Malaysia makes first rate cut in five years after US announces 25% tariff
Bank Negara Malaysia lowered its overnight policy rate by 25 basis points to 2.75 per cent from 3 per cent.
KUALA LUMPUR - Malaysia's central bank cut its benchmark interest rate for the first time in five years on July 9, as it looks to support the economy amid a weaker growth outlook and rising uncertainty in global trade.
Bank Negara Malaysia lowered its overnight policy rate (OPR) by 25 basis points to 2.75 per cent from 3 per cent, where it had been since May 2023, as had been expected by 17 of 31 economists surveyed in a Reuters poll.
The ceiling and floor rates of the OPR corridor are correspondingly reduced to 3 per cent and 2.5 per cent respectively, the central bank said in a statement.
The rate decision came a day after US President Donald Trump announced a 25 per cent tariff on Malaysian exports to the United States.
Prime Minister Anwar Ibrahim said he will appeal for lower tariffs when he meets US Secretary of State Marco Rubio on July 10.
Bank Negara said the global growth outlook was weighed down by uncertainties surrounding tariffs, as well as geopolitical tensions, which could lead to greater volatility in global financial markets and commodity prices.
While the Malaysian economy was on a strong footing, the central bank said external uncertainties could affect Malaysia's growth prospects.
'The reduction in the OPR is... a pre-emptive measure aimed at preserving Malaysia's steady growth path amid moderate inflation prospects,' Bank Negara said.
Economists had expected at least one 25-basis-point cut this year, which would hold until the end of 2026, though there was no consensus on where the rate would be then. Estimates for the end of 2026 ranged from 2.25 per cent to 3 per cent.
Malaysia has reported a string of soft economic data in recent months with growth slowing to 4.4 per cent in the first quarter, while exports unexpectedly fell in May.
Inflation has also remained relatively subdued, with consumer prices rising 1.2 per cent in June, a four-year low.
Mr Anwar said in May that Malaysia was unlikely to meet its growth outlook of between 4.5 per cent and 5.5 per cent in 2025, while Bank Negara has said it would have to lower its growth forecast range due to uncertainties arising from US tariff policies.
The central bank also lowered banks' statutory reserve requirement (SRR) ratio by 100 basis points to 1 per cent in May - the first SRR reduction since March 2020 at the start of the Covid-19 pandemic - reinforcing a dovish policy outlook. REUTERS
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If you're in urgent need of money, but are too paiseh to borrow from your family and friends, your best bet is probably a personal loan. With a personal loan, you borrow cash from a bank or financial institution and pay them back in fixed instalments over an agreed period. But you'd typically need to meet a couple of eligibility requirements before you get it approved. Stuff like your income and credit history. In this article, I'll break down the key terms you'll come across frequently while browsing loan listings — plus highlight the best personal loans currently available in Singapore. Note: Interest rates are approximate and may vary based on individual credit profiles and prevailing market conditions. Please consult the respective banks for the most accurate and up-to-date information. 1. At a glance: Best personal loans in Singapore (July 2025) Here are the current starting interest rates on offer from the most popular personal loan providers in Singapore. We'll use the example of a Singapore citizen earning $3,500 a month, who wants to borrow $10,000 and repay it over three years. Personal loan Interest rate and Effective Interest Rate (EIR) Processing fee Monthly repayment Eligibility DBS/POSB Personal Loan 1.99% (EIR 4.17%) 1% $294 – Singaporean/PR – Foreigners with existing Cashline and/or Credit Card account – Min. $20,000 annual income – Existing DBS/POSB customers Trust Instant Loan 2.22% (EIR: 4.22%) 0% $296 – Singapore Citizen/PR: $30,000 – Foreigner: $60,000 – Must have a Trust credit card CIMB Personal Loan 2.68% (EIR 5.06%) 0% $319 – Singapore Citizen/PR: $20,000 – Malaysian (residing in SG): $30,000 UOB Personal Loan 1.85% (EIR 3.40%) 0% $293 – Singapore Citizen/PR: $30,000 – UOB Credit Card/CashPlus customer Standard Chartered CashOne 1.90% (EIR: 3.63%) 0% $294 – Singapore Citizen/PR: $30,000 – Foreigner (with EP): $90,000 GXS FlexiLoan 2.88% (EIR 5.45%) 0% $303 – Singapore Citizen/PR: $20,000 HSBC Personal Loan 2.20% (EIR: 4.00%) 0% $296 – Singaporean/PR: $30,000 (salaried workers) $40,000 (self-employed or commission-based workers) – Foreigner (with EP): $60,000 Citi Quick Cash with Ready Credit (New Customers) 3.45% (EIR: 6.50%) 0% $306 – Singaporean/PR: $30,000 – Foreigner: $42,000 Applicable to new Citi Credit Card or Citibank Ready Credit account holders only. OCBC's ExtraCash Personal Loan 5.42% (EIR 10.96%) For income $20K – $30K p.a.: $100. For income above $30K p.a. : $200 or 2% of the approved loan amount, whichever is higher $323 – Singaporean/PR above 21 years old: $20,000 – Foreigner above 21 years old: $45,000 2. Hold up. What do interest rate, EIR and processing fees mean? There's quite a bit of jargon here, so let's go through some points of confusion that may be swimming around in your head. Interest rates Notice that interest rates are quoted as 'from X%' instead of being stated simply as 'X%'? That's because personal loans are pretty dynamic as they all depend on factors such as your credit history and the loan amount. EIR EIR stands for Effective Interest Rate . Taking into consideration other fees (like processing fee; see next point) and the loan repayment schedule, it is a more accurate reflection of the cost of borrowing than the advertised interest rates. Processing fees This is the main hidden cost of personal loans and is worth highlighting. The processing fee is deducted from the principal — meaning, for a $10,000 loan with a $100 (or 1%) processing fee, you get only $9,900 in cash. As a borrower, you might not 'feel' it, but it does eat into your funds and increase the cost of borrowing. Now, let's walk through the nine featured personal loan packages. 3. DBS/POSB personal loan The DBS/POSB personal loan is only open to existing DBS/POSB customers. If you already have (1) a DBS/POSB Cashline account or have a DBS/POSB credit card and (2) credit your salary into a DBS or POSB deposit account, you can get the cash disbursed instantly. The loan is open to Singaporeans and PRs, as well as foreigners with DBS/POSB Cashline or credit card accounts. You must be aged 21 to 70 years with a minimum annual income of $20,000 — this opens up DBS/POSB personal loans to include slightly older groups of people and lower income earners compared to other banks. Like the Standard Chartered CashOne loan, you don't need to earn a regular salary to be eligible for this loan. Self-employed individuals and commission earners can also apply. DBS's personal loan promises interest rates as low as 1.99 per cent. There is a processing fee of one per cent, bringing the lowest possible EIR to 4.17 per cent. Loan tenures of six months to five years are available. Do note that these are the lowest possible rates and the actual interest rate depends on what DBS is prepared to extend to you. Note that there's also a three per cent unlimited cashback deal if you apply now. 4. Trust Instant Loan (Trust personal loan) When they say "instant", they mean it. Trust's personal loan, called Trust Instant Loan, disburses cash to you in just 60 seconds with the Trust credit card. This is how it works: You have a Trust credit card with a certain available credit balance at any one point in time. The Trust Instant Loan converts a portion of that balance into cash for you. Spend that cash on anything you want! The Trust Instant Loan is open to all Trust customers. Given how it works, as I just explained above, you do need to have a Trust credit card to be eligible. But this isn't a bad thing — for one thing, it makes repaying the loan seamless. Each month, you'll see your loan instalment charged to your credit card bill. To pay the instalment, simply pay through your credit card statement via your Trust App. From now till June 15, the Trust Instant Loan is also extra affordable with an interest rate starting from just 2.22 per cent p.a. (EIR from 4.22 per cent p.a.) — down 0.27 per cent. 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Tenure Approved Loan Amount Cashback Earned 1 or 2 years Any amount No cashback 3, 4 or 5 years <$10,000 $10,000 – < $15,000 $50 $15,000 – < $30,000 $300 $30,000 – < $50,000 $600 $50,000 – < $80,000 $750 $80,000 – < $150,000 $1,000 $150,000 – < $190,000 $2,000 > = $190,000 $2,800 As far as eligibility goes, the CIMB Personal Loan is fairly standard. It's open to Singapore Citizens and Singapore PRs with a minimum annual income of $20,000, and to Malaysians earning at least $30,000 a year. You'll also need to be 21 to 70 years old — that maximum age sits between the Citibank and DBS personal loan age limit. There's no prerequisite to have a CIMB Bank Account or CIMB credit card before you apply, so go ahead as long as you meet the criteria above. Like any personal loan, you'll incur a penalty fee if you try to repay it early. For the CIMB Personal Loan, this fee is three per cent of the outstanding loan amount or $250, whichever is higher. 5. UOB Personal Loan UOB's personal loan is only open to existing UOB credit cardholders or CashPlus customers who are Singaporeans, PRs aged 21 to 65. You'll also need to be a salaried worker earning at least $30,000 a year. Not an existing UOB customer? You'll have to get a UOB credit card or CashPlus to apply for a UOB Personal Loan. The interest rate is from 1.85 per cent p.a. for loan periods of 12, 24, 36, 48 or 60 months, with a 3.40 per cent p.a. EIR. While UOB used to only waive processing fees for loan periods 24 months and up, processing fees are now waived for all loan periods. If you're an existing UOB customer, you can get instant approval when you apply for your personal loan online. To further sweeten the deal, from now till July 31, 2025, you can get up to two per cent cash rebates for approved personal loans worth at least $15,000 with repayment period between of 3-5 years. 6. Standard Chartered CashOne Standard Chartered CashOne personal loan is open to Singapore Citizens, PRs and foreigners with a Singapore Employment Pass aged 21 and above. The barriers to entry for the Standard Chartered CashOne personal loan have gone up slightly. The minimum annual income requirements are now $30,000 for Singaporeans and PRs and $90,000 for foreigners. You also don't necessarily need to be a salaried worker to apply — Standard Chartered is cool with salaried employees, variable/commission-based employees, and even self-employed individuals. You can apply for this personal loan online by signing in through Singpass and receive your loan disbursement within 15 minutes — it's super easy. There's no need to be an existing Standard Chartered customer to get this personal loan. So, it's fast — but is it also affordable? Standard Chartered charges an initial annual fee of $199 (deducted from your approved loan) for any loan tenure between one to five years. 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HSBC personal loan HSBC's personal loan is open to Singaporeans and PRs aged 21 to 65 years old with an annual income of $30,000 and above for salaried workers, and $40,000 for self-employed or commission-based workers. Foreigners must earn at least $60,000 a year and have an employment pass with at least six months' validity. The best part about HSBC's personal loan is its long loan tenure of up to seven years — currently the longest loan tenure in Singapore. So if you need to borrow a large sum but can't afford high monthly repayments, HSBC's personal loan is definitely one you should consider. HSBC has dropped their promotional interest rates even further now starting from 2.20 per cent p.a. with an EIR from 4.00 per cent p.a. with no processing fees. Remember, however, that actual interest rates will vary from person to person. Another factor to consider is that HSBC's personal loan comes with an annual fee of $120, and only the first year's fee is waived. 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OCBC ExtraCash personal loan While the OCBC ExtraCash Personal Loan has the highest interest rates (from 5.42 per cent p.a. / EIR from 10.96 per cent p.a.) on this list, it does come with some perks that might make it a solid choice for some. If you need a large loan, you can borrow up to six times your monthly income, with fixed repayments spread over 12 to 60 months. Like many of the other loans mentioned, it offers fast disbursement when you sign up via Myinfo. Plus, it has a relatively low entry requirement — just $20,000 in annual income for Singaporeans and PRs. You'll also be able to easily see a full breakdown of all your outstanding payments via internet banking. However, punctual repayments are a must. A late payment will set you back $80, and if you decide to restructure or repay early, you'll be charged a three per cent fee on your outstanding balance. So, be sure of your loan tenure before committing! 12. Which personal loan should you choose? Cheapest personal loans – Standard Chartered CashOne personal loan – Trust Instant Loan – DBS or POSB Personal Loans – UOB Personal Loan Personal loans with fastest disbursement – Trust Instant Loan – GXS FlexiLoan – CIMB Personal Loan – HSBC personal loan Personal loan with longest repayment tenure – HSBC personal loan Personal loans to consider if you want to take a huge amount – Standard Chartered CashOne personal loan – OCBC ExtraCash Personal Loan Whatever personal loan package you choose, opt for the smallest loan amount and shortest term you can comfortably manage. This will keep your interest payments to a minimum. Remember that the actual interest rate a bank offers you will depend on factors like your credit history, how much you want to borrow and for how long. So if you don't get offered the lowest advertised interest rates with one bank, you might want to compare that with what the other banks are willing to offer you. 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If you must take out a loan, channel all your energies into paying it off on time to avoid late charges. In the meantime, re-examine your income and budget, making a note of everything you spend on, so you won't have to resort to loans again. Ideally, you should draw up a budget that gives you enough leeway to set aside some cash for the future without starving to death. You should also build up an emergency fund worth a few months' expenses. If you're hit with unforeseen circumstances, you can dip into this fund instead of having to take a loan. It's also a good idea to know what types of insurance you need. We recommend hospitalisation insurance at a bare minimum, and life insurance if you have dependents. Being sufficiently insured ensures that you don't get hit with huge bills if the unexpected happens. [[nid:719513]] This article was first published in MoneySmart .
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