If you are considering taking a loan from a licensed moneylender in Singapore, one of the first questions you may have is: How much can I borrow?
The maximum amount you can borrow depends mainly on your annual income, whether you are a Singapore Citizen, Permanent Resident or foreigner residing in Singapore.
However, being eligible for a certain borrowing limit does not necessarily mean that you will be approved for the maximum amount.
Here is what you need to know.
1. What Is the Maximum Amount You Can Borrow?
For unsecured loans, the Ministry of Law sets limits on the total amount a person can borrow across all licensed moneylenders in Singapore.
| Annual Income | Singapore Citizens & PRs | Foreigners Residing in Singapore |
|---|---|---|
| Less than $10,000 | $3,000 | $500 |
| $10,000 to below $20,000 | $3,000 | $3,000 |
| $20,000 and above | 6 times monthly income | 6 times monthly income |
For example, if your monthly income is $4,000, your maximum aggregate unsecured borrowing limit would be $24,000.
If your monthly income is $6,000, the maximum aggregate limit would be $36,000.
It is important to note that these limits apply to your total unsecured borrowing across all licensed moneylenders, not to each individual moneylender.
2. Does This Mean I Can Automatically Borrow 6 Times My Salary?
No.
The maximum borrowing limit is a regulatory cap, not a guaranteed loan amount.
Licensed moneylenders will still assess your financial situation before deciding whether to approve a loan and how much to offer.
Factors that may be considered include:
* Your monthly income
* Existing financial commitments
* Current outstanding loans
* Repayment history
* Credit information
* Your ability to manage the proposed repayments
Depending on your financial circumstances, the amount offered may therefore be lower than your maximum borrowing limit.
3. What If I Already Have Loans With Other Licensed Moneylenders?
Your existing unsecured loans from other licensed moneylenders count towards your aggregate borrowing limit.
For example, if your monthly income is $4,000, your maximum aggregate limit is $24,000.
If you currently have outstanding principal of $10,000 with licensed moneylenders, this does not mean you can borrow another $24,000. Your existing borrowing will be taken into account when determining how much more you may borrow.
This is why the amount available to each borrower can be different even when they earn the same monthly income.
4. Maximum Borrowing Limit vs What You Can Afford
While knowing your maximum borrowing limit is useful, the more important question is how much you can comfortably repay.
Before taking a loan, consider your monthly income together with existing expenses and financial commitments.
A larger loan may also mean a larger repayment commitment. Borrowing an amount that fits comfortably within your budget can make it easier to keep up with your repayment schedule and avoid unnecessary late fees or interest.
If you are considering a personal loan, Shenton Credit can help you understand your available loan options, repayment schedule and applicable charges before you decide whether to proceed.
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Have questions about your borrowing limit or available loan options? Contact Shenton Credit to find out more about our loan options, repayment terms and applicable charges.
