Singapore has consistently been ranked one of the best places to live in the world. However, the price to pay for such high standards of living is that residents here face a high cost of living that’s only creeping up. It is not surprising, then, that many turn to loans to finance their lifestyles and financial needs.
Thankfully, personal loan rates in Singapore largely remain affordable, which — along with borrowing limits on unsecured credit and guidelines on Singapore licensed money lenders’ interest rates — help borrowers use debt in a responsible manner.
Here is an overview of various common loan types, and their latest loan interest rates in Singapore, 2025 edition. To give you a more complete picture, we’ve also included crucial information on licensed money lender interest rates you should know about.
What is the admissible licensed money lender interest rate in Singapore?
In accordance with rules established by the Registry of Moneylenders, the admissible licensed money lender interest rate in Singapore is 4% per month for all types of loans, with the exception of business loans.
This standardised limit on licensed money lender interest rate applies no matter whether (i) the loan in question is a secured or unsecured loan, and (ii) the borrower is a low-, mid- or high-income earner.
Similarly, money lender late interest rates are also capped at 4% monthly by law. Take note money lender late interest rates can and should only apply to the overdue amount that’s repaid late, nothing less, nothing more. Legal lenders are not allowed to charge late interest on outstanding loan amounts that aren’t due for repayment.
Private money lenders’ interest rates aren’t all the same
While there are licensed money lenders with low interest rates, definitely take your time to research and compare your options as their interest rates can vary. Some private money lenders’ interest rates may be more competitive than others’.
What is the conventionally charged licensed money lender interest rate in Singapore?
While every lender is different, the conventionally charged licensed money lender interest rate in Singapore hovers around the 2-4% monthly mark.
How are licensed private money lender interest rates computed?
Licensed private money lender interest rates are computed using the reducing balance method — as opposed to the flat rate method where a flat rate interest is calculated based on the original principal loan sum and split equally across the number of instalments in the loan tenure.
When employing the reducing balance method, interest is calculated based on the principal amount that remains outstanding. As the loan progresses and payments are being made, the outstanding principal amount decreases. By extension, this also means that the interest calculated for each payment will decrease over time.
Example:
You’re repaying a S$1,000 loan over 6 months, at a 4% monthly interest rate.
The first month’s interest is S$40.00, computed by multiplying 4% and the principal loan amount of S$1,000.
The second month’s interest is S$33.97, computed by multiplying 4% and the principal balance amount of S$849.24.
| # | Payment | Interest | Principal | Principal Balance |
| 1 | 190.76 | 40.00 | 150.76 | 849.24 |
| 2 | 190.76 | 33.97 | 156.79 | 692.45 |
| 3 | 190.76 | 27.70 | 163.06 | 529.39 |
| 4 | 190.76 | 21.18 | 169.58 | 359.80 |
| 5 | 190.76 | 14.39 | 176.37 | 183.44 |
| 6 | 190.77 | 7.34 | 183.44 | 0.00 |
Tip: If all else is equal, the total interest payable on a loan that utilises the reducing balance method will be less than that of a loan that utilises the flat rate method.
Besides money lender interest rates, what fees can lenders charge?
Apart from money lender interest rates and late interest rates, licensed lenders have to abide by strict fees and charges set by the government.
- Loan processing fee: Equal or less than 10% of the loan principal
- Late repayment fee: Equal or less than S$60 for every month of late repayment on record
- Legal fees: As ordered by the court, when the lender makes a claim successfully for purposes relating to loan recovery
Is there a limit on the fees and money lender interest chargeable?
Yes, many may not be aware of this but there is a limit on the fees and interest amounts legal lenders can charge.
Between the loan interest, late interest, loan processing fee and late charges, a borrower’s debt can quickly balloon out of control. This is why it’s a good thing the authorities have imposed one final guardrail.
By law, the total interest, late interest, loan processing fees and all late fees that apply to late repayments cannot be more than the original loan principal amount.
Example
If your original loan principal amount is S$20,000, the total interest, late interest, loan processing fees and all late fees that apply cannot sum up to go beyond S$20,000. This is true no matter how long you stay in debt or skip your repayments.
Latest loan interest rates in Singapore
| Type of loan | Interest rate |
| Home loans | 2.30% to 4.88% per annum |
| Car loans | 2.78% per annum |
| Education loans | 4.38% to 4.5% per annum |
| Renovation loans | 4.08% to 5.08% per annum |
| Personal loans | Banks: 1.90% to 5.42
Licensed money lenders: Up to 4% per month |
Sources: Redbrick, MoneySmart, Personal Loan Finder, Various banks’ websites
The figures in the table above are meant to serve as a quick reference for the common types of loans available in Singapore. Please note that the actual interest rate offered to you will depend on several factors, including your income level, the ongoing promotions, and — for bank loans — your credit score.
Also, the interest rates shown above are as advertised as of time of writing. Be sure to check the Effective Interest Rate of your loan for a more accurate gauge of your cost of borrowing for bank loans.
Home loan interest rates in Singapore
At the time of writing, one of the cheapest home loan interest rates in Singapore isn’t from a bank or a private lender — it’s the Housing Development Board. That’s right, the HDB home loan, which is offered only to those buying an HDB flat, stands at a fixed rate of 2.6% per annum. While this concessionary home loan interest rate may change in the future, it is 2.6% per annum for now.
In contrast, banks’ home loan packages are spiking towards a 20-year high; fixed-rate offers have also been largely withdrawn, leaving homeowners with floating-rate deals.
For those unfamiliar, home loans come in two versions — fixed-rate and floating-rate.
A fixed-rate home loan (such as the HDB home loan) means your monthly instalments will remain the same all the way throughout.
Home loan interest rates in Singapore can and will fluctuate in the case of a floating-rate home loan. With this type of home loan, your monthly payments will fluctuate over time as interest rates fluctuate. This can mean paying less when interest rates are low, but also having to pay significantly more for outstanding mortgages when interest rates increase. We are in a high-interest rate environment at the moment.
To attract customers, banks and other lenders may offer low or fixed interest rates for the first year or two, with the remainder of the loan following a floating-rate structure. This will increase your home loan instalment payments down the line, on top of the risk of having the cost of your home jacked up with the rising housing loan interest rates. Always pay extra attention to the housing loan details in full — not just the seemingly attractive fixed, low interest rate for the first or second year of the loan tenure!
As home mortgages typically stretch 10-20 years or more, be sure to weigh your options carefully before signing up.
Car loan interest rates in Singapore
The car loan interest rate in Singapore averages just under 3% per annum, which is a mercy considering the neverending rise in Certificate of Entitlement (COE) prices.
Car loans in Singapore have a maximum tenure of seven years, and you may borrow up to 70% of the cost of the vehicle.
Note that you may be able to get slightly lower car loan interest rates in Singapore for electric vehicles, while second-hand or used cars usually attract a higher interest rate.
Education loan interest rates in Singapore
Education loans are commonly used to finance the cost of overseas tertiary studies, which can often cost a lot, owing to the lack of subsidies. There are many attending local tertiary institutions that rely on education loans, too. Local tuition fees aren’t cheap to say the least.
However, as higher education correlates with better career prospects, study loans can be considered good debt; you’re making an investment in your future.
At present, education loan interest rates in Singapore are pegged at around 4.2% to 4.5% per annum. An adult guarantor is required when applying for an education loan, and the maximum tenure is usually up to 10 years.
Some education loans offer deferred payment, which means you can defer repaying the principal sum and interest until you enter the workforce. Other education loans may allow you to pay only the interest while studying and then the principal and interest after graduation.
While those who are studying full-time may find deferred payment easier to cope with, they will have to contend with higher monthly payments when it’s time for them to pay back their study loan. Be sure to do your research to find the most suitable education loan interest rate and package for your needs!
Payday loan interest rates in Singapore
Need access to urgent cash but payday isn’t anywhere near? Consider getting a payday loan — think of it as a cash advance. The payday loan interest rate that money lenders charge varies widely, with some only charging administrative fees but no interest while others may charge up to 4% monthly.
We do not know the payday loan interest rate banks would charge as they do not offer payday loans — banks offer cash advances instead. You can only get your hands on a payday loan from authorised lenders in Singapore who offer them.
Renovation loan interest rates in Singapore
Currently, renovation loan interest rates in Singapore hover around 4% to 5.1% per annum. The average renovation loan interest rate is quite a bit higher than a personal loan interest rate that’s on the lower end, so you may be tempted to use a personal loan instead of a renovation loan to pay for your big-ticket home renovation works, alongside furniture and appliances.
Prefer a traditional renovation loan? Bear in mind renovation loans can only be used for home renovation works, which excludes pricey furniture and appliances that add up quickly. This is enforced in two ways.
Firstly, you will need to provide an official quotation from a contractor or interior designer that spells out the renovation work to be covered under the loan, and your bank may also require visual proof of the completed works in exchange for granting you the loan.
Secondly, renovation loans are capped at S$30,000 — no matter how high your income may be — making it even more important to prioritise your home renovations.
As such, you may need to set aside a different budget (or take out a personal loan, see below) for furniture and home appliances.
Personal loan interest rates in Singapore
Personal loans are perhaps the most flexible type of loans in Singapore, given that you are free to use them in any way you wish. Once your loan is approved and the money disbursed, there are no further requirements to fulfil — save paying your monthly loan instalment before the due date.
You can get a personal loan from two categories of lenders — banks and licensed lenders — and there are differences between both, summarised in the table below.
| Bank’s personal loan | Licensed money lender’s personal loan |
| Interest: 1.90% to 5.42% per annum | Interest: Up to 4% per month |
| Requires credit checks; poor credit score may result in higher interest, or even disqualify you as a borrower | Requires minimum credit checks; can qualify even with a bad credit score |
| Minimum yearly income of S$20,000 | No minimum yearly income |
| Loan tenure between 1 and 7 years | Loan tenure up to 12 months |
In short, banks’ personal loans offer lower interest rates and longer loan tenure, but have stricter eligibility requirements, including minimum annual income.
On the other hand, licensed lenders’ personal loans have a higher interest rate of up to 4% per month. Loan tenures are also shorter, commonly up to 12 months. However, there is no minimum annual income requirement, and only minimum credit checks with the Moneylenders Credit Bureau (not Credit Bureau Singapore) are required.
Another important difference to note is the length of time until you receive your loan. As they have more checks and approvals to clear, banks will typically take a few days to disburse your loan.
In contrast, licensed lenders can process your loan within the same day; all you have to do is to apply for your loan online, wait to receive an offer, and then pay a visit to the licensed lender’s office to view and sign the loan contract. Thereafter, the loan will be disbursed on the spot.
But, if you’re ever unsure on how to apply for loans, don’t hesitate to reach out to a loan officer, they’re always happy to assist with any enquiry you may have.
While there are many cheap loans in Singapore out there, be sure to consider carefully your needs and personal circumstances when deciding between a bank loan, or a personal loan from a licensed lender.
Only work with money lenders that respect your rights
Under official money lender guidelines, the onus is on money lenders to explain clearly the loan interest, fees, charges, and other important terms to borrowers. Responsible money lenders must ensure that borrowers fully understand the loan they are signing up for.
Reliable money lenders respect your rights as a borrower, including the right to not to be unfairly charged or overcharged, so it is well worth your time to seek them out.
Looking for licensed money lenders with fair interest rates?
Synergy Credit provides instant cash loans with attractive personal loan interest rates of 2.27% monthly, as well as accommodating repayment terms that go up to 12 months. We are an authorised loan company that makes sure every loan application is clearly explained in easy-to-understand jargons.
We are more than happy to clarify anything you may be unsure of, and we’ll advise you on the best loan package for your circumstances. Get in touch with us to learn how we’re able to assist with your financial needs and help in your search for competitive personal loan interest rates in Singapore. Ready to embark on your loan journey with us? Simply apply for a loan today.
About the Author
Huiting is passionate about all things related to current affairs and the finance industry. With years of experience in tow, you can rest assured that the content she creates will always have an extra insightful touch.
