This guide to foreigner loans serves to provide the latest up-to-date information on loans for foreigners in Singapore. It is a work in progress and will be updated progressively. We hope that it is helpful. Please contact us if you have any questions at all.
What is the Purpose of a Foreigner Loan?
Foreigner Loans are loans offered to foreigners working in Singapore. A foreigner Loan is like a personal cash loan that will help you with your financial needs. It's typical that banks will refuse to lend to a foreigner, depending on your salary and employment permit/pass type. So, for a foreigner, you might want to consider a licensed lending company as a viable alternative.
As long as you are eligible for a foreigner loan, you can find the right scheme that will fit your needs and your budget.
Where to Get a Foreigner Loan?
You are now working and living in another country. To top it off, you are in need of financial assistance from a reliable source. For your protection, it is wise to get foreigner loans with banks and licensed credit companies. Avoid unlicensed and illegal lenders at all costs. Aside from legal and reasonable interest rate charges, legal lenders offer terms according to your needs and peace of mind.
Make sure to do a research before choosing a credit institution. It is essential that you know your capacity to pay to avoid penalties and delayed loan repayments.
What are the Requirements for a Foreigner Loan Application?
To qualify for a personal loan, you must have a valid Singapore Work Pass (legally allowing you to work in Singapore). In addition, you must be at least 21 to 55 years of age and employed on a full-time basis. You may also have to submit a residence tenancy agreement, a bank statement and an employment letter from your company. The lender will review these documents to gauge whether you're mostly likely to stay and pay for the loan.
You should note that typically banks (especially the larger ones) may have more stringent requirements for loans and all types of credit for foreigners.
What is the Interest Rate of a Foreigner Loan?
Interest rates of Foreigner Loans differ from every institution. Interest rates can range from 4.48% to 10% per annum or more. A foreigner Loan is considered high-risk for the lender because foreigners typically stay in a country temporarily, hence the high-interest rate.
However, this really depends on your credit and employment history in Singapore. So it's best to apply and ask your lender as many questions as you need to feel comfortable with taking up a loan.
What to Consider When Applying for a Foreigner Loan?
Look for reputable and licensed lending companies to avoid scams and harassment. Do check if they have reasonable interest rates and installment plans that will suit your income and needs. Most of the banks offer foreigner loans but some credit institutions provide faster approval process, as well as possibly lower qualification criteria.
You should also consider your income and the duration of your stay to avoid unpaid debts in other countries which may lead to a more serious problem.
Why Do Foreigners Need Loans?
When you are in another country, you are either employed or studying. Unless you happen to have a very generous relative that will provide you shelter, you're most likely in need of a home. Foreigner loans can help you through a financial crisis. It can be for medical services, visa issues, house rentals or for whatever your family might need back home.
How Fast Can I Get the Money After Application?
Once you have the required documents, go to the credit company and submit your requirements. All documents will be reviewed for approval. If you are eligible for the loan, the company will get you to sign a contract of your agreement. Keep in mind that those different institutions have different ways in processing applications. Do ask carefully how and when the money will be credited to your account when applying.
How to Know if the Loan Company is “Scammy”?
A lot of scammers today are using the name of big credit companies to get money from people. They use sophisticated systems to make them look legit. If you receive an email from a generic email address saying you qualified for a loan with “promotional” low interest, call the company's public number to verify. Be suspicious if the loan offer is more than what you need. Never give out information over the phone or internet even if it looks like from a bank number.
For your peace of mind, it would be best to visit the office or the bank or credit company to complete the transaction and documentation. Many illegal lenders and loan sharks prey on the unsuspecting borrower in need of money by transacting over the phone.