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How to Get the Best Secured Loan in Singapore

Are you planning to get a secured loan Singapore because of the need for urgent money?

You probably have encountered the term “secured loan” several times while searching the Internet for a place to borrow funds. 

But what do secured loans mean? How is it different from unsecured loans in Singapore? 

In a nutshell, secured loans require collateral that serves as your guarantee of repaying the loan. Also, your assets will ensure you a higher loanable amount. But, if you fail with your repayment obligation, your creditor will seize your property to recover from their financial loss. 

Taking out a secured loan in Singapore sounds intimidating and risky. You must put your assets on the line to get a larger loan. However, many Singapore Citizens still opt for this type of loan product. 

Do you want to know why many people borrow quick cash with secured loans and how to apply for one? This article is your quick guide on getting the best secured loan Singapore. 

Table of Contents

What is a Secured Loan Singapore?

A secured loan is a loan type supported by a vital factor—collateral. You cannot apply for it if you do not have valuable property, usually a vehicle or a home. That’s why it is called a secured loan. Your asset serves as security for the lender. 

Secured Loan Singapore

The collateral is essential when you apply for a secured loan Singapore. It reduces the risk of borrowers defaulting on the loan. Since your property is at risk, you will become more responsible with your loan obligation. Or else, you have to bid goodbye to your beloved possession. 

In addition, the lender will evaluate the value of your collateral. Often, the approved loan amount depends on the value of your property. If your car still has a high value in the market, you can take out as much as that. You can loan up to the total value of your collateral. But sometimes, it is less than that since there is a margin of safety that lenders and borrowers must abide by. 

Furthermore, with collateral at risk, your lender has a safe future if borrowers become negligent of their obligations. Due to the minimum risk for the lender, you can enjoy lower interest rates with a secured loan Singapore. 

Unsecured Loan vs Secured Loan Singapore

You will encounter secured and unsecured loans every time you search for loans. It might initially sound confusing, but these two are easy to differentiate once you understand the basics. We listed five loan characteristics that help you separate secured and unsecured loans. 


The topmost difference between unsecured loans and secured loans in Singapore is collateral. The need for a valuable asset makes a loan secure. Borrowing money through a secured loan requires an asset for collateral. 

When you apply for an unsecured loan, you do not need a property to qualify. Instead, your credibility to handle and repay the loan is enough. There is no need to be stressed in finding the most valuable property to put at risk.

Interest Rates

Secured loans Singapore come with lower interest rates than unsecured loans. Legit money lenders take a higher risk when approving loans to unsecured loan borrowers. Without a surety, it is understandable why a credit charges higher rates. But with collateral, your creditor can charge a reasonable interest rate. 

If you want to pay less interest, apply for a secured loan. However, some licensed money lending institutions nowadays approve an unsecured low-interest personal loan. Verify first if the institution is indeed reputable before borrowing money from it. 

unsecured vs secured loan Singapore

Loan Amount

Applying for a secured loan Singapore has minimum risks. With collateral to your loan, banks and money lending facilities can offer you higher loan amounts. Often, they use the value of your asset as a baseline for your loanable amount. 

On the other hand, unsecured loans are based on the amount you can borrow from your citizenship and annual income. You are less likely to receive a higher amount if you have an unstable job history. But if you fit the qualifications, you can borrow a reasonable amount. 

Loan Term

As stated above, collateral is crucial in differentiating a secured loan from an unsecured loan. If you have a valuable asset, you can get approved with a higher loan amount and lower interest rate. Plus, you can have a longer tenure on your loan. Since you are paying for a high-value loan, you might need extra time to repay it fully. However, the longer you pay off your loan, the higher the interest it accumulates. Thus, it makes you pay more in the end. 

Lenders offering an unsecured personal loan have shorter loan terms. You can fulfil your financial obligation faster with a reasonable approved loan amount and interest rate. This way, you don’t pile up the interest as you go along with your loan tenure. 


A secured loan in Singapore poses less risk to creditors than borrowers. Since you put up a property for the loan security, there is a consequence of losing your valuable asset. It only happens if you are unable to repay your obligation diligently. That’s why paying off your loan on time saves you from additional financial turmoil and losing property. 

Meanwhile, unsecured loans have less risk to borrowers but more to the lenders. Since your loan approval highly depends on your creditworthiness, your creditor has nothing to hold against you once you miss your repayments. Instead, your financial behaviour will reflect in your credit score. 

Unsecured loans have perks and drawbacks, just like secured loans in Singapore. Whichever of the two you need, you must take time to do your research. 

How Does a Secured Loan in Singapore Work?

A secured loan is a collateral loan in Singapore that requires an asset. If you apply for it through a bank or licensed financial institution, your collateral reduces the risks involved when borrowing money. 

How Does a Secured Loan in Singapore Work

Various types of secured loans have one thing in common: if you become irresponsible with your loan, you will likely lose your assets. 

Your lender will assess the value and quality of your collateral based on the loan type you applied for. Then, your credit will check your source of income. 

Applying for a home mortgage automatically puts your house as collateral for the money lent. If you default in repayment, you can say goodbye to your dream house. 

Defaulting may or may not face legal action. But it puts all your efforts and finances down the drain. You lose a prized possession instead. 

Here is a scenario to elaborate.

You take out a home mortgage to secure a new family house. However, in the middle of your loan term, you lose your job, which makes it impossible for your family to pay for the loan. As you stop repaying, your lender can seize the house you used to secure the loan. Then, your lender can start the foreclosure proceeding. It means your home would be auctioned off. The lender will use the process from it to repay your defaulted mortgage. 

What are the Pros of Secured Loans?

Many Singapore citizens and residents apply for secured loans because of the benefits they can earn from them. 

Improve Creditworthiness with secured loan Singapore

Higher Loan Amount

Taking out a secured loan Singapore helps you borrow more money. Your collateral assures you that you will pay off your financial responsibility. Or else you will have to face the heartbreaking consequence of losing your beloved asset. Of course, you would want that to happen. That’s why banks and lenders approve secured loan cash with a higher loanable amount.

Better Loan Approval 

Applying for a secured loan has a better chance of loan approval, especially if you have collateral to present. You can still get approval if you have a low credit score, though it may affect the interest rates. In addition, being self-employed allows you to get approved for your secured loan application. What matters the most is that you have collateral to support your loan. This way, lenders will be more willing and accommodating in approving your application. 

Improve Creditworthiness

An unhealthy credit score does not hinder getting a secured loan Singapore. You can qualify as long as you have a valuable property for surety. But that’s not the best part yet. Your secured loan Singapore can help you build a better credit score if you make timely repayments despite the lack of creditworthiness. Lenders of secured personal loans in Singapore report your payment records to credit bureaus. Positive repayment behaviour can boost your credit history from zero to better. 

With a more considerable lump sum, you can make big purchases with a secured personal loan Singapore. However, taking out this type of loan is about more than just about the money’s value. If you fulfil your obligation diligently, it can help you create a better financial future. 

What are the Cons of Secured Loans?

Despite a secured loan Singapore’s benefits, it still has some negative aspects you need to understand. 

Asset repossession due to default on secured loan

Asset Repossession

Since your asset secures your loan, you might lose ownership if you cannot keep up with your repayments. That’s why defaulting on your loan is never advised. Instead, if you face a new hurdle in your finances, talk to your creditor immediately. This way, you can escape your financial trouble, leaving your property unscathed. 

Long Repayment Term

A secured loan Singapore has a longer tenure, meaning longer repayment periods. This way, you pay for the principal loan amount and interest over time, which costs you more overall interest. 

For example, you purchased a car for $35,000. You made a down payment of $7,000 and opted for a 6-year loan term. The interest costs 11.33%, so your monthly payment will cost you $537.70. Therefore, you will be paying the remaining loan amount of $28,000 and a total interest of $10,714.32. You need to pay $38,714.32, which is far different from the car’s original price. 

Variable Interest Rate

Some banks and money lenders offer secured loans with variable interest rates. It means your interest is flexible and tends to change over time, depending on the market. Therefore, your repayments could increase without prior notice. That’s why you must check whether the secured loan offers come with a fixed or variable interest rate. 

Every loan decision has advantages and disadvantages. So, ensure you have weighed out all your vital financial details and options before applying for a secured loan in Singapore. 

5 Types of Secured Personal Loan Singapore

Various types of secured loans are available in Singapore. Check out some of the top choices of Singaporeans and Permanent Residents. 

Savings-secured Loan Singapore

Vehicle Loan

A vehicle loan can cover the expenses if you plan to buy a brand-new car. In addition, you can use the car as your loan security. You must use the borrowed money specifically for that purpose only. This way, the lender can take away your car that you fail to repay on time. 

Car Title Loan

Don’t confuse vehicle loans and auto title loans. Although these two involve a vehicle, they work differently. With a car title loan, you pledge the title of your car to get the loan. Even if you have owned your vehicle for a long time, once you fail to repay the loan, the lender will seize it. Then, the credit will take car ownership, sell it, and use the proceeds for the amount you fail to repay. 

Mortgage Loan

Purchasing real estate requires a lot of money upfront. Even though buyers save money, sometimes it isn’t enough to secure the house. Singaporeans often talk to banks and trusted lenders to fund the purchase. Your mortgage loan will help you complete the home-buying process. However, your lender can return the property if you default on your loan payment. 

pawnshop loan

Savings-secured Loan

Sometimes, citizens in Singapore do not have a tangible, valuable asset to use as collateral. You can apply for a share-secured loan if you have no car or home to pledge. You can use your own savings instead. It might sound too risky since you need extra funds, yet you are pledging your savings. But in reality, it is advantageous, too. Even though your savings are collateral, you can keep them in your account. It will continue to earn dividends while you make large purchases. You will not lose your savings but still secure your loan if you repay diligently. 

Pawnshop Loan

A pawnshop loan in Singapore is one of the most accessible and convenient methods to borrow money. You can get quick cash on the spot if you have a valuable asset like gold, jewellery, or an expensive watch to pawn. In addition, pawning does not need extensive requirements. There are no credit checks. You can apply if you have the papers supporting ownership of your pawnable item. However, you can only bring home funds based on the value of your pledge. And if you fail to pay it off, you must bid goodbye to your prized possession. 

Take time to think about which type of secured loan Singapore you need. This way, you can prepare the required documents for your collateral. Other secured loans are still available in the country, but these five are the most commonly applied. 

When to Apply for A Secured Personal Loan Singapore?

Financial challenges come in different forms, but you can always take out a secured loan in Singapore.

Wedding Preparation

A wedding is a major milestone everyone dreams of. Before saying “I do,” you have to be prepared for the expenses associated with it. Let’s admit it: getting wed is expensive. Although you and your partner saved for it, there are unexpected expenses. Avoid the unnecessary stress and hassle of financial management by borrowing too much money from trusted lenders. 

Secured loan for Wedding Preparation

Property Investment

Making an investment, like buying a warehouse, requires a large sum of money. A secured loan can help pay for the costs associated with the purchases. In addition, its lower interest rates allow you to manage your finances until you recover from the expenses. 

Debt Consolidation

Paying off multiple debts simultaneously is stressful and challenging to manage. You have to watch out for the interest rates and penalty fees. If you miss repayment, you might pay more than you need to. You can avoid such a dilemma by consolidating your debts into a single payment with a secured personal loan Singapore. It simplifies your finances, saves you from interest charges, and pays off your debt faster. 

A secured loan Singapore is a famous financial solution used for various purposes. You can pursue your dream house, car, and any investment. However, remember that it is crucial to research and shop around the legal financial institutions. This way, you can enjoy the best interest rates and loan terms. 

How To Find The Best Secured Loan In SG? 

Finding the right secured loan Singapore can be challenging if you don’t know what to look for. Follow these tips to see the country’s best bank or licensed lender. 

Assess Financial Need

Before applying for any loan, evaluate your financial situation. Do you need quick cash for unexpected hospitalisation bills, loss of income, or investment? With this, you can estimate how much money you need to borrow. Also, you can figure out how long you can manage the loan repayment. 

In addition, you must consider your current expenses, debts, and source of income. Ask yourself if your finances can manage additional allocations in your budget. This way, you can identify whether you can afford to borrow and repay on time. 

secured loan contract

Compare Loans Available

Various loan products and services are available in the country. Secured loans in Singapore are the best choice for more significant funding, especially if you have collateral to back up the loan. However, it does not end there. 

Checking the interest rates, fees, and repayment terms is essential. Compare and differentiate among the banks and lenders near you for the best deal. In addition, review feedback from previous and current clients. This way, you can better understand how your prospective creditor works. 

Understand the Loan Contract

Choosing the best secured loan in Singapore includes the written agreement between two parties—the lender and the borrower. Once you continue your loan application to your preferred creditor, read and understand the Note of Contract. Each contract must contain the loan terms and conditions, principal loan amount, interest rates and fees associated with your loan, and the repayment term and schedule. 

Before you affix your signature and seal the deal, scrutinise the fine print. Always ask any questions and doubts immediately. You can request thorough elaboration to understand better what you are agreeing to. In addition, to avoid facing any legal complications in the future. Most importantly, you can be prepared for your obligations and possible consequences. 

Looking for the most suitable secured personal loan Singapore requires careful assessment. You must weigh your options wisely to improve your financial management. In addition, you can avoid losing your valuable property and accumulating more debts. 

How to Apply for a Secured Loan in Singapore?

Borrowing money through a secured personal loan in Singapore is a great decision. However, its loan application process is tedious and strict. 

Step 1. Choose the appropriate secured loan product.

Decide which secured loan products and services you wish to apply for. This way, you can screen the list of legitimate lenders you can inquire about. 

collateral for secured loans

Step 2. Decide on the collateral.

Figure out which asset of yours is valuable enough to use as collateral. Choose a beloved property that is enough for your target loan. So, you have a pledge to present to lenders when you shop around. 

Step 3. Compare licensed secured loan providers. 

Visit the websites of banks and licensed lenders to see which offers the best deal for your situation. Be careful and inform the creditors for a soft credit check to avoid harming your credit score. 

Step 4. Asset appraisal and valuation.

Before loan approval, lenders perform a thorough assessment of your collateral. They evaluate the asset condition and potential depreciation and compare its market value. 

Step 5. Discuss the loan agreement. 

Once you have chosen a trusted creditor, discuss and elaborate on your current financial situation. This way, you can create a balanced agreement for your secured loan. 

secured loan cash disbursement

Step 6. Secured loan cash disbursement and Repayment. 

You will receive your loan cash after the loan approval and contract signing. Then, you have to repay the loan amount based on the loan terms you agreed with the lender. Be responsible with your additional obligation to avoid losing your valuable property. 

When applying for a secured loan, it is crucial to pick the right lender. Singaporeans must explore all possible options offered by licensed financial institutions. So, do your best to achieve your financial goal. 

What Assets to Use for Secured Loan in Singapore?

Licensed money lenders in Singapore accept various collateral for a secured loan. You must have a valuable asset to determine the loan amount you can be granted. That’s why choosing the most appropriate one for your loan is crucial. Here is the standard collateral appraised by lenders to discern its current market value. 

Real Estate Properties

The valuation is based on market conditions, including your property’s type, location, and condition. From the assessment, the loan amount ranges to a certain percentage of your property’s appraised value. Often, it is subject to the LTV (Loan-to-Value) ratio. 

Home Equity

Mortgage loans use the valuation of your property based on its current market value. But this time, it deducts any outstanding mortgage balance. It means that lenders finance loans based on the percentage of equity value. This way, the collateral can be used as compensation if a borrower defaults. 

High-Value Assets for secured loan Singapore

High-Value Assets

These assets include expensive collectables, arts, jewellery, stocks, bonds, and more. The valuation process is based on the asset condition, rarity, authenticity, and market demand. From then on, the loanable amount will usually be at a lower LTV ratio. Selling out high-value collateral is quite tricky in case of loan default. 


Autos, whether brand new or used, are commonly used as collateral. The valuation greatly depends on the OMV (Open Value Market). However, newer automobiles have a higher valuation than second-hand vehicle collateral. Borrowers can take up to 60% to 70% of the auto’s OMV. 

Cash Deposits

Often, these are term deposit accounts used for collateral. The valuation process revolves around the deposited amount, including the interest rates accrued over the term. For lenders, cash deposit collateral is a low-risk secured loan Singapore. Therefore, the loan amount can be close to your deposit value. 

If you own any of the abovementioned properties, you can take out a secured loan Singapore. But you may opt for the best unsecured personal loan if you have none. 

Secured Loan in Singapore

Conclusion: Best Secured Loan Singapore

Secured loans in Singapore have lower interest rates, all thanks to the collateral borrowers put up front. It is less risky for lenders but not for borrowers. Since you cannot afford to lose your valuable property, you’ll be more responsible in paying off your loan. On top of the low interest, you can take home a large lump sum if you have a pricey asset. However, a secured personal loan Singapore might not be for you if you have no eligible collateral. That’s why you must assess beforehand if a potential loan will suit your financial capacity before borrowing. 

Why Get An Unsecured Loan At Cash Mart Singapore?

A secured loan Singapore is genuinely advantageous for the interest rates and loan amount. However, the application process is lengthy and tedious, so it is not advisable if you have urgent cash needs. Verifying assets takes time and often delays the loan procedure.

You can apply for unsecured personal loans if you need a quick cash loan. These loans are often available online and do not need collateral. The verification procedure includes your eligibility to repay the loan, which you can present through your payslip. Most importantly, legal moneylenders disburse instant cash within a day or two. 

Cash Mart Singapore is a trusted and licensed money lending company. It approves low-interest personal loans without putting valuable assets at risk. Most importantly, it caters to everyone in the country. Singapore citizens, permanent residents, and even foreigners can apply and get approved quickly. No wonder Cash Mart is a go-to financial aid company in the country. 

Most importantly, Cash Mart is accessible anytime, anywhere. You can start your loan application wherever and whenever you may be. With them, you can always be financially prepared for whatever life throws. 

Frequently Asked Questions About Secured Loan Singapore

What happens If I missed my payment for secured loans?

You will face the consequences of missing your monthly payment. Often, creditors will provide a short grace period for the late payment, which will cost you a penalty fee. If you pay later than 30 days, it can damage your credit score. 

If you think missing out on a payment is inevitable due to your life circumstances, contact your trusted lender immediately. 

Is personal loan a secured loan?

Yes. Your personal loan can be a secured loan, too. It is possible if you use one of your assets, like a car, to back up your loan application. The lender can forfeit the collateral you used if you fail to repay or default on your loan. 

What if I default on my secured personal loan?

A loan default occurs when you can’t repay your debt within a specific time, breaching your loan contract. If you ever default on your secured loan Singapore, your lender will seize your collateral to cover your outstanding loan balance.

In addition, your lender will apply for foreclosure actions against you based on the loan you used. For example, creditors will repossess your vehicle if you take a car loan. 

If you foresee the possibility of defaulting on your secured personal loan in Singapore, take precautionary measures to minimise the negative effects. Contact your trusted lender immediately and elaborate on your current financial standing. Renegotiating the loan terms is possible. Licensed moneylenders in Singapore are reasonable and considerate of their borrowers. 

Can I find lower interest rates for a secured loan Singapore?

Yes. You must compare the secured personal loan Singapore interest rates various lenders offer. You can check the banks’ official websites and financial facilities. You may also use online comparison tools for faster assessment. 

Often, a secured loan Singapore has lower interest than unsecured loans. Your lender has a sense of security through your collateral, unlike the unsecured loan, which depends solely on your creditworthiness. 

Is a bank relationship necessary when applying for a secured loan Singapore?

Yes and no. If you apply for a savings-secured loan, you must have an active account with the financial facility. But it is necessary if your secured loan Singapore is a home mortgage or auto loan. Be vigilant in comparing the perks of obtaining a secured loan from your affiliated banks. Often, competitive interest rates are available from institutions where you have existing accounts.