Can You Get a Personal Loan in Singapore with a Bad Credit Score?
While being in good credit standing is definitely a bonus when applying for any type of loan from traditional lending institutions such as banks in Singapore, it’s not the end of the world if you happen to have a less-than-stellar credit history. Bad credit loans from licensed moneylenders like us can be a financial solution for you.
What is a loan for bad credit?
Simply put, a bad credit loan is created for individuals who may have faced repeated loan rejections from banks and other conventional lending institutions due to their poor credit ratings. Bad credit loans are an alternative way for these individuals to get access to the financial help they need.
Why take out a bad-credit loan with us?
– Competitive interest rates with flexible repayment terms
Whether their credit score is good or bad, we believe every individual should be able to access financial help when they need it. This is where personal loans for people with bad credit scores come in. We are here to improve your cash flow, not to make it impossible for you to manage. Feel free to compare our interest rates with other moneylenders in Singapore – you will realize we are among the most competitive. Talk to us about your requirements – we have a range of flexible repayment terms and are able to tailor a repayment plan that works best for you.
– A licensed moneylender
Rest assured you are dealing with a licensed and legal moneylender who has your own interest at heart. Feel free to drop by our office and fill out a simple application form for your bad credit loan. We will give you a loan eligibility decision no more than a working day or two after the day you apply.
Eligibility, and how to apply for a bad-credit loan with us
Scroll right to view this table
| – Must be at least 21 years old – Must be a citizen or permanent resident of Singapore – Should be employed, or have a recurrent stream of income |
| Documents to prepare: – NRIC – Bank statements for the last 3 months – Latest payslip |
| Documents to prepare: – NRIC – Bank statements for the last 3 months – Income Tax Notice of Assessment for the last 2 years – Latest ACRA business profile – Financial statements of the company for the last 6 months. |
Please visit us to apply personally. For further enquiries, please call 6481 1788.
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- If you want to get a loan with no credit, begin by looking for lenders that accept non-traditional credit histories like rent or utility payments.
- Other loan options for borrowers with limited credit histories include Payday Alternative Loans (PALs), secured loans, and 401(k) loans.
- To build credit from scratch, try applying for a secured credit card or credit-builder loan, or ask to be added as an authorized user on someone else's credit card.
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There are many reasons why you might not have a credit score. On the one hand, you may be young or recently moved to the United States from abroad and haven't had the opportunity to build a credit profile yet.
On the other hand, you may be someone who prefers to pay for things with cash or a debit card and you've simply never applied for a credit card. Having no credit history doesn't mean that you're financially irresponsible. In fact, many people with no credit are incredibly creditworthy individuals.
While having no credit is much better than having bad credit, the reality is most lenders do use credit scores in their lending decisions. And having no credit can make it more difficult to get approved for a mortgage, auto loan, personal loan, credit card, or any other type of credit.
But you may be surprised to learn that it is possible to get a loan with no credit.
How to get a loan with no credit
If you're looking to get a loan without a credit history, here are five strategies worth considering.
1. Look for lenders that consider non-traditional credit histories
Even without a credit score, there may be other ways to prove to a bank that you're a trustworthy borrower. Some lenders will accept alternative data to assess a borrower's risk, like their bank account activity and payment history toward rent, utilities, and other bills.
To get approved for a loan using your non-traditional credit history, you may need to contact a lender directly. It's even better if you can find a bank or credit union that has a local branch near you so that you can talk to someone face-to-face.
If you plan to apply for a loan with a lender that offers manual underwriting, here are a few documents that you'll probably want to collect beforehand:
- Recent W-2s
- Recent tax returns
- Last four to six pay stubs
- Last three to six monthly bank statements
- Rent payment history from the last 12 to 24 months
- Utility payment history from the last 12 to 24 months
2. Apply for a payday alternative loan (PAL) from your credit union
If you need emergency cash and you happen to be a credit union member, you should check to see if it offers Payday Alternative Loans (PALs). PALs are small, short-term loans meant to offer an alternative to high-cost payday loans.
These unsecured loans come with terms of one to six months and borrowed amounts can range from $200 to $1,000. Unlike payday loans, PAL application fees cannot exceed $20 and the maximum interest rate is 28%.
However, you won't qualify for a PAL until you've been a member of your credit union for at least one month. So unless you're already a credit union member, a PAL won't be a good option if you need immediate cash.
3. Obtain a secured loan by putting down collateral
Since unsecured loans don't require any collateral, lenders tend to require that borrowers have strong credit scores in order to mitigate their risk. However, if you're able to put down something of value as collateral, it could help you secure a loan even with no credit.
Here are a few examples of assets that a lender may accept as collateral for a secured loan:
- Real estate (home or undeveloped property)
- Vehicles
- Bank accounts
- Stocks, bonds, or mutual funds
- Insurance policies
- Collectibles
- Gold, silver, or other precious metals
In addition to more lenient credit requirements, secured loans may also offer better interest rates or terms. But the downside is that your collateral will be at risk if you miss a payment or default.
Make sure you weigh the pros and cons of a secured loan before you take one out. And try to steer clear of predatory title loan or pawn shop loan lenders that can place you on a financial treadmill by charging exorbitant rates.
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4. Borrow from your 401(k)
If you have no credit and need quick access to a large chunk of cash, a 401(k) loan could be a legitimate option. But there are several pros and cons that you need to consider before you borrow from your retirement.
The biggest advantage of 401(k) loans is that you won't be dealing with a lender whatsoever so there is no credit score requirement. With a 401(k) loan, you're actually borrowing from yourself, so the "interest" you pay just goes right into your 401(k) account. Plus, as long as you stay with your employer, you'll have up to five years to pay back the loan in full.
If you plan to repay the money quickly, a 401(k) loan could be a far more favorable borrowing choice than a payday loan, title loan, or pawn shop loan. However, know that if you don't replace the withdrawn amount by the due date, you'll have to pay taxes on the funds plus a 10% penalty.
Also, if you lose your job or leave your employer, the entire loan comes due and will need to be paid in full by the due date of that year's tax return. So if your job situation is unstable, borrowing from your 401(k) becomes a riskier move.
5. Add a creditworthy cosigner to your loan application
Adding a creditworthy family member or friend as a cosigner could help you obtain a loan when you have no credit. However, keep in mind that your cosigner's own credit will also be damaged if payments are missed or the loan becomes delinquent.
Entering into a cosigning relationship can be dangerous from both a financial and relationship perspective. If you do decide to ask someone to cosign for you, you'll want to take extra care to make sure that your payments are always made in full and on time.
How to build credit from scratch
If you don't need to take a loan immediately, a better option may be to wait until you've had time to build a credit history. One option for building credit from scratch is to apply for a secured credit card.
Since borrowers have to put up a cash deposit to obtain a secured card, lenders are more willing to offer them to consumers who have limited credit or none at all. And as long as you choose a card issuer that reports to the credit bureaus, your positive payment history can help you quickly begin to build a positive score.
Taking out a credit-builder loan with a bank or credit union is another credit-building option.
Finally, you can ask to be added as an authorized user on someone else's credit card account. Just make sure that the card issuer reports authorized user activity to the credit bureaus.
With each of these options, you may be able to build a solid credit score in six to 12 months, or maybe even faster. And considering the additional borrowing opportunities that could become available to you with strong credit, pushing off your loan application until then might be best if you can afford to wait.
Clint Proctor is a freelance writer and founder of WalletWiseGuy.com, where he writes about how students and millennials can win with money. When he's away from his keyboard, he enjoys drinking coffee, traveling, obsessing over the Green Bay Packers, and spending time with his wife and two boys.
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