5 ways you can qualify for low-interest loans in Singapore

Stacks of gold coins getting lower and lower to represent low-interest loan rates in Singapore

Low-interest loans certainly sound appealing if you need cash urgently. However, anyone who has tried borrowing money knows it is not easy to get a low-interest loan in Singapore.

You can obtain small loans with low interest by following some basic rules. Here, we share the five things you can do to qualify for the lowest interest rates possible.

What is a low-interest loan?

A low-interest loan is usually a business or personal loan that the lender charges at a competitive rate of interest.

The exact interest rate which the lender charges you is subjective as it is determined by factors such as your income and credit history. The better your credit history, the higher the chance of the lender offering you a lower interest rate.

Where can you get low-interest loans in Singapore?

Another important detail all borrowers should understand is there are two main sources where you can obtain a low-interest loan in Singapore – banks and licensed money lenders.


The most common bank loans in Singapore are home loans, personal loans, car loans, and education loans. Bank loan interest rates for personal loans generally vary between 3.5% and 10.8% per annum, depending on the term, the principal amount, and the borrower’s creditworthiness.

Bank loans with interest rates close to 3.5% per annum can be an attractive option for someone who wants to get a low-interest loan, especially if they can be coupled with other bank offers and deals.

Licensed money lenders

Licensed money lenders in Singapore are heavily regulated by the government. Strict controls around moneylending have created a competitive field for the benefit of borrowers. The most important of these controls is the cap on interest rates. Currently, the maximum interest that a licensed money lender can charge is 4% per month.

There are no lower limits set, but lenders may charge rates as low as 3% per month. This may dip even lower with promotional offers and deals for repeat customers. Some applicants may even be eligible for an interest-free loan.

Before licensed money lenders offer applicants these low rates, they have to check with a governing body called the Moneylenders Credit Bureau (MLCB), which stores data on borrowers’ loans and repayments with all licensed money lenders in Singapore.

5 ways you can qualify for low-interest loans in Singapore with licensed money lenders

Now that we understand the basics, let’s dive into the five things you can do to get small loans with low interest.

1. Maintain good credit

The single most important thing you can do to qualify for a low-interest loan in Singapore from a licensed moneylender or a bank is to maintain good credit.

This is different from keeping a good ‘credit score’. Credit scores are allocated by the Credit Bureau Singapore (CBS), and it is only relevant when you apply for loans from a bank or other major financial institutions.

The relevant agency when borrowing money from a licensed money lender in Singapore would be the Moneylenders Credit Bureau (MLCB). Lenders will submit your information to the MLCB to check your borrowing limit, existing outstanding loan principal amount with other money lenders, total payable amount, repayment records, and other information when you apply for a loan with them.

Note that while MLCB records are the main source of information for a licensed money lender, they may also consider your CBS credit score before approving your loan application.

Two simple rules to help you maintain good credit:

Borrowers with a history of loan defaults may not necessarily be refused a loan from a licensed money lender. However, they are more likely to be charged a higher interest rate as lenders may perceive that they have a higher risk of default.

2. Avoid taking multiple loans

When a licensed money lender in Singapore accesses your MLCB records, they can see the number and total value of all your existing unpaid loans. Multiple concurrent loans are an indication that a borrower is under increased financial stress. This often happens when they are taking loans to pay off existing loans to buy time.

Such loan applicants are at higher risk of defaulting and hence are unlikely to qualify for a low-interest loan.

Avoid taking on new debt until you have settled older ones. If you need assistance to juggle multiple loans, consider a debt consolidation loan.

3. Maintain a stable source of income

Lenders always consider your employment status when assessing a loan application. Consistent employment indicates a steady income flow and reassures lenders that the applicant is likely to repay their debts.

While a formal full-time job is the best option, lenders will also consider income from part-time and casual employment. The Covid-19 pandemic has also led to many lenders relaxing their borrowers’ employment criteria.

Click here to find out how much you can borrow based on your income.

4. Get a co-signer or guarantor

A co-signer or guarantor is someone who agrees to be responsible for repaying a loan. They do not receive any money from the loan but are legally responsible for its repayment if the borrower is unable to make repayment.

A co-signer with a good credit score can help you qualify for small loans with low interest and even other fee waivers.

However, do not treat a co-signer as a blank cheque. A default on your part will damage their credit score and likely create greater damage to your relationship with them. If anything, be stringent about repaying a co-signed loan and handle the debt responsibly.

5. Compare rates from different lenders

There is no one-size-fits-all ‘best’ loan. Different licensed money lenders and banks offer varying loan eligibility criteria and conditions using their own assessment methods. An applicant’s unique financial status, the reason for the loan, loan history, and other factors could lead to one lender offering lower rates than the other.

Your responsibility to yourself as a borrower is to compare quotes from as many licensed lenders and banks as possible. This goes beyond simply reading advertised rates. You must read the fine print to understand all the fees, penalties, and additional expenses that may apply.

Note that most lenders offer lower interest rates and a waiver of certain charges to regular customers.

Apply for a low-interest loan with Galaxy Credit

Galaxy Credit is the ideal place to get a low-interest loan in Singapore. We understand your financial concerns and are committed to offering the best rates and repayment schedules for your circumstances. Walk-in to our office or apply online with us!


While we try to provide the most accurate information on this website, it may not reflect the most current developments. The information on this website may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. All information provided is for informational purposes only and shall not be relied upon as professional advice. We shall not be liable for any loss or damage resulting from the use of this website.


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Whether you are a Singapore citizen, permanent resident, or foreign worker residing in Singapore, securing a personal loan in Singapore has never been easier. As long as you qualify for the type of loan you are applying for, the process is pretty simple, quick, and straightforward. If you’ve reached a tough spot financially and are in need of emergency cash with the lowest personal loan rates, here are some tips you should follow when considering applying for a legal loan in Singapore.

1. Check your credit score

A credit score is used by banks, financial institutions, or licensed money lenders to gauge the likelihood of you paying off your loans on time. If you want to get the lowest personal loan rates, you have to have a substantial credit profile that shows a higher credit score or rating.

The higher your credit score, the more likely you are to get approved for a personal loan in Singapore as it shows creditworthiness. As these credit reports are sourced from a credit bureau, you will also be able to source your own credit report by requesting a copy online or from Credit Bureau Singapore for $6.42.

2. Don’t apply for too many loans at once

For a smooth sailing loan application process, you have to ensure you do not have too many loans running at once. When you apply for too many loans at one go, lenders will raise an inquiry with the credit bureau to evaluate your creditworthiness. These can be considered hard inquiries where a lender is initiating a credit inquiry on behalf of the borrower.

Bear in mind that with each direct inquiry from a legal moneylender, there is a possibility that the loan evaluation process will be further scrutinised. Rather than having multiple credit inquiries, it is much more ideal to figure out the various types of legal loan options available and identify the right fit before applying for a loan.

3. Plan your budget before applying

As with all financial plans, it is best to budget well at the very beginning, before you even apply for a loan. This step is crucial to ensure that you can repay the loan on time to avoid late fees and extra charges. If you have a gauge on the range of monthly instalment payments that you are financially able to commit to, it will be much easier to choose the type of loan in Singapore.

Doing it this way would mean that you would already know the maximum interest fee you can commit to. Budgeting wisely also requires you to look at timelines to help you work out a comfortable repayment agreement or loan tenure.

4. Prepare substantial proof of income

You must have the right documents so that you can have a smooth sailing loan application process. These include your NRIC; proof of income and employment documents such as your last 3-6 months of payslip or income tax notice of assessment (NOA); current credit report; past CPF statements; proof of residence or tenancy agreement; employment letter; employment pass and bank statements (for foreigners).

It is usually not difficult to secure proof of income for employees having a monthly salary arrangement. However, other employment arrangements like commission-based work or self-employment may prove more complex for verifying future income. Regardless of the reason, it is usually a must for borrowers to find a way to prove that they will honour their debt.

If you are applying for a personal loan without formal proof of income, you can consider showing past bank statements that indicate regular payment from an employer or credit card statements to show that you have paid your bills on time. The credit history reflects your past credit management so it can be used as an indicator of creditworthiness. Documentation of annual tax returns from IRAS can also help your cause. You should also protect your credit score to get a higher rating. Lastly, you can also consider providing a larger amount of downpayment to secure a reasonable loan tenure.

Ultimately, applying for a personal loan in Singapore is not difficult. As long as you follow the tips above and ensure you have the necessary documents on hand, you will experience a quick and seamless application and approval process.

Interested in securing a personal loan in Singapore? Find out more about your legal loan options with us.

Your personal loan in Singapore was approved by a licensed moneylender – congratulations! Now comes the challenging part – sticking to the repayment schedule. There are two reasons why it is important to repay your loan as scheduled.

Firstly, there are monetary penalties every time you are late on a payment. This includes:

  • A one-off late payment penalty every time you fail to pay the monthly instalment by the set date. This fee is capped at $60 per month.
  • Interest on the amount due. This is calculated at up to 4% of the amount due for that month (not the outstanding loan balance).

Secondly, the cumulative debt that you incur as a result of these penalties makes it more likely that you will default on future payments. Remember, a failure to meet your financial obligations today can have catastrophic effects on your credit rating for years to come.

But not to worry, we have got your back! Here are 4 simple and proven ways you can use to adhere to your personal loan repayment plan.

1. Adjust the instalment due date

If you are employed full-time and have a constant monthly stream of income, it is important to keep your payday in mind when it comes to repaying your personal loan. Also consider last-minute purchases and emergency expenses, which will affect your repayment schedule.

Once you have a clear idea of when you receive your salary every month, approach your licensed moneylender and ask for a revised due date for your monthly instalments. As there may be administrative expenses involved with the amendment, it is best to be absolutely sure before informing your lender.

2. Know your finances

This method is all about how well you know your finances. Before you can even determine a feasible repayment plan for your personal loan in Singapore, you need to first assess your current income and expenses.

While there are many free apps today that can help ease the burden of recording your daily personal finances, you still need the discipline to keep this habit consistent. Just think of how invaluable this information will be in helping you see where your money is going and how you can cut back on unnecessary expenses in time for your next repayment.

3. Prioritise your debts

Now that you know where to cut back on expenses, the next step is to determine where your income will go. All debts are not created equal and you have to determine the order of which gets paid first and that depends on two factors:

  • Size of each debt
  • The interest rate on each debt

Together, they dictate the amount by which your debt increases if you do not pay them in full. The idea is to gradually climb out of the debt by ensuring that you either maintain or reduce the amount owed.

You can use either the debt snowball or debt avalanche strategy to accelerate debt repayment.

Debt snowball – List all your debts – from smallest to largest – and make the minimum payment every month to prevent further increase in debt. Pay off the smallest debt first as best you can, and make minimum payments to the remaining debts with any money left. Over time, you will pay off that debt, and you can apply the same strategy to the next smallest debt.

Debt avalanche – List all your debts and make the minimum payment on all debts every month. Pay off the debt with the highest interest using any money that remains. Over time, you will pay off that debt, and you can apply the same strategy to the next high-interest debt. In this way, you are essentially decreasing the amount of interest you are paying.

4. Be mindful of your spending

Last but not least, budget carefully. Before taking out a personal loan in Singapore, be sure to assess your current spending and ensure that it doesn’t clash with your repayment plan. This comes with some financial planning and discipline.

If you realise you’re someone who tends to overspend, then it is time for some serious introspection on your finances and addresses the true cause of perpetually being in debt. How you spend is in your control and it is one of the best long-term solutions to having a solid financial future.

Good thing is, we’re here to help you.

Galaxy Credit is a licensed money lender that specialises in helping you secure a personal loan in Singapore. Talk to us today about our loan solutions.


When applying for a personal loan in Singapore, you need to ensure you have all the documents required to get a loan. You should be aware of the documents that are needed and know how much you can borrow. Having your income details and proof of employment on hand will certainly help with your application.

The documents that are required will depend on the bank or moneylender you choose but generally, they will require these essentials:

  • Proof of Income
  • ID copy
  • Employment information, like Employment Pass or CPF statement.

Proof of Income

If you want to borrow money from banks or financial institutions then an income statement will be required. The bank will ask for your income level and salary details so they can check if you qualify for a certain amount of loan.

In short, documents you may need for proof of income includes:

  • Contribution statement to your Central Provident Fund (CPF)
  • Latest income tax Notice of Assessment
  • Latest computerised payslip
  • Bank statement showing salary crediting into your bank account
  • Other income statements as required

ID copy

If you are applying for a personal loan, the lender will ask for a photocopy of your identification card, like your NRIC or Employment pass card just to confirm your eligibility and legal status.

Employment information

If you are applying for an employee loan, then the lender will ask for your employment details such as your Employment pass card or CPF statement. The lender might also ask for proof of employment like an employment contract, job offer letter, and details of salary and bonus.

Tips to secure a personal loan in Singapore

You should carefully evaluate your current financial needs and your earning power. Plan and record your monthly budget and expenditure to establish a monthly repayment plan that you are comfortable with.

Loan Amount

This is the most important factor to consider when applying for a personal loan in Singapore. Knowing the correct amount of loan required will allow you to choose the right type of personal loan. It is also important that you obtain the lowest personal loan rates that suit your needs and try not to surpass your borrowing limit.

Loan Tenure

The loan repayment period is also crucial in determining the length of time you have between monthly instalments. Ideally, you will plan to quickly repay your personal loans and avoid incurring late payment fees and an accumulation of unwanted debts. Remember, the inability to repay your loans on time and in full will eventually affect your credit score.


Besides the obvious interest rate fees, there are also processing fees charged by both banks and moneylenders to process your loan application. Do check thoroughly to determine if other hidden fees are involved as they will affect your total loan amount. Also, clarify on late payment fee charges and their late payment interest rates before signing anything.

Avenues for personal loan promotions

Sometimes, there are special loan deals offered by both banks and licensed moneylenders. Banks, which are typically the big players in Singapore’s finance hub, often advertise personal loan promotions on an ad-hoc basis via their websites, newspapers, financial sites, or social media platforms. Licensed moneylenders, on the other hand, advertise their services on their corporate website, business directories, or via posters at their registered offices.

If you are looking for a flexible and affordable loan in Singapore, visit Galaxy Credit. We offer the lowest interest rates on our loans and have a quick approval process. We have personal loans to cater to your needs. Talk to us and we will help you fill out an online application!