Being a freelancer, you are free to choose what type of work you are going to do, in short, you are your own boss. As per Inland Revenue Authority in Singapore (IRAS), freelancing is a form of self-employment and it can include commission-based agency work, driving a taxi or running an online business. All these makeup more than 50% of the total self-employed population. In 2016, about 300,500 individuals were running a business or trade by themselves.  In 2017, about 14% of the Singaporean workforce was self-employed and this number rapidly increased as an effect of MOM’s (Ministry of Manpower) promotional campaigns for self-employment.

With the freedom to work on one’s own conditions, freelancing also has certain disadvantages, one of them is uncertainty in terms of income that apparently harshen the chances for obtaining a loan for freelancers. As the freelancers do not get a fixed salary in comparison to the employed workers, they may need to look out for the options of borrowing money to pay their bills or in case of any financial emergency.

Getting a personal loan for freelancers is a tough task in Singapore because banks and the other financial institutions ask for a fixed income receipt to ensure the repayment of the loan, thereby freelancers in Singapore usually have the option of approaching private moneylenders to get the loan. Even the Ministry of Manpower in Singapore has acknowledged the challenges faced by freelancers in getting loans and has introduced a new rule, where banks, financial institutions, and moneylenders have revised their terms and conditions for improving the chances for freelancers/self-employed people to get the loan.

However, you need to assure the moneylenders that you are capable enough to repay the loan and for this, they will ask you for the following documents:

• CPF Statements for up to 12 months
• Income Tax Notice or Assessment for 2 years’ income
• National Registration Identity Card for up to 12 months

Credit Score

This factor plays an important role to decide whether you will be able to obtain a loan or not. If you use any credit card or have any previous loan history, repayment of their bills and installments will be checked along with the criteria on which you were given a loan. Negative credit score can negate the chance of obtaining a loan and it can be improved via the following tips:

• Monitor and reduce your credit card balance and debt regularly
• Do not exceed the sanctioned limit and pay the bills on time without any delay

Moneylenders

Since the chances of getting a loan from a bank for a freelancer/self-employed is uncertain, you can head towards a licensed moneylender. In comparison to the banks and other financial institutions in Singapore, licensed moneylenders have less stringent requirements and processes when it comes to applying for loans. While the list of licensed moneylenders in Singapore that offer loans to freelancers is very short, you may be merely left with few options to choose from based on their authenticity to provide loans and interest rates offered.

Therefore, whenever you apply for a loan, research well and understand every aspect of getting a loan. It may be difficult for freelancers to secure a loan for emergency financial needs, but with the changing policies, there are many private moneylenders offering loan at low-interest rates.