In times of emergency, a personal loan can come in handy. But what happens when you don’t have proof of income, which is a top requirement for personal loan approvals in Singapore?
Applying for a personal loan with no income proof may sound like a tall order, but it’s possible. In Singapore, you only need a few requirements.
This article explains what you require to apply for a personal loan with no income proof, and more.
How Much Can You Borrow With A Salary?
The maximum amount you can borrow will depend on your salary and your choice of lender.
You can either borrow from a bank or a licensed money lender. Both types of lenders have varying interest rates and repayment schedules.
Banks may grant personal loans with lower interest rates, between 5-6% yearly, and may offer large loan amounts compared to licensed money lenders.
If your credit score is excellent, you may get a huge loan amount from banks even if you earn a low income. But this may result in high interest charges.
Licensed money lenders charge interest rates of up to 4% per month. But they tend to have fewer eligibility requirements than banks.
Any bank in Singapore will be reluctant to give a personal loan to a Singaporean or permanent resident (PR), or foreigner residing in Singapore whose annual income is less than $30,000 and $40,000, respectively.
That said, even if you meet the required annual income, your loan application will only be successful in Singapore if you present the relevant documents to your lender.
Here are the documents that you’ll need for your personal loan application:
Proof Of Income
You must submit your payslips, CPF contributions, employment contract, or income tax statements. The more income you have, the more lenders are likely to offer you a higher loan amount.
Typically, your income helps lenders determine how much to lend you. You can show three months’ payslips and your CPF contribution history statements.
If you have no CPF contribution, your lender may offer a higher loan amount.
Proof Of Residence
You can provide a copy of your utility bill that was received within the last six months. A credit card statement or tenancy agreement can also help.
Proof Of Identity
A Singapore citizen or a PR must have an NRIC, while a foreigner may present an Employment Pass and passport.
If you need cash urgently and want to enjoy more flexible repayment terms, you can consider borrowing from licensed money lenders.
They can offer you a personal loan with no income proof in Singapore.
How Can You Get A Loan Without Income Proof?
As mentioned, it’s possible to get a personal loan with no income proof.
A good example is a self-employed person who needs cash urgently or an individual who has just started working.
Nevertheless, even without standard income proof, you need a few requirements to prove your ability to repay your loan.
Here are some alternative documents you can use to get your loan.
Your employer may offer you confirmation of your employment via an employment letter if you have just been employed. You can use it to prove you will start earning an income soon.
This could also be an option for anyone who is returning to the workforce after a long time.
To be valid, your employment contract must include relevant details about your company and salary information and be duly signed.
Income Tax Statements
You are taxed on income accrued in or derived in Singapore from:
- Self-employment profits
- Income from investments such as rental property, dividends, or interest
- Royalties or premiums
- Profits from businesses or any trade
You can also provide other sources of income from non-taxable income that don’t arise from business carried out in Singapore.
A good example is freelancing work obtained from foreign clients, gains on foreign exchange on capital transactions, or other income exempt from tax, such as foreign-sourced dividends.
Notice Of Assessment (NOA)
The Inland Revenue Authority of Singapore (IRAS) prepares taxpayers’ details and provides a document that shows the tax assessment conducted in a particular year upon request. The document only includes what an individual submits for income tax purposes.
To get the document, access myTax Portal using Singpass or Singpass Foreign Account details. Download your tax bills for the current year or the last three years.
Or you can visit IRAS to get the physical document.
Have A Good Credit Score
If you have had previous loans and paid them on time, you can be assured of a good credit score. Even without any proof of income, this gives a lender confidence that you can repay a loan.
If your credit score is not ideal, it could be affected by the following:
- Poor debt payment history
- Taking on too much debt
- Applying for new credit within a short period of time
So even if you have all the necessary documents, a poor credit score will minimise your chances of getting a personal loan with no income proof.
Fortunately, there are ways you can improve your score. You can start making timely payments and avoid making multiple loan inquiries within a short period of time.
You also should not have too many credit facilities open.
What To Do If You Are Unemployed But Need A Loan
If you’re unemployed and need to ease your financial burden with a loan, you have a few options. Most licensed money lenders will agree to offer an unemployed person a loan in Singapore. You can try to:
Apply For A Joint Application
To boost your loan eligibility, apply for a loan using a co-borrower or guarantor such as your spouse or friend, who has the required annual salary and a healthy credit score.
Your loan will be issued in both names if your application is approved.
Show The Amount Of Assets You Owe
It’s good if you have income-earning assets. This could be income from certificates of deposit, rent income, shares, etc. The loan amount you get will be pegged to the value of such assets.
With these documents, your lender will likely be convinced that you can repay the loan with the cash earned from your assets.
Consider Applying For An Unsecured Loan
If you have no income, having collateral helps you to stand out. You can use any asset such as your car, HDB flat, etc.
Use Your Good Credit Score
A healthy credit score is a plus to any lender. So use it to your advantage.
Approach Your Nearest Social Service Office
One good example is the ComCare Interim Assistance Scheme. If you cannot secure a job or have little to no savings for your daily needs, the scheme can help.
The staff will assess your circumstances and needs, and offer you help accordingly.
For the application, you will need to provide the following:
- Your NRIC or birth certificate, as well as that of your family members
- Other supporting documents (e.g. your latest utility bill or your latest employment or termination letter)
- Latest bank statement
To apply for a loan and have it approved, you need to look for the best lenders.
Where To Apply
Over the years, licensed money lenders have provided easier and faster access to credit. So if you can’t meet a bank’s eligibility criteria, you can choose to work with a licensed money lender.
Always make sure you’re not dealing with a loan shark by confirming that your lender’s name is on the Ministry of Law’s list of licensed money lenders in Singapore.
As long as you’re a Singaporean or a PR who is earning at least $20,000 annually or a foreigner with a yearly income of $40,000, you can apply for a low-income personal loan.
Each bank’s requirements* may vary:
- DBS Personal Loan: Open to any Singapore citizen or PR who is an existing DBS customer. The interest rate is 3.48% per annum.
- Standard Chartered CashOne: Best for anyone who needs cash urgently. It has low interest rates of 3.48% per annum, and you will not incur any processing fees.
It may not be a good option for foreigners who are earning less than $60,000 yearly. To qualify, your credit score will be scrutinised significantly, which may affect your interest rates too.
- UOB Personal Loan: A Singaporean or a PR must have a minimum annual income of $30,000, but there is no minimum income for foreigners.
- Citibank: This loan is suitable for low-income foreigners. It has a low interest rate of 3.45% per annum. The minimum income for Singapore citizens is $30,000, and $42,000 for foreigners. New customers enjoy low interest rates compared to those who own Citibank credit cards.
*Information correct at time of publication
Licensed Money Lenders
Licensed money lenders are able to offer a personal loan with no income proof in Singapore. A reliable licensed money lender will require less paperwork. It will provide a quick loan approval to ease your financial distress quickly.
The interest rate is up to 4% per month. For defaulters, there is a 4% per month late interest rate, as well as a late fee not exceeding $60 per month. Upon loan approval, you will be charged an administrative fee not exceeding 10% of your principal loan amount.
You may also incur legal costs in case of any successful court case undertaken by the lender to recover its money. All these costs should not exceed the principal loan amount.
Nevertheless, before you apply, check whether the money lender has a license and physical office, and whether its name is on the list of licensed money lenders in Singapore.
Do You Need A Personal Loan With No Income Proof?
Getting a personal loan with no income proof in Singapore can be overwhelming. You need a reliable lender to help you through a challenging financial situation.
You can apply to a bank for a low-income loan, but the loan application and approval process is likely to be cumbersome.
Suppose you don’t want to go through a loan rejection that could negatively affect your creditworthiness.
In that case, you can choose CreditMaster. It’s one of the most reliable licensed money lenders in Singapore, offering the best personal loans to anyone without proof of income.
Contact us or apply for a loan and enjoy a speedy process with less strict criteria.