Can You Get A Personal Loan With No Income Proof?
Professionals with salaried jobs and those who work for themselves can apply for personal loans when they urgently need fast cash. However, obtaining a personal loan with no income proof may be challenging.
Financial institutions typically demand proof from borrowers that they have good credit habits and sufficient funds to make payment arrangements.
Lenders will need to see proof of income in the form of bank statements, salary slips, and other documents. They will check the claimed sources of income and the monthly income flow.
So how can you get around this? Continue reading to learn how to get a personal loan with no income proof in Singapore.
How Much Can You Borrow With A Salary?
The loan amount available in Singapore is determined by your lender, income, interest rates, and loan tenure.
Borrowing From Banks
Banks in Singapore, for example, offer lower interest rates and larger principal amounts than licensed money lenders. The disadvantage to that is banks’ eligibility requirements are more stringent.
Some banks only offer loans to people who make at least $30,000 per year, while others also have age restrictions. However, every rule has an exception.
If you have a great credit score, you can get a sizeable loan even if your income is lower, but your interest rates could still be higher.
Borrowing From Money Lenders
For smaller principal amounts, licensed money lenders typically offer terms of up to three years. So why should you consider borrowing from a money lender?
Amount Of The Loan
Licensed money lenders will lend up to $3,000 if your annual income is less than $20,000. You can borrow up to six times the monthly income if you earn more than $20,000 per year.
On the other hand, some banks only offer up to four times your monthly salary. This also means that a lower loan amount will necessitate a longer approval process.
Rates Of Interest
The interest rate that authorised moneylenders may charge is capped. In Singapore, licensed money lenders cannot charge monthly interest rates higher than 4%.
Granting Of A Loan
Licensed money lenders are more lenient with loan approval than banks. They tend to focus less on your credit score and more on your ability to repay the loan when approving loan applications.
As a result, you have a better chance of getting your loan approved on the first try.
They are also much more adaptable and tailor their loan products to the needs of their customers, ensuring that the interest, term, and repayment are manageable.
How Can You Get A Personal Loan With No Income Proof In Singapore?
In Singapore, it is technically possible to obtain a personal loan with no income proof.
If you don’t have standard income proof, such as CPF contribution statements or payslips, you can use other documents to demonstrate your ability to take out the loan and repay it on time.
Income Tax Statements
You can still apply for a personal loan with no income proof in Singapore with your revenue tax statements even if you don’t have the usual forms of identification like payslips. Taxable income comes from employment, rental, investments, and other sources.
To boost your chances of obtaining a loan, you can also show income proof from non-taxable sources, like the following:
Income derived from abroad: Unless you receive a salary through a Singapore partnership, you are not required to pay tax. If you’re a freelancer working with international clients, you can use this no income proof in Singapore when applying for a loan.
Alimony: In Singapore, alimony is not taxable. If you receive regular alimony payments from your ex-spouse, you may include it in your loan application. Keep in mind that some lenders may request court documents.
You may not have made CPF contributions yet if you just started working. You might not even have received your first paycheck. But some licensed money lenders will accept your confirmation letter or employment letter.
Employment contracts are used as proof of income in the following situations:
- Newcomers to the workforce
- People returning to the labour market after a break
- Foreigners who recently began working in Singapore
Notice Of Assessment (NOA)
It contains all of the information about your taxable income and the taxes you’re paying.
The NOA is the tax bill you receive after paying all your taxes. That is, it excludes any non-taxable sources of revenue you may have, which could boost your loan qualification.
What Documents Are Needed To Apply For A Loan?
Some Singapore banks will require more documentation than licensed money lenders. The majority of them will require the following documents from you:
- Contribution to the CPF
- Letter of employment or confirmation
Proof Of Address
- Account statement
- Utility bill
- Received letters addressed to you and bearing your name
- A rental contract in your name
- For citizens and permanent residents: NRIC
- For foreign citizens: Driver’s license or passport number
What To Do If You Are Unemployed But Need A Loan In Singapore
Anyone can experience a financial emergency. Even if you are unemployed, you may feel the need for money for various reasons.
Some of the reasons you are unemployed include the following:
- When looking for work after graduation
- Taking a break from work and looking for a new job
- Leaving a job to pursue higher education
- Quitting your occupation to start your own business
- Creating money from other sources of income
- Medical reasons
Here are some strategies for reducing your personal loan approval time while unemployed and increasing your chances of receiving funds as soon as possible.
Have A Substantial Amount Of Assets
If you have assets or equity in a home, your application for a personal loan may stand a better chance of being approved, even if you are unemployed. This is because it could be used as collateral for the loan by the lender.
Get A Good Credit Rating
Keeping a good credit score allows you to obtain a personal loan faster, with shorter loan approval times from licensed money lenders.
Consider Submitting A Joint Application
If you are unemployed, you should consider applying with someone else. This could be your spouse or even a friend who has a regular income and a good credit score.
This will increase your eligibility for any loans you are attempting to obtain as an unemployed person.
Choose Loans With Prompt Cash Disbursement
When you need a quick loan, check the cash disbursement lead time. If you have Singpass and the loan provider you choose allows you to apply using Singpass, you should be able to get the cash much faster.
Important Information To Bear In Mind Before Loan Applications
Avoid Submitting Numerous Loan Applications
Every time you apply for a new loan from a licensed money lender or bank, they will pull your credit report from your files and record the inquiry on your file.
Your request for personal loans will not be approved if numerous inquiries are in your file.
Examine Your Credit Card Limit
Since the loan provider already authorised how much they were willing to lend you when you applied for the card, converting the unused credit limit on your credit card can speed up the low-income approval process for your loan application.
Using too much of your available credit can lower your credit score, so strive to keep your balances low.
Be Wary Of Hidden Costs
In addition to interest rates, you should carefully read the fine print and check for other costs like prepayment penalties, processing fees, and late payment fees.
Don’t forget to compare the various authorised loan providers and request full disclosure of all loan terms.
Where To Apply For A Loan
Applying for and receiving instant approval for a personal loan is simple. The borrower’s NRIC and proof of income are all that Singaporeans need. There are several options for proving your income.
Salaried employees may submit a copy of their most recent statement, a Notice of Assessment, or CPF statements for the previous year. Self-employed borrowers should submit their income tax Notice of Assessment.
If you have a low income, obtaining a personal loan from a bank with less restrictive income requirements will be easier.
It may also be simpler if you already have a banking relationship with the bank.
Fortunately, some lenders let you apply for a loan with low income or let you use income from non-employment, which is helpful for low-wage workers with incomes that are not fixed.
However, it’s essential to research and weigh the benefits and drawbacks of obtaining a loan without a steady source of income before applying for one.
Choose The Right Loan And Lender
You can obtain a personal loan with no income proof if you know what to use as alternatives. Low-income earners might have to put up with higher interest rates, the requirement of pledging collateral, and a more rigorous application process.
However, those who are self-employed might want to look into alternative financing options that don’t need a fair or good credit rating. These range widely and include crowdfunding, cash advances, and family loans.
These unconventional funding sources can be just as helpful during a financial emergency as bank loans and other conventional funding sources.
It’s essential to consider the loan’s monthly repayment amount when applying for a personal loan with no income proof because it needs to be manageable.
Whatever you’re facing, BST Credit is the place to go if you require a personal loan in Singapore. Our personal loans are quick and easy to obtain, with affordable interest rates.