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TRAVEL AND HOSPITALITY

Are Foreigners allowed to take a Loan in Singapore?

Are Foreigners allowed to take a Loan in Singapore?
The Siliconreview
26 May, 2020

A person who is a non-native or not residing in a specific place is called a foreigner. Living in a place where you were not born can sometimes difficult as you will need to adjust with the native people who are living there. You should follow their law, study their culture and adjust to their lifestyles. It will take a lot of adjustment being a foreigner. You will need to keep up with how they live in a specific place. There are times when you will feel homesick and miss the way you live in your hometown but things will get better when you got used to it. Your hometown will always be your comfort zone and you just have to be open in taking the necessary adjustments in living in a different country.

There are some foreigners that live alone when they go to another country. They do not have anybody they can turn to when they need help especially when they are in some financial struggles. Fortunately, there are moneylenders who are willing to allow foreigners to apply for a foreigner loan in Singapore. This is like a personal loan however, some requirements might be more strict. Some banks are opting not to lend money to foreigners because of the risks but there is also a Licensed Money Lender in Singapore who will be more willing to help. Sometimes, they also call this foreigner loan as a work permit loan in Singapore or personal loan for work permit holders. You can find the right loan package for you if you are a foreigner in Singapore, based on your needs and budget. Loan application may have different requirements than that of the regular personal loan. Foreigners in Singapore should go to licensed money lenders for their own protection as there are a lot of scammers and illegal lenders who take advantage of the vulnerability of foreigners.

What do Foreigners need for their loan application?

Foreigners might need additional things to present to the money lender to be able to avail a foreigner loan unlike those natives who are applying for a regular personal loan. To be able to qualify, you need to have proof that you have a work pass in Singapore, must be 21 years old up to 55 years old and you must be currently employed full time. A residential tenancy agreement can also be submitted as well as a bank statement and a certificate of employment. This kind of loan is just for foreigners with work permit in Singapore. The money lender will go through your documents and will review if you are qualified for the loan. There are some banks that allow the processing of foreigner loans however, their requirements may be more stringent. Make sure that you deal with the legal or licensed loan providers which offers smoother and faster approval.

Things to know about foreigner loans

Most of the financial institutions and licensed money lenders provide a 4.48 percent to 10 percent interest rate annually to this kind of loan. This loan is on a high risk level as foreigners are just staying in the country tentatively that is why they offer such interest rate. In some cases, the tenureship of employment and credit history of a client may affect the amount of the money to be borrowed as well as the interest rate. You may want to ask as many questions as you would like to the lender that you are dealing with to be able to discuss with them the terms and condition of the loan package that you are planning to get.

As foreigners, you may want to look for a licensed and legal money lender in the country as there are so many illegal or unlicensed lenders that are luring foreigners with their offers only to have hidden charges and may somehow harass you in the future. You should also remember to check your duration of stay in the country so that you won’t have unpaid debts remaining under your name because this may lead you to more serious issues. Some banks offer foreigner loans but most of the licensed money lenders have easy applications and faster approval. Different lenders have different ways when it comes to processing loan applications, so you better check on who is better than the other.

You should also be vigilant with money lenders who are just doing scam. There are some who use the name of a big and reputable company just to lure clients to get loans. Some may look and say that they are licensed only to find out that they do not follow the loan packages that is mandated by Singaporean government. These illegal money lenders may send you emails that you are not familiar with and offer you some promotional loans and are asking you to call them. They can ask you some personal details that you should not give away. They will offer you a loan package that is worth more than what you need without even assessing your ability to pay. This is a mere sign that this is a scam. When the time comes that you cannot keep up with your payments, they might harass you to repay them in a way that you can never imagine or even think of when you get the offer. To be safe, do not do your transactions over the phone or the internet, you should go directly to their location on the physical office that they have so that you will know that you are dealing with a licensed lender.

Some rules for foreigner loans:

  • Guarantors who are also foreigners cannot be accepted by money lenders from foreigners who are applying for a loan. If a foreigner borrower default on his payment, the foreign guarantor will have trouble with his work pass and will be in more trouble.
  • There should also be no foreigner who facilitate loans for their own profit. They are considered unauthorized and illegal.
  • Licensed money lenders should not have granted loans for 15 foreigners within a period of a month and 50 foreigners within a year. They also can’t give more than $150,000 of loans to foreign borrowers.
  • One lender cannot refer a client to another lender to avoid bypassing the law.
  • Advertisements are also not welcome to the new rule to avoid more visibility of credit lenders to foreigners.