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. It is not surprising, then, that many turn to loans to finance their lifestyles and financial needs.
Thankfully, loan interest rates in Singapore largely remain affordable, which – along with borrowing limits on unsecured credit and guidelines on moneylenders’ interest rates, fees and charges set by the government – help borrowers use debt in a responsible manner.
Here is an overview of various common loan types, and the latest loan interest rates in Singapore 2023.
Latest Singapore loan interest rates
| Type of loan | Interest rate |
| Home loans | 2.6% to 5% per annum |
| Car loans | 2.78% to 2.98% per annum |
| Education loans | 4.5% to 5.88% per annum |
| Renovation loans | 3.88% to 4.18% per annum |
| Personal loans | Banks: 3% to 6.52% per annum
Licensed moneylenders: Up to 4% per month |
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 income level, ongoing promotions, and – for bank loans – your credit score.
Also, the interest rates shown above are as advertised. Be sure to check the Effective Interest Rate of your loan for a more accurate gauge of your cost of borrowing.
Home loan interest rates in Singapore
At the time of writing, the cheapest home loan isn’t 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.
In contrast, bank home loan packages are spiking towards a 20-year high, Fixed-rate offers have also been largely withdrawn, leaving homeowners with floating-rate deals.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.
A floating-rate home loan, however, means your monthly payments will fluctuate over time. This can mean paying less when interest rates are low, but also having to pay significantly more for outstanding mortgages when interest rates increase.
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 payments down the line, on top of the risk of having the cost of your home jacked up with the rising house loan interest rates.
As home mortgages typically stretch to 10 years or more, be sure to weigh your options carefully before signing up.
Car loan interest rates in Singapore
Interest rates for car loans average 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 cheaper car loan rates for electric vehicles, while second-hand cars will 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. 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 packages are priced at around 4.5% to 5.88% 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 need only pay the interest on the loan while studying, and can defer paying down the principal sum until you enter the workforce.
While those who are studying full-time may find deferred payment easier to cope with, they will have to contend with higher monthly payments for the remainder of their loan tenure. Therefore, it is beneficial to pay off as much of your loan as early as possible.
Renovation loan interest rates in Singapore
Currently, renovation loans in Singapore have interest rates of around 4% per annum. This is quite a bit lower than a personal loan, so you may be tempted to use a renovation loan to pay for home furniture and other big-ticket items.
However, renovation loans can only be used for home renovation works, which excludes furniture and appliances. 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 deposited, 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 moneylenders – and there are differences between both, summarised in the table below.
| Bank personal loan | Licensed moneylender personal loan |
| Interest: 3% to 6.52% 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 annual income of S$20,000 | No minimum annual income |
| Loan tenure between 1 to 5 years | Loan tenure up to 12 months |
In short, bank personal loans offer lower interest rates and longer loan tenure, but have stricter eligibility requirements, including minimum annual income.
On the other hand, licensed moneylender 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 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 moneylenders 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 moneylender’s office to view and sign the loan contract and terms. Thereafter, the loan will be disbursed on the spot.
While there are many affordable loans 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 moneylender.
Synergy Credit offers fast cash loans with low interest rates of 2.27% per month, and flexible repayment terms of up to 12 months. Get in touch with us and find out how we can help with your urgent financial needs today.
