It’s no secret that banks are becoming more and more restrictive with their lending practices. And while this may make it harder to get a personal loan with no income proof, it doesn’t mean you can’t get one.
In fact, several lenders will still approve loans without asking for traditional income verification documents. How?
This article will outline how you can get a personal loan with no income proof, the maximum loan amount, the required documents, and where to apply for it.
First, let’s look at the maximum loan amount you can get as a salaried individual.
How Much Can You Borrow With A Salary?
The maximum amount you can borrow with a salary depends on your lender and salary.
Borrowing From Banks
Banks are notorious for their strict personal loan eligibility requirements. They look at your annual income, age, and credit score before deciding whether or not to approve your loan.
And if you don’t have a regular income, it’ll be even harder to get approved.
However, banks would usually require you to earn at least $30,000 per year to be eligible for a loan if you are a Singapore citizen or permanent resident.
On the other hand, you might have to prove you earn around $40,000 to $60,000 per year if you are a foreigner residing in Singapore.
Plus, banks would need you to have an outstanding credit score too. Licensed money lenders, on the other hand, are pretty lenient.
Borrowing From Licensed Money Lenders
Licensed money lenders have lower eligibility limits when it comes to lending money.
For example, you can borrow $3,000 as a Singaporean or permanent resident if you earn at least $20,000 per year. If you earn more than $20,000 per year, you may borrow as much as six times your monthly salary.
The maximum loan amounts change if you are a foreigner living in Singapore. An annual income of less than $10,000 would make you eligible for a $500 loan, while you may borrow up to $3,000 if your income falls between $10,000 and $20,000.
Also, licensed money lenders have a fixed interest rate limit (up to 4%), which helps you know exactly how much you’ll need to pay back every month.
There are no such limits when it comes to banks. Instead, the banks’ interest rate will vary based on your income, credit score, and loan amount.
This strict and variable set of eligibility requirements also implies your bank loan application will pass through a longer and more tedious process – something you can avoid if you go with a licensed money lender.
But what if you are unemployed and need some quick cash? How would you get a personal loan with no income?
What To Do If You Are Unemployed But Need A Loan
Getting a personal loan when you are unemployed is challenging but not impossible. Here is what you can do to improve your chances of getting a loan when you are unemployed:
Maintain A Good Credit Score
Your credit score demonstrates your credibility and reliability as a borrower. The higher your credit score, the more trustworthy you appear to lenders.
If you have a good credit score, some lenders may be willing to overlook your employment status and approve your loan.
So if you are unemployed but need a loan, focus on maintaining a good credit score.
Own Some Assets
Your loan application will get a massive boost if you have some assets to your name. Showing the lender that you have some skin in the game will make them more likely to approve your loan.
Some assets you can use as collateral include your car, property, jewellery, or investments.
Make A Joint Application
You can also improve your chances of getting approved for a loan by making a joint application with someone who has a good income and credit score. The joint applicant could be your spouse, relative, or friend.
This way, even if you don’t have an income, the other person’s income and credit score will increase your chances of getting approved for the loan.
Now let’s look at the documents required to apply for a personal loan.
The required documents for a personal loan application might vary based on your money lender, but the most common ones are:
As a Singapore citizen or permanent resident, your NRIC is sufficient to prove your identity. If you are a foreigner, you’ll need to provide your passport and employment pass to apply for a personal loan.
Both banks and licensed money lenders would need some form of residence proof before approving your loan.
The most common documents used for this purpose are:
- Utility bills
- Bank statements
- Tenancy agreements
- Letters sent to your address
You’ll need to show some form of income proof to get approved for a personal loan. The most common income proofs are:
- CPF contribution
- Employment letter
But things change when you don’t have solid income proof. Let’s answer the burning question: “how to get a personal loan with no income proof?”
How Can You Get A Loan Without Income Proof?
There might be situations when you want to apply for a loan but don’t have income proof.
For example, you might have recently joined a new organisation and haven’t withdrawn any salary yet. Or you might be working for a not-so-organised employer who pays you in cash.
Remember that it’s possible to get a personal loan with no any income proof or the usual income proof documents.
Here are the documents you can attach with your application to get approved for a personal loan without income proof:
1. Income Tax Statement
If you are employed, the most common document you can submit as income proof is your Income Tax Statement.
Your income tax statement will feature all possible income streams, including your job, rental income, investment dividend, or any other business ventures you might be involved in. The tax you pay on these incomes helps lenders see that you have a steady income and can repay the loan.
Moreover, you may also add your non-taxable income sources to your application to strengthen your case further. The most popular ones are:
Alimony: If you and your spouse are separated, proof of alimony can also be added as a supporting document. Alimony isn’t taxed, but it shows you’re getting a consistent flow of payments, so you are more likely to pay back your loan.
Foreign income: If you’re working as a freelancer or have any other source of foreign income, you can also declare it in your application. Again, this income isn’t taxed but serves as a solid income-proof alternative.
2. Notice of Assessment (NOA)
The Notice of Assessment (NOA) is a document that shows your total taxable income and the taxes you paid on it for a particular financial year. NOA is commonly known as your tax bill.
You can get a copy of your latest NOA from the Inland Revenue Authority of Singapore (IRAS) website.
If you’re employed, simply log in with your Singpass and download a copy of your NOA. If you’re self-employed, you’ll need to submit a request through the IRAS website and set an appointment with the Taxpayer and Business Service Centre at the Revenue House.
3. Employment Contract
Your employment contract can also be a supporting document for your loan application without income proof. The contract will help the lender understand your job role, income, and employment status.
While submitting your employment contract, make sure to include the following:
- Company’s letterhead
- Correct contract dates
- Full name and NRIC number
- Salary information
- Your signature
- Your employer’s signature and stamp
Now that you know everything about getting a personal loan with no income proof, let’s see where you can get one from.
Where To Apply
Bank and licensed money lenders are the two most obvious choices for personal loans in Singapore. Let’s see how the two compare.
It’s common knowledge that getting a loan from banks is a tedious process. They have strict eligibility criteria, ask for more documents, and take longer to approve loan applications.
For example, as explained above, banks have higher annual income requirements than licensed money lenders. Banks also often require stellar credit scores to approve loans.
However, banks offer higher loan amounts as compared to licensed money lenders. Moreover, banks have longer repayment periods and lower interest rates, which makes it somewhat convenient to pay back.
Licensed Money Lenders
On the other hand, licensed money lenders are super convenient for borrowers.
They might give out smaller loan amounts than banks but have less stringent eligibility requirements. For instance, you can get a personal loan even if you earn $10,000 yearly.
Also, all licensed money lenders must follow the rules and regulations laid out in the Moneylenders Act introduced by the Ministry of Law. This means you can rest assured that you won’t be mistreated or scammed, as many loan sharks in Singapore do.
In addition, licensed money lenders are quick to approve loan applications, which means you can rely on them whenever you need urgent cash. In fact, you can get your loan applications approved within an hour and collect the loan amount the same day.
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