longer tenure, the monthly repayments are reduced.
  • However, your number of monthly repayments increases. You need more time to repay the entire debt.
  • The amount of interest you pay also increases because it takes longer to pay off the debt.

Prior to taking a personal loan and selecting a tenure, you need to think through some personal factors that can make a deal great for you.  Remember that a loan with terms that you are happy and comfortable with. It should not strain you too much financially.

Here are some tips that will help you make the best choice for your current financial situation.

Consider your monthly budget – You will have to review your current budget and write down your fixed and variable commitments. Be sure to put aside some money for miscellaneous expenses as well, so that when something unexpected crops up, you will have the finances to deal with it. Now check the money already assigned to expenses against what is left over and see how much you have to spare. The personal loan tenure you select should offer you a monthly repayment amount that fits well within that budget. You don’t want to give yourself additional financial pressure at the end of every month.

Review any financial prospects you may have in the future – In the event that as a salaried employee you are due for a raise soon, you can factor that in as an increase in disposable income. This means that you can accommodate higher monthly repayments. By putting this extra income to loan repayment, you will be paying off your loan in less time, and will reduce the amount of money you pay overall in interest. It is important to note that until you actually receive the pay raise, you will have increased financial burden, but when the raise comes, everything will be smooth.

Existing liabilities – Don’t let the excitement of taking the loan cause you to forget your other liabilities. Existing liabilities can include study loans, tuition fees, credit card payments, rent, the car note and more. Also consider that in Singapore your DBR should remain under 60% and these liabilities will have already eaten up some of that allowance. The personal loan tenure you opt for needs to take these into account and balance your obligations out so that you are not struggling from month to month. Using a spreadsheet to note everything can help you keep an eye on the bigger picture even as you plan for your personal loan.

Do the math – It is a good idea to do the math prior to signing up for the loan. Understand what this loan will cost you in terms of interest rate and other fees. Calculating how much you will pay in interest based on the tenure you select is especially important. Of course, longer tenure equals more interest, but by how much? That is the question you want to answer.

Calculate your EMI – Most lenders have tools on their website that you can use to get a rough idea of what taking the loan will mean for your finances. Using an EMI calculator will help you check on how much you will be making in monthly repayments. A good calculator will also show you how the various charges are broken up so that you understand where the costs are coming from. Use these tools to carry out a comparison of loan offers and various tenures so that you find the one that works perfectly for you.

Personal loans are readily available, but that does not mean that you use them carelessly. Always look for the best deals in the list of licensed moneylenders and ensure that you have good financial discipline so that you do not affect your credit score in the future by biting off more than you can chew.