If you are new to Singapore or are employed in Singapore as a foreigner? You might face a financial crisis and want to get a loan to resolve your problems. Then what you need is a foreigner loan. The good news is that in Singapore you can get a foreigner loan and advice with your loan will be provided by almost all licensed moneylenders.
Basic requirements to get a foreigner loan
Some of the basic requirements you need to achieve to avail a foreigner loan are as follows:
- Have a Work Permit, E-Pass, S-Pass or a passport.
- An employment letter sent from your company.
- Provide an existing Residential tenancy agreement.
- Must have a Paid Utility bill.
- Bank statement for the past 6 months.
Things to look out for when getting a loan
Before applying for a loan, you should know that the bank and check if it is licensed and the given package is ideal for you compare it with other banks or loan services. Confirm that the bank or moneylender provides all its customers the financial help they require. The interest rate is depending on the type of your loan; if it’s collateral-free then the interest rate will be higher if not then the interest rate will be low. But it is important to know the interest rate should not be exorbitant. Also here is a list of things you need to consider before taking out a loan.
- Foreigners who each less than $10,000 annually can only take a loan of a maximum of $500.
- Foreigners who earn between $10,000 to 20,000 a year can borrow up to $3000.
- Foreigners who earn at least $20,000 can borrow up to six times their monthly income.
According to the new rules set by the ministry of law, moneylenders will also not be able to accept foreigners as guarantors, which helps the grantors from becoming liable to pay the debt if borrowers are unable to do so. Also, Moneylenders will not be allowed to lend more than 300 borrowers or exceed $150,000 in total principal loans to foreigners at any point in time. According to the new rule, the maximum number of foreigners loans a moneylender can give is 15 while not exceeding more than 50 foreigner loans a year.
What are the new rules for foreign loans from the ministry of law?
- The number of foreigners borrowing money has increased over the last few years and with these new laws, the credit association of Singapore said these new laws will be devastating to the industry. This new restriction will be used as an excuse to deny loan requests for foreigners who have a low income because of the low-interest rate and that the low loan will still be counted as a foreigner’s loan which is capped at 15 per month and 50 per year. So, most of the foreigners will lean towards the Loan Sharks.
One thing to note about the new laws is that the moneylending authorities are also not allowed to refer a client to another company if their quota is full this will result in the foreigner to look other alternatives themselves which are a hassle in itself as most moneylenders would advise customers according to best of their abilities.
- According to the new laws, the moneylenders can not advertise directly to any vulnerable groups which will result in low-income domestic workers to not be informed about the help they can avail from licensed moneylenders during any case of emergency.
Foreigner loans already come with a higher interest rate as they do not have any properties or assets in Singapore which can serve as collateral.