3 Factors That Affect How Much Personal Loan You Can Get

Citi Quick Cash Personal Loan - how much personal loan can you get?

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Taking a personal loan can come in handy during various life stages — such as your home renovation (renovation loans don’t cover all the random bits and bobs), and even further education.

When taking up a personal loan, most people tend to look out for the lowest interest rate available. That’s a smart move, as the lower the interest rate, the more money you save!

The Citi Quick Cash personal loan offers some of the lowest interest rates in town, with rates going for as low as 3.45% (EIR 6.5% p.a.)* and no processing fees. They also offer a loan tenure of up to 5 years and can lend you up to 8 times your monthly income, depending on your monthly income and subject to the bank’s approval.

​​*Applicable to New Citi Credit Card and/or Citibank Ready Credit Card customers only. Terms and Conditions apply.

Citibank logo

Per Month

S$446

Per Month
MoneySmart Exclusive
Interest Rate*
EIR: 6.5%
3.46%
Total Amount Payable
S$10,692
Processing Fee
S$0
Per Month
S$446
MoneySmart Exclusive:

Receive a Sennheiser MOMENTUM True Wireless 3 (worth S$399) OR an Apple iPad 10.2-inch Wi-Fi 64GB (worth S$499) OR an Apple Watch Series 7 GPS, 45mm (worth S$649) OR up to S$550 when your Citi Quick Cash personal loan application is approved! Simply apply with MyInfo for a faster journey to your gift! T&Cs apply.

Valid until 30 Sep 2022

But how much should you borrow? Here’s how to determine the amount.

 

1. Your monthly income

The first thing you need to take note of when choosing a personal loan is your monthly income, as this affects how much you are able to borrow according to your available credit limit.

For example, new-to-bank customers taking up the Citi Quick Cash personal loan who satisfy the minimum annual income of S$30,000 for Singaporeans and PRs / S$42,000 for foreigners can borrow up to 4 times of their monthly income, subject to the bank’s approval. If your annual income is S$120,000 and above, you can borrow up to 8 times of your monthly income, subject to the bank’s approval. The personal loan will be taken up based on the available credit limit assigned to their credit card.

Scenario 1
Let’s say you have an annual income of S$48,000. Assuming there is no spending on your account, you can apply for a credit limit of up to S$16,000 ($4,000 x 4), equivalent to four times your monthly income. Of this assigned credit limit of S$16,000, you may wish to take a loan of S$12,000 and use the remaining S$4,000 for personal and retail expenses.

Scenario 2
If you have an annual income of S$120,000, you can apply for a credit limit of up to S$80,000 (S$10,000 x 8), equivalent to 8 times of your monthly income, subject to the bank’s approval. Of this assigned credit limit of S$80,000, you may wish to take a loan of S$70,000 and use the remaining S$10,000 for personal and retail expenses.

That said, don’t be kiasu and borrow the maximum amount unless there is a pressing need to do so. Only borrow what you need — don’t forget, you’re paying interest on your loan.

Keeping monthly repayments in check

You might want to limit your total monthly loan repayments to a maximum of 30% of your monthly income. This helps to ensure that you will be able to maintain your loans and not overstretch your financial liability.

Let’s look at Tom, who has a monthly income of S$6,000 and an existing home loan at S$1,500/month. He wants to take up a personal loan for higher education but isn’t sure how much he should budget for the loan repayments each month.

30% of Tom’s monthly income is S$1,800.

Hence, after deducting his existing home loan, he should keep his personal loan repayments to S$300 a month and below.

To suit his budget, he can adjust the loan tenure, up to a maximum of 5 years.

 

2. Actual loan needed

As a rule of thumb, you should only borrow what you need. So, you will need to determine how much you need before taking a personal loan.

You should also only borrow less than what you need as you might encounter unexpected/unplanned costs or missed out something in your calculation.

Once you’ve worked out how much you need, you can consider taking out an additional 5% to 10% extra as a buffer, if needed.

What about situations where you don’t exactly know how much you need? In such cases, you need further planning and research to better estimate the required sum.

For example, let’s say you need to take out a loan to pay for unexpected medical treatment. You would want to do research to work out an estimate of the total costs of recovering from the condition, including the full course of treatment in the hospital or clinic, follow up visits and medical rehabilitation after treatment.

 

3. Your monthly loan repayment budget

If you have no idea how much you need to borrow, your next step will be to see how much you can afford to repay every month. From there, you can work out which loan tenure would be suitable for you.

For instance, the Citi Quick Cash personal loan offers a loan tenure of up to 5 years. Choosing the maximum loan tenure of 5 years would keep your monthly loan repayments to a minimum, while opting for a shorter loan tenure would enable you to shorten your repayment period and pay less interest overall.

For new-to-bank customers, you can use the Citi Quick Cash personal loan calculator to work out your estimated monthly instalments. Play around with different loan amounts and loan tenures until you find a monthly repayment amount that you are comfortable with.

 

Citi Quick Cash personal loan

The Citi Quick Cash personal loan offers some of the lowest interest rates in town for new-to-bank customers, from 3.45% p.a. (EIR 6.5% p.a.)*, no processing fees and a loan tenure of up to 5 years.

​​*Applicable to New Citi Credit Card and/or Citibank Ready Credit Card customers only. Terms and Conditions apply.

Borrow up to 8 times your monthly income if you earn at least S$120,000 per annum, subject to the bank’s approval.

Apply for a Citi Quick Cash personal loan today and get the cash you need at some of the lowest interest rates in Singapore. Terms and conditions apply.

Citibank logo

Per Month

S$446

Per Month
MoneySmart Exclusive
Interest Rate*
EIR: 6.5%
3.46%
Total Amount Payable
S$10,692
Processing Fee
S$0
Per Month
S$446
MoneySmart Exclusive:

Receive a Sennheiser MOMENTUM True Wireless 3 (worth S$399) OR an Apple iPad 10.2-inch Wi-Fi 64GB (worth S$499) OR an Apple Watch Series 7 GPS, 45mm (worth S$649) OR up to S$550 when your Citi Quick Cash personal loan application is approved! Simply apply with MyInfo for a faster journey to your gift! T&Cs apply.

Valid until 30 Sep 2022

Citi Quick Cash is offered by Citibank Singapore Limited and is subject to the Citi Quick Cash Program Terms and Conditions. Rates featured are for new Citi Credit Card and Citibank Ready Credit customers. Subject to Citibank’s approval.

All scenarios or examples in this article are for illustration purposes only. Any views expressed are MoneySmart’s own and not Citibank Singapore Limited’s.

This advertisement has not been reviewed by the Monetary Authority of Singapore.