Different banks have different names for it but the personal instalment loan is one of the most common loans you can find on the market.

The principle is the same: you borrow a specific sum, pay a one-time processing fee (which is sometimes waived) and agree to repay the amount in fixed monthly instalments of up to 84 months.

Personal loan promotions 2021

We’ve compiled a list of personal loan promotions based on the lowest interest rates and bank offers on the market. These are the current personal loans with interest rates below 4 per cent p.a.

1. Standard Chartered CashOne Personal Loan: Low interest rates, and cashback

With a flat interest rate of 3.48 per cent p.a. (EIR of 7.99 per cent p.a.) offered on SingSaver, the Standard Chartered CashOne Personal Loan is one of the best options in the market.

You will also receive 50 per cent off your first month’s instalment amount in the form of a cashback and get another $20 cashback when you apply via MyInfo. 

There are no processing fees for this loan but Standard Chartered charges an annual fee of $199. In addition, you can also get instant approval and loan disbursement – no more waiting 3 - 5 working days to receive your cash!

2. HSBC Personal Loan: Best for long term loans up to 7 years

If you’re looking at a longer loan tenure of between 6 - 7 years, the HSBC Personal Loan offers the best annual interest rate of 3.4 per cent p.a. (EIR 6.5 per cent p.a.) to 8.2 per cent p.a (EIR 14 per cent p.a).

The HSBC Personal Loan also offers the longest loan tenor on the market: you can spread out your payments over up to 7 years.

Enjoy a waiver of the processing fee as part of your welcome offer.Loan amounts range from a minimum of $5,000 to a maximum of 4x your monthly salary.

If your annual income exceeds $120,000, you can borrow up to 8x your monthly salary, or a maximum of $200,000.

Promotional interest rate: 3.4 per cent p.a. (EIR 6.5 per cent p.a.) to 8.2 per cent p.a (EIR 14 per cent p.a). Get rewarded with $88 cashback and $100 in GrabFood vouchers for approved loans and enjoy $0 processing fees. Valid till March 31, 2021. T&Cs apply.

3. DBS/POSB Personal Loan: Best low interest loan for for those with healthy credit profile

Both POSB and Standard Chartered Bank offer a very competitive flat rate starting from 3.88per cent p.a.

What makes them different is that DBS/POSB Personal Loan offers this personalised interest rate only to customers with an excellent credit score. You’ll be able to borrow up to 10x your monthly income if your annual income is above $120,000. 

One drawback though is that you only know the interest rate being offered to you only when you apply for the loan. If you’re an existing DBS/POSB customer, you’ll be able to receive cash immediately into their your DBS/POSB account. 

You can apply on SingSaver and get your loan approved and disbursed instantly into your DBS/POSB account. However, be eligible for a DBS/POSB personal loan, you first have to be a DBS/POSB customer.

This means that you will need to have an existing eligible (i) DBS/POSB Credit Card and/or Cashline account, and (ii) an existing eligible DBS/POSB deposit account for the loan application.

4. Citibank Quick Cash Loan: Best for short-term loans above $20,000

For a minimum loan amount of $20,000, Citibank Quick Cash Loan offers 3.99 per cent interest rate (EIR 7.5 per cent p.a.) across all tenures. This makes it one of the cheapest loans available for loan tenures of between 12-24 months. 

There are no processing fees for this loan but the 3.99 per cent p.a. interest rate only applies for only loan amount of $20,000 and above.

It is also only applicable for new to Citibank customers. Interest rate for existing Citibank customers is at 4.55 per cent (EIR 8.5 per cent p.a.).

Credit limit is up to 4x your monthly income and $0 processing fees. Take note that the Citi Quick Cash loan is drawn down from available credit limit for credit cardmembers. Alternatively, you’re required to have a Citi Ready Credit account ready.

Promotional interest rate: 3.99 per cent (only for new Citibank customers who take up a minimum loan amount of $20,000)

If you’re still undecided, we’ve compared all the personal loans being offered by banks so you can easily compare the various terms and conditions. Compare and apply through SingSaver now and save more with exclusive offers and better interest rates.

Alternatively, check out our summary of the Best Personal Loans in Singapore 2021 for our recommendations of the best loans based on different needs.

ALSO READ: Understanding personal loans: When should you use it?

Personal loans: 6 factors to look out for

When it comes down to choosing a personal loan, the most important factors to consider are: 

1) Interest rate

Interest rates vary from bank to bank and start from 3.0 per cent p.a. (Effective Interest Rate 5.68 per cent p.a) and above. Banks sometimes waive the processing fee and offer exclusive interest rates during promotional periods.

The effective interest rate is the actual interest rate you will be paying when you include one-time fees like processing fees or annual fees.

2) Loan amount

Maximum amount you can borrow for instalment loans is usually 4x your monthly salary. This can go up to 10x your monthly salary if your annual income is above $120,000 and you have a good credit history. 

3) Loan tenure

Repayment period typically ranges from 12 to 60 months and interest rate may vary depending on your tenure length. The highest loan tenure offered in the market right now is 84 months being offered by HSBC. 

4) Additional fees involved

One-time processing fees range from 0 per cent to 3 per cent of approved loan amount. Banks sometimes waive the processing fee and offer exclusive interest rates during promotional periods.

5) Your credit history

If you have a good credit history and score, you are more likely to get a preferential rate than someone who has a track record of missing credit card or loan payments.

6) Speed of approval

When you’re applying for a loan, one of the main criteria is how fast and easy the loan can be credited to your account. Many banks these days offer instant digital approval so you can get cash transferred to you as quickly as possible.

ALSO READ: Should you repay your personal loan early?

What to know before applying for a personal loan

1. Have a repayment plan in place

Always work out a proper repayment plan before you apply for a loan. Don’t just borrow money and assume you are able to pay it off one way or the other. That’s precisely how one loan can lead to another.

Eventually, it becomes a vicious cycle. Therefore, borrow only when you really have to and be sure to know how and when you’ll finish repaying the loan. Here are 4 consequences of skipping loan payments.

2. A lower interest rate doesn’t always mean a cheaper loan

Beyond just the flat interest rate being offered, remember to factor in any upfront processing fees, annual fees and other additional charges. That’s why the effective interest rate (EIR) is always higher than the advertised flat interest rate because it includes those costs.

So always study the offer and terms and conditions carefully before you apply for a personal loan with the lowest interest rate.

3. Always fully settle the loan before the end of promotional period

By all means, take advantage of the banks’ various promotional offers but remember that it is a loan, and with all loans, always repay the full amount before the promotion period is over to avoid high interest charges.

This article was first published in SingSaver.com.sg.