Despite there being nearly a million foreigners on work permits in Singapore, many institutions have been surprisingly slow to offer loan products specifically tailored to foreigners. Combined with Singapore’s extremely high cost of living – considered by many economists and commentators to be the most expensive city in the world – this can lead foreigners struggling to acquire a ready line of credit, helping them to meet their day to day needs and assisting them with making big tsicket purchases.
In this blog, we will break down the different options available to foreign workers looking to secure a personal loan. Read on to find out more.
Many banks are wary of lending to foreigners for a variety of reasons. At the fundamental level, banks are concerned about your ability to service and fully repay a loan. These concerns most often take the form of worries about the stability and regularity of your cash flow, or the permanence of your living situation.
Foreign workers and foreign talent frequently operate in industries with irregular payment cycles or salary amounts, meaning the bank lacks the iron clad confidence that comes from knowing that the borrower is on a fixed salary payable regularly. Additionally, there is always the concern that you could lose your work permit or visa, and be forced to vacate the country rapidly.
The end-result of this is that not every bank offers a loan product targeted at work permit holders, meaning this class of people can often struggle to access credit.
The need for an alternative
This doesn’t mean that work permit holders are locked out of the credit market. Many financial institutions such as independent licensed moneylenders have recognised this gap in the market and moved to provide temporary residents with loan products tailored to their specific needs.
These loans require that
Often these loans simply require the borrower to submit a few additional documents as part of their application. In addition to a valid work pass, you will be need to provide a valid employment pass, the tenancy agreement for your rental premises proving your intent to stay here for the length of time needed to service the loan, a bank statement and three months of pay slips to demonstrate a level of income comfortably capable of making repayments and an employment letter from your place of business demonstrating stable work.
For more information on applying for a personal loan as a foreigner, start a conversation with the loan consultant at Fast Money today.