Can You Get a Personal Loan in Singapore with a Bad Credit Score?

You’re running into a cash flow situation and want to apply for a personal loan. But the mistakes of your past have come back to haunt you in the form of a bad credit score. With a bad credit score, it can be challenging to borrow money from a bank. What options do you have? And what can you do to improve your credit score?

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What Is a Bad Credit Score?

In Singapore, the Credit Bureau Singapore is in charge of scoring individuals. The 4-digit score is based on your past payment history, and indicates the likelihood of you defaulting on (i.e. not repaying) your loans.

To find out if you have a bad credit rating, go to Credit Bureau Singapore Report to obtain your credit history report. The report is chargeable at $6.42 (inclusive of GST).

The highest score on the scale is 2,000 while the lowest score is 1,000. On this scale, a score of 1,000 to 1,723 would count as a bad credit rating, and is regarded as risk grade "HH".

A few factors can affect your credit score. These include: how much credit you have used, how many recent credit facilities (credit cards included) you have applied for, number of enquiries to your credit score and frequency of late payments. Also, the longer you have had a good credit account history, the better your score.

It's impossible to tell which personal loans are available to individuals with bad credit scores as the approval process depends on many factors and isn't always transparent. But, we will recommend some tips on how to repair your credit score and some places to get cheap and small loans.

3 Ways to Improve a Bad Credit Score

Pushing up your bad credit score is totally possible, but it will take time - at least months of consistent effort. It's best to work on improving your credit score as early as possible, so you're not stuck in a bind if you need cash for an emergency. Here are 3 things you can do to boost your credit rating.

  • Go for Credit Counselling

    A good place to start working on your credit score would be to set up an appointment with Credit Counselling Singapore. This non-profit can help you work through the root of your debt issues as well as help arrange debt negotiation meetings with banks to tackle your loans.

  • Restructure Your Debt

    Most individuals with bad credit scores have existing debt. If that describes you, you will want to restructure your debts using a Debt Consolidation Plan or a balance transfer. These schemes allow you to break down high-interest debt such as credit card bills into manageable, lower-interest loans.

  • Make Full Repayments

    By sticking to your repayment schedule - paying in full and on time - your credit score will gradually improve. Not only do you clear your outstanding debt, your payments also signal that you are a responsible borrower.

Personal Loan vs Debt Consolidation Plan - What's the Difference?

We mentioned restructuring your debt with a Debt Consolidation Plan earlier. This is a product that's different from a regular personal loan. Instead of disbursing cash into your bank account, the Debt Consolidation Plan provider will repay your existing unsecured debts, therefore consolidating multiple loans/credit card bills into one single repayment plan. You may be able to qualify for a Debt Consolidation Plan even if your credit score is too poor for a personal loan.

How to Apply for a Personal Loan with Bad Credit Score

Regardless of whether you have a good or bad credit rating, the procedure for applying for a personal loan is pretty much standard. However, if you have a bad credit rating, there's a risk of getting rejected. Here are some tips for managing the application process.

  • Make Sure You Qualify

    Eligibility criteria varies slightly from bank to bank, but most providers only lend to those between the ages of 20 years old and 65 years old. If applying with a bank provider, you will need to prove that you earn at least S$20,000 a year (for locals) or S$40,000 (for foreigners).

  • Make a List of Providers

    Minimum income requirements differ from provider to provider, so check to see which ones you qualify for. You can rule out the ones that don't cater to you. Of the banks who are willing to lend to you, check if they offer guaranteed interest rates, so you do not get surprised with a sky-high rate based on your credit score.

  • Apply One by One

    The results of your application may vary depending on the provider. Some providers will quote a higher interest rate if you apply with a bad credit score and/or low income. However, it's best to avoid mass-applying for a loan at multiple providers, because this signals to the credit bureau that you are "credit-hungry" and might impact your credit score further. It's better to apply for your loan one by one.

Best Personal Loans in Singapore for Bad Credit Score (2020)

Lowest EIR of 7%! Plus up to $300 Cashback!

HSBC Personal Loan

  • Interest Rate*

  • Processing Fee

MoneySmart Exclusive: Get up to $300 Cashback!

Online Promo: Min. loan repayment of 1 year to Max. of 7 years

Online Promo: *E.I.R: Effective Interest Rate of 7.00% p.a. is applicable for all loan tenors

HSBC Personal Loan offers the lowest interest rate at the moment at 3.7% per annum, with $0 processing fee. Its Effective Interest Rate of 7% p.a. is the lowest on the market, and it's guaranteed as long as you apply for the loan through MoneySmart. You need not worry about your bad credit score pushing up your interest rate.

HSBC also offers the longest loan tenure in Singapore - up to 7 years, whereas other providers cap it at 5 years. This is good if you have trouble managing large monthly repayments, but bear in mind that you'll end up paying more interest the longer you borrow.

To qualify for this loan, Singapore citizens and PRs must earn S$30,000 a year (if salaried) or S$40,000 (if self-employed or commission-based). Foreigners must earn at least $40,000 in annual income and possess an employment pass of one-year validity to be eligible for application.

The main drawback for HSBC Personal Loan is that it takes quite a while to get your loan approved and disbursed - up to 5 working days. You do not need an HSBC bank account or credit card to apply for this loan, though.

0% interest rates for 1 year tenure

Citibank Quick Cash (New Loan Customers)

  • Interest Rate*

  • Processing Fee

Online Promo: *E.I.R: Effective Interest Rate of 8.50% p.a. based on 3 Year loan tenure

Another personal loan with competitive interest rates is Citibank Quick Cash, with an advertised interest rate of 4.55% p.a. (EIR 8.5% p.a.) with no processing fees for new customers. There are also limited-time-only promotional interest rates for certain loan tenures and loan amounts, so check MoneySmart for the latest promos.

Like HSBC, Citibank's personal loan interest rates are guaranteed for those who apply successfully through MoneySmart, so you don't have to fear a bad credit score bumping up your interest rate.

To qualify for this loan, Singapore citizens and PRs must earn S$30,000 a year while foreigners must earn at least S$42,000. The minimum income threshold is a little higher than that of HSBC.

To get a Citibank personal loan, you would need to have a Citibank Ready Credit or Citi credit card. You can apply for both concurrently in one form through MoneySmart. The loan can be disbursed in 1 working day if you have a Citibank deposit account as well. If not, expect it to take up to 5 working days.

  • Interest Rate*

  • Processing Fee

Online Promo: Get up to S$1,200 Cashback when you apply with 3-5 years loan tenure for loans above $15,000!

Another provider that offers a guaranteed interest rate is UOB. UOB Personal Loans have a decent 4.25% p.a. interest rate for all successful applications, which isn't too shabby if you have a less-than-stellar credit rating.

However, note that UOB personal loans are only open to Singapore citizen or Permanent Residents, earning at least S$30,000 a year. You also need to be an existing UOB Credit Card or CashPlus customer to apply; if not, you can apply for both together via MoneySmart. If you are an existing UOB customer, you can get instant approval if you apply between 8am and 9pm.

Calculate Your Personal Loan Payments

Want to know how much you'll need to pay every month with your personal loan? Head to MoneySmart's personal loan calculator and comparison tool to figure it all out. All you need to do is input your details and desired loan amount and tenure, and we'll automatically find the best options for you.

What If Your Personal Loan Gets Rejected?

After all your effort in comparing interest rates, loan packages and compiling your supporting documents, you get a negative answer from all the bank providers due to your credit score. Bummer. Don't be discouraged - here are a few alternatives you can try.

  • Step 1Smaller Personal Loans

    With a bad credit score rating, banks may not be able to trust you with large sums. You'll have better chances if you apply for a small loan first. Once you are guaranteed the loan, make sure you repay faithfully and on time. This sends "I'm a responsible borrower" signals and will improve your credit rating over time.

  • Step 2Financial Institutions

    If Step 1 didn't work, you can try looking into non-bank financial institutions such as Hong Leong Finance and Singapura Finance. While banks are stricter with eligibility requirements, these financial institutions may be more flexible. These institutions are registered with MAS and some are as established as banks. They usually offer a range of loan options so feel free to approach them for advice.

  • Step 3Licensed Moneylender

    Moneylenders are a last resort only if you have exhausted all the other options. Try not to go to licensed moneylenders as their interest rates are sky high. It is very difficult to get your debt under control if you have to keep paying high interest rates. Of course, for your and your family's safety, you should NEVER approach unlicensed moneylenders.

Frequently Asked Questions

Will banks give loans with bad credit?

If you have a bad credit score, it indicates to the bank that you are likely to default on your payment. Thus, it is highly likely that banks won’t loan you money.

Can I get a consolidation loan with bad credit?

This depends on your nationality, age, annual income and balance to income ratio. The balance to income ratio is calculated by total unsecured loans over average monthly income. Generally, debt consolidation plans are for individuals with debt equivalent to over 12 months of their monthly income.

Do I have a bad credit rating?

To find out if you have a bad credit rating, go to Credit Bureau Singapore Report to obtain your credit history report. The report is chargeable at $6.42 (inclusive of GST).