Personal Loan 101

Thinking about getting a personal loan to fix up your home, start a business, manage credit card debt, or go on a vacation?

Personal loans are extremely flexible and often lower interest rates than credit cards. The best part? With most personal loans, you don’t need to worry about putting up anything as collateral.

If you’ve been thinking of getting a loan, you’re probably asking yourself how much can you borrow on a personal loan. However, the answer is not as simple as you think.

In this article, we will delve deeper into the basics of personal loans in Singapore and guide you through the process of determining how much you can borrow.

Here at OMY Singapore, you will discover the following:

Factors That Affect How Much Can You Borrow On A Personal Loan

When it comes to personal loans, there are several factors that can affect how much you can borrow. We’ll discuss them below.

Credit score

This is a big deal for banks and financial institutions. The better your credit score is, the more money loan providers might be willing to lend you. But if your score isn’t high, some banks may hesitate to grant you an unsecured loan or approve your loan without a co-borrower.

More From OMY: Secured Vs. Unsecured Loan: What Should You Choose?


When you apply for a personal loan, you will be asked to submit your proof of income. If you have a steady income and a high salary, unsurprisingly, you will be eligible for a higher loan amount. Keep in mind that most banks also have a minimum income requirement so if you don’t meet this, your application may be denied altogether.

Another reason why your income is so crucial is because banks want to know how much debt you can handle. They check your debt-to-income ratio, which ensures you’re not drowning in debt. Ideally, this number, including the new loan, should stay under 36% of your total monthly income.

Other debts

If you already have a lot of debt, banks might be cautious about lending you more. If this is the case, it’s a good idea to try and pay some of it off before applying for a personal loan.

How Much Can You Borrow On A Personal Loan in Singapore?

Now that you know that there are several factors that can affect how much you can borrow on a personal loan, let’s dive into the specifics of how much you can actually borrow in Singapore.

For unsecured personal loans, your borrowing capacity might extend up to six times your monthly income. In contrast, secured personal loans depend on the value of your collateral.

Keep in mind that the Monetary Authority of Singapore (MAS) has established guidelines for how much can you borrow on a personal loan.

As of 1 June 2019, the maximum limit for unsecured loans, including personal, education, and renovation loans, as well as credit card lines and debts, is 12 times your monthly income. So if you’ve already borrowed up to 10 times your monthly income, your potential loan amount would be capped at two times your monthly income. Going over this threshold means you’ve reached the borrowing limit.

Eligibility Requirements for Personal Loans in Singapore

Securing a personal loan isn’t one-size-fits-all in Singapore. The eligibility criteria may vary across different loan providers. However, here are the common qualifications for accessing the best personal loans:

  • You must be a Singaporean, permanent resident, or a foreigner
  • Age bracket: 21 to 60 years
  • Singaporeans or PRs should have an income exceeding $20,000 annually
  • Foreigners need to earn a minimum of $40,000 to $60,000 annually

In addition, banks and financial institutions may seek proof of a stable income. They may also require borrowers to have at least one year of continuous employment. As stated above, your credit history will also be examined.

What Should You Consider When Applying For A Personal Loan?

After knowing how much can you borrow on a personal loan, here’s a look at the various factors you should assess to determine whether or not a personal loan is the right financial decision for you.

Interest rates

Interest rates can vary significantly depending on the lender, and can have a major impact on the overall cost of your loan. Be sure to shop around and compare rates before settling on a loan.

Loan tenure

Another crucial factor to consider when applying for a personal loan is the loan tenure. The loan tenure refers to the length of time you have to repay the loan.

Generally, longer loan tenures mean lower monthly payments, but higher interest rates. On the other hand, shorter loan tenures mean higher monthly payments, but lower interest rates. Pick a loan tenure that works for your budget and financial goals.

Fees and charges

In addition to interest rates, personal loans often come with fees and charges, such as application fees, processing fees, and early repayment fees. Read the fine print and understand all the fees and charges associated with the loan before signing any agreements so avoid any confusion down the line.


If you’re considering a secured personal loan, you’ll need to have collateral to secure the loan. This can be anything from your home, car, high-value assets, or term deposits, among many others. Make sure that you’re fine with losing your collateral in case you’re unable to repay the loan.

Repayment plan

Lastly, have a clear repayment plan in place before taking out a personal loan. Consider your current and future financial state and determine if you can comfortably make the monthly payments on time. You may use a loan calculator to help you plan your finances.

Falling behind on loan payments can lead to late fees and damage to your credit score so be realistic and responsible when taking out a personal loan.

More From OMY: How To Improve Your Credit Score In Singapore

Is It Possible To Take Multiple Loans In Singapore?

Yes. It’s definitely doable. As mentioned above, it should still be in line with the cap mandated by the Monetary Authority of Singapore (MAS) which is set at 12 times your monthly income.

Consider this example:

Person A has a S$6,000 monthly income and no outstanding unsecured debt. Considering this, he could potentially access personal loans totaling $36,000. This could be divided into six loans of $6,000 each or two loans of $18,000.

A Word From OMY

When it comes to taking out personal loans in Singapore, carefully consider your financial situation and goals before making any decisions. While it’s possible to take out multiple personal loans, it’s crucial to ensure that you can comfortably make the monthly payments and that you’re not overextending yourself financially.

Now that you know how much can you borrow on a personal loan, you’re finally ready to explore the possibilities of what you can do with that money. Want to see tailored personal loan offers for you?Click here to get started!

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