Singapore has a large expatriate population that contributes to the nation’s unique multicultural character. The financial needs of this large group have led to the growth of a flourishing foreigner loan industry. It is no wonder that licensed money lenders are also offering loans for foreigners in Singapore; banks aren’t the only option.
As it stands, most foreigners will find it easier to obtain a loan from private money lenders instead of traditional banks — the latter has more red tape, the strict credit assessment, and much higher income requirements.
This article explains the essentials of a foreigner loan in Singapore, including the documents you need to apply, what to avoid, and how to keep your personal information and finances safe.
Who can apply for a foreigner loan in Singapore?
A foreigner loan in Singapore is exclusively for legal residents of Singapore who are not citizens or permanent residents. Tourists and other foreigners transiting through Singapore are not eligible.
All adult foreigners who reside in Singapore for work or as legal dependents are eligible to get loans from the banks — provided they meet the income requirements and are assessed to be suitable candidates for a loan.
Licensed money lenders in Singapore also offer loans for foreigners. However, some of them may impose more stringent restrictions upon foreign borrowers, while others do not.
Differences between a foreigner loan and loans meant for citizens and PRs
The Singapore financial system is mostly consistent and does not distinguish between residents of different nationalities. However, there are several small but important differences between loans for citizens and PRs and those available to foreigners.
1. Limits on how much licensed money lenders can lend to foreigners
For ease of reference, the revised caps on the supply of unsecured loans to foreign borrowers are summarised in the following table.
| Income level (per annum) |
Supply Caps On Lending To Foreigners | |||
| 300 borrowers with outstanding loans at any one point | 15 borrowers per month | 50 borrowers per year | $150,000 in outstanding loans at any one point | |
| ≥$50,000 | X | |||
| ≥$30,000 and <$50,000 | ✓ | X | ||
| <$30,000 | ✓ | |||
| X – Caps to be lifted; ✓ – Caps remain | ||||
These clauses make it harder for foreigners to get loans from popular money lenders as compared to locals.
2. Documentation required of foreigners
Foreigners will have different ID documents, for example, FIN card and passport vs. NRIC. They also need to prove their residency status and provide details of their employment. We discuss this in detail below.
3. Licensed money lender loan amount available to foreigners
| Borrower’s Annual Income | Singaporeans and PRs | Foreigners Residing in Singapore |
| Less than $10,000 | $3,000 | $500 |
| $10,000 to $20,000 | $3,000 | $3,000 |
| $20,000 and above | 6 times of borrower’s monthly income | 6 times of borrower’s monthly income |
Source: Registry of Moneylenders, Ministry of Law
Take note that the figures shown above are the total maximum amount that a borrower may borrow at any one point across all licensed money lenders in Singapore.
Additionally, bear in mind that foreigners aren’t accepted as guarantors. A foreigner who needs to seek out a loan can try to obtain the loan in his or her name.
What do you need to apply for a foreigner loan from private money lenders?
There are four types of documents a foreigner will need when they apply for a loan in Singapore:
1. Proof of identity
Your FIN card and passport are essential to the application process. Identity verification helps prevent fraud and identity theft.
2. Proof of legal residency
Only legal foreign residents may apply for a foreigner loan. The expiry date on your FIN card, employment pass, or dependent pass helps prove your residency status. You can also submit your latest proof of billing address.
3. Proof of employment
Employed foreigners are much more likely to be approved for a loan as opposed to those who are here on a dependent pass. You can present a letter of employment or a work contract.
4. Proof of income
In most cases, proof of income will be included in a letter of employment or work contract. However, someone such as a dependent spouse who works casually may have access to additional income. Payslips, tax documents and bank statements can help in this regard.
Other factors for foreigners in Singapore to consider before taking out a loan
If you are a foreigner in Singapore in need of cash, a foreigner loan is often your best option. Apart from looking at your loan eligibility in general, here are some of the other things that you should consider before taking out a loan.
1. Are you willing to pledge collateral for a secured loan?
Licensed money lenders in Singapore offer unsecured personal loans, which means that you do not have to pledge a collateral in order to receive the personal loan.
However, licensed money lenders may consider approving a secured loan—such as a car loan or private property loan—if you are willing to put up your car or home as collateral. This can be a good motivator for you to make repayments but you also risk losing your car or property. Decide carefully.
2. Do you have a Singaporean co-signer with spectacular credit who doesn’t mind helping you out?
A co-signer or guarantor is someone who agrees to be responsible for repayments if the main applicant fails. Guarantors who have good credit can secure larger loan principals, lower interest rates, more relaxed terms, and even waiver of some fees and penalties. Take note that foreigners are not allowed to be loan guarantors under the law.
3. Are money transfers from outside of Singapore feasible?
A foreigner loan is a huge responsibility. If you are already in a precarious situation with your finances, it may be too difficult to pay back the money you borrow plus interest, along with other fees and charges.Perhaps, you can consider asking your relatives at home for financial help before you apply for a money lender loan meant for foreigners in Singapore.
It may be better in the long run if they can lend you a hand today. Paying them back with your income further down the road may be easier to deal with than paying a licensed money lender because there is often little to no interest involved.
Convinced that you need a licensed money lender loan for foreigners in Singapore?
There are steps you should follow before getting a money lender’s loan. It is important that you do your homework and only get loans from reliable licensed money lenders. To start, make sure you know how to spot legal lenders from illegal money lenders.
Want a quick and easy way to get loan quotes for easy comparison? CompareSing can help and our services are free-of-charge.
All you have to do is fill out the online form and wait for loan quotes from top licensed money lenders in Singapore. It is always a good idea to compare loan offers before settling on one that suits your needs and circumstances best.
