A line of credit (the banks brand them as line credits, credit lines, or revolving loans) is a standing overdraft you tap only when you need cash, paying interest just on the slice you draw. A personal loan hands you the full sum upfront and charges interest on all of it from day one. The trap most people miss: line credits in Singapore sit at roughly 18-30% per annum as of June 2026, while a personal loan can run from low single digits. So the flexible option is usually the expensive one. The right pick depends on whether you need a one-off lump sum or a safety valve for irregular cash gaps.
A line of credit is a pre-approved borrowing limit attached to your account that you can draw on, repay, and draw on again, like a credit card without the card. You only pay interest on the outstanding balance, calculated daily from the moment you withdraw until you pay it back. Singapore banks market the same product under different names: DBS calls it Cashline, OCBC calls it EasiCredit, UOB calls it CashPlus.
Because the facility revolves, there is no fixed end date and no fixed monthly instalment. You can clear the whole balance the next day with no penalty, or carry it for months. That freedom is the selling point, and also where the cost hides. The daily interest at line-credit rates compounds fast if you let a balance sit. The effective interest rate (EIR) on these facilities reflects the annual fee on top of the headline rate, so the real cost is higher than the advertised p.a. figure.
A personal loan is a fixed-term instalment loan. The bank disburses the full amount in one lump sum, you repay it in equal monthly instalments over a set tenure (usually 1 to 5 years), and interest is charged on the entire principal whether or not you spend it all. Standard Chartered's CashOne, for example, advertises rates from 0.90% p.a. flat (EIR from 1.75% p.a.) for loans of S$1,000 to S$250,000 over tenures of 1 to 5 years, as of June 2026.
The flat advertised rate always understates the true cost, because you repay principal monthly but interest is computed on the original sum. That gap is exactly what the EIR captures. A flat rate near 1% can translate to an EIR closer to 2% once the declining balance is accounted for. Always compare loans on EIR, never the headline flat rate. Our balance transfer explainer covers a third option for short-term, interest-free borrowing windows.
Here are the three main bank line-credit facilities side by side. Verify the live numbers before applying, since rates and fees change and promotions come and go.
| Facility | Interest rate (p.a.) | Annual fee | Credit limit | Min. annual income |
|---|---|---|---|---|
| DBS Cashline | 22.9% (income S$30k+); 29.8% (income S$20k-30k) | S$120, first year waived | Up to 4x monthly income | S$20,000 (S$45,000 foreigners) |
| OCBC EasiCredit | About 0.06% per day (~21.9% p.a.) | S$150, first year waived if income S$30k+ | Up to 4x monthly income | S$30,000 (S$45,000 foreigners) |
| UOB CashPlus | 19.8% | None; 2% one-off processing fee on approved limit | Up to 6x monthly income (max S$200k) if income over S$10k/month, else 4x | S$30,000 (S$40,000 self-employed) |
Say you borrow S$10,000 for one year. On a line of credit at 22.9% p.a., carrying the full balance the whole year costs you roughly S$2,290 in interest plus the annual fee. On a personal loan advertised at 0.90% p.a. flat (EIR ~1.75% p.a.), the same S$10,000 over 12 months costs under S$200 in interest. That is more than a ten-fold difference for borrowing the identical amount.
The line of credit only wins on cost when you barely use it. If you draw S$2,000 for two weeks to bridge a delayed bonus and repay immediately, you pay a few dollars of daily interest and nothing more. Draw it and forget it, and the meter runs at credit-card-grade rates. Run your repayment scenario through our personal budget calculator before you commit, so you know whether you can actually clear the balance fast.
Unsecured borrowing in Singapore is capped across all banks combined. The Monetary Authority of Singapore enforces a borrowing limit of 12 times your monthly income on aggregate interest-bearing unsecured debt, which includes credit cards, personal loans, line credits, and overdrafts. If your outstanding interest-bearing balances exceed that limit for 3 consecutive months, banks must suspend new charges and refuse new facilities until you bring it down.
There is a tighter trigger too. Under the Credit Limit Management Measure, once your outstanding unsecured debt exceeds 6 times monthly income, no bank may grant you a credit-limit increase or new facility that would push your total limit past 12 times income. Individual line-credit limits (4x to 6x monthly income) sit inside this aggregate ceiling, so opening a second facility does not magically expand your total headroom.
Most line credits require Singaporeans and PRs to be 21 or older with an annual income of S$30,000, though DBS Cashline still accepts S$20,000 at a much higher rate. Foreigners generally need S$45,000 and above. The fees to watch are the annual fee (S$120-S$150, often waived the first year), any one-off processing fee, and the minimum interest charge (commonly S$10) that applies even on tiny balances.
Late or missed payments on either product attract late fees plus default interest near 29.9% p.a., and they show up on your credit bureau file, which can hurt future loan approvals. If you are already juggling several balances, a debt consolidation plan rolls them into one lower-rate loan. Keep a separate cash buffer so you are not leaning on credit in the first place; see our guide to building an emergency fund.
Usually not. Line credits run at roughly 18-30% per annum as of June 2026, while personal loans can advertise from under 1% flat (EIR from about 1.75% p.a.). A line of credit only costs less when you draw small amounts and repay them very quickly, so you pay interest on little for a short time.
No. Interest on a line of credit is charged only on the amount you actually draw, calculated daily from withdrawal until repayment. You may still owe an annual fee to keep the facility open, and most banks apply a minimum interest charge of around S$10 once you carry any balance during a month.
The Monetary Authority of Singapore caps aggregate interest-bearing unsecured debt at 12 times your monthly income across all banks combined, covering credit cards, personal loans, line credits and overdrafts. Exceeding it for three straight months suspends new borrowing until you reduce the balance below the limit.
Both revolve, but a line of credit gives you cash you can transfer to your bank account or withdraw, while a credit card is mainly for purchases and cash advances on a card. Line credits often charge a slightly lower interest rate than credit-card cash advances and skip the cash-advance fee, though both sit in the same expensive 18-30% p.a. range.
This is general financial information for Singapore, not personal financial advice. Figures change — verify current rates against the official sources above before acting. See our full disclaimer.