Loan with no collateral — approval and rate depend on credit score and income. Credit cards and personal loans are unsecured.
An unsecured loan is backed only by your promise to repay — no collateral. Approval and rate depend entirely on your credit score, income, and existing debt load.
Common types in Singapore: credit cards, personal loans, education loans (non-CPF), credit line / overdraft facilities.
Credit cards: 25% – 27% per annum on revolving balances. Avoid carrying balances at all costs.
Personal loans from banks: 3% – 4% flat rate per year, which translates to EIR 6% – 8%.
Licensed moneylenders: up to 4% per month — extremely expensive. Only for short-term emergencies.
Education loans: 5% – 7% flat, tenure-aligned to study + repayment grace period.
Buy Now Pay Later (BNPL): often 0% if paid on schedule, with steep late fees that effectively make it a high-rate unsecured product.
MAS unsecured borrowing cap: total unsecured debt (credit cards + personal loans) capped at 12× monthly income for individuals earning above S$120k per year; 6× for under-S$120k earners.
Borrowing beyond the cap is restricted to lower-rate loans only or refused entirely.
Credit Bureau Singapore (CBS) score: 1000 – 2000 range. Banks pull this for every loan decision. Score below 1825 may trigger rejection or higher rates.
Short-term cashflow: an unexpected medical bill or repair while waiting for an insurance payout. Cheaper than a credit card balance.
Debt consolidation: rolling multiple high-interest debts into a single lower-rate personal loan. Always check the EIR before signing.
Avoid for: lifestyle spending, vacations, weddings, optional renovations. The math rarely works.
If you can't pay back within 12 months, the loan is probably the wrong tool. Look at the underlying issue (income, spending, emergency fund) before borrowing.
A loan backed only by your promise to repay — no collateral pledged. Approval and rate depend on credit score, income, and existing debt. Common Singapore unsecured: credit cards, personal loans, study loans, BNPL balances. Rates are materially higher than secured loans.
Credit cards: 25% – 27%/year on revolving balance. Personal loans: 3% – 4% flat (EIR 6% – 8%). Licensed moneylenders: up to 4% per month (extremely expensive, short-term only). BNPL: 0% if paid on schedule, high late fees if not.
Total unsecured borrowing is capped at 12× monthly income for individuals earning above S$120,000/year. Below S$120k, the cap is 6×. Exceeding the cap restricts you to lower-rate refinancing only.
Pay highest-interest first (avalanche method). Consolidate via balance transfer or low-rate personal loan if applicable. Stop adding new debt. For deep distress, the Credit Counselling Singapore Debt Management Programme can negotiate reduced rates.