Your Ultimate Guide to borrowing from a licensed Money Lender in Singapore

Are you in desperate need of money? This is where a licensed money lender comes in handy. It might be hard to get a loan from a bank. They have strict lending procedures, rules, and long approval times. Often, Singaporeans who apply for a bank loan will get rejected because they:

  • currently have a low credit score
  • have a history of bad credit
  • are currently jobless
  • have low income
  • lack enough financial information
  • and more…
money lender singapore

Needless to say, getting a bank loan is no walk in the park. Plus, living in Singapore, a country renowned for its high cost of living, has its daily challenges. Weddings and HDB apartments will likely blow a hole in your wallet and leave you scrambling even if you have good saving practices.

Thus, it is common for Singaporeans to reach out to reliable money lenders in Singapore for their financial needs.

You want a dependable, understanding, licensed money lender. Not one that puts up a facade only to hound you relentlessly for money later. There is a strategy to choosing a good money lender and we will be addressing them in this article.

Here is your ultimate guide about money lenders in Singapore.

Click here to see SG Top Choice’s full list of licensed money lenders in Singapore.

 
Your Ultimate Guide to Money Lending in Singapore
    Add a header to begin generating the table of contents

    What Is A Licensed Money Lender?

    Licensed money lenders are money lenders that are approved and governed by Singapore’s Ministry of Law (MinLaw) and the Registry of Moneylenders (ROM).  

    They offer a multitude of loans to Singaporeans and foreigners alike (that we will address later in this article). They are much more flexible with approvals and repayment options compared to banks so borrowers receive financial aid fast.

    They also have to comply with behavioral standards, unlike unlicensed money lenders.

    How do i Verify if a Money Lender Is Licensed?

    You can find a full list of licensed money lenders here on SG Top Choice, or the Ministry of Law’s page. This list changes once in a while so do check on it before you make any money lending decisions. 

    Licensed Money Lender Responsibilities

    money lender singapore

    Disclose all details and answer all questions

    All licensed money lenders in Singapore are required (by law) to:

    • explain the terms and conditions of the loan in a clear and succinct manner
    • answer any questions/concerns you might have 
    • speak with you in a language that you understand 
    • state all terms and conditions involved with the loan contract

    Thereafter, you will sign a form that verifies your understanding of the loan’s terms and conditions fully. 

    Provide copies of important documents for you

    • Signed Loan Contract – Both borrower and licensed money lender must have a separate copy of the contract that they signed. 
    • Receipt – Licensed moneylenders must provide the borrower with a copy of the receipt that shows all of their payments through the money lending process.  
    • Statement of Accounts – You should receive a statement of account for all your loans, at least once every January and July. The document must present a complete and detailed report of all your payments, penalties, and interest rate.

    Failure to do any of the above allows borrowers to justly file a complaint regarding the money lender. You can contact the Registry of Money Lending at 1800-2255-529 or pursue the matter through the Small Claims Court. 

    Explain loan limitations

    The lenders must explain the limitations of their loan services and give caution to the borrowers. This allows borrowers to rethink their decision before making the final call to borrow money. 

    how much can you borrow from a Licensed money lender?

    money lender singapore

    Loan Principal

    The loan principal is the amount that you borrowed, or the amount that you owe. For example, you borrowed an initial amount of $7000, that is your loan principal. If you pay off the first $1000, the remaining $6000 is your loan principal.

    Here’s a table to illustrate the maximum amount that you can borrow from a licensed money lender in Singapore. 

    fees and interest rates

    Licensed money lenders in Singapore are strictly regulated by the Registry of Moneylenders and can only charge the following fees:  

    • Administration fees of not more than 10% of loan principal
    • Interest Rates of not more than 4% of loan principal per month
    • Late interest fees of not more than 4% per month 
    • Late payment fees of not more than $60 per month
    • Legal costs ordered by the court for the recovery of a loan

    Licensed money lenders can only charge administration fees after your loan has been approved.  

    Late interest rates are only charged on the remaining amount due. For example, if you have paid off most on your loan, $45,000 out of $50,000, the 4% late interest rate is calculated based off the remaining $5000 only, 

    In addition, only outstanding amounts due can be charged. If you owe a total of $5000, but fail to pay for a single monthly installment of $500, the late interest calculated will only be charged to the $500, not the other $4500 owed because it is owed – but not due yet.    

    Why Borrow From A Licensed Money Lender?

    money lender singapore

    Aren't banks better than money lenders?

    Well, it depends. 

    Under certain circumstances, you would want to borrow from a bank because overall, they are large, established organizations that can afford to part with large sums of money at once. 

    Banks can give you a much larger loan, upwards of thousands of dollars, and even 10 times your monthly income! But banks are notorious for long wait times, strict analysis of the borrower’s credit history, and stricter approval procedures.

    Often, Singaporeans are rejected because of their ‘less than perfect’ credit score and low monthly income. They will need to take loans from private money lenders or friends and family to tide them by. Or they could desperately struggle to pay off current debts and improve their credit score before applying for a bank loan once more.

    advantages of borrowing from money lenders over banks

    In general, private money lenders reliably provide support for Singaporeans in urgent need of money. Private money lenders:

    • are faster with approval rates
    • require fewer documents
    • have fewer restrictions regarding credit score, citizenship, or income 
    • have shorter payment terms (clear your debt quicker & spend less time paying off interest)

    How quickly can a private money lender approve your loan? For certain money lenders in Singapore, you can get your loan approved and released within 5 minutes! This is perfect for people who need money in their pockets ASAP for unforeseen circumstances like accidents and job loss. It is even better for those who want to skip the hassle of applying for a bank loan. 

    Who wants to wait around nervously for several days to hear back from the bank about the loan, only to find that your request is rejected for such and such reasons? A private money lender gets back to you quickly, and the chances of getting your request approved are much higher. 

    In addition to this, borrowing from a licensed money lender in Singapore is surprisingly safe. They are not loan sharks that chase down and harass their victims, but legal, professional money lenders that abide by Singapore’s Money Lenders Act – a set of regulations imposed by Singapore authorities to protect borrowers against unfair lending practices.

    What is an illegal, unlicensed Money Lender?

    money lender singapore

    Unlicensed moneylenders (otherwise known as loan sharks) are known for their illegal operations and high-interest rates/ fees. They are not approved or registered with Singapore authorities and therefore, do not comply with laws to protect the borrower. 

    Unlicensed money lenders prey on the weak and vulnerable by promising easy money while withholding information so that borrowers rack up debts while in contract with their services. Licensed money lenders are prevented from doing this as they are under strict scrutiny by Singapore Authorities.

    Most Singaporeans probably have encountered one, through message or social media at some point. Nowadays, unlicensed money lenders are all around the Internet. It is so common that it might be hard to differentiate from licensed money lenders (mostly due to the negative stigma about money lending in general).

    Let’s address the dangers of servicing with unlicensed money lenders and how you can prevent yourself and your family from falling into this trap.

    how do i identify an unlicensed money lender?

    licensed money lender singapore

    They are not on the Registry

    Look for the full list of licensed money lenders here on SG Top Choice, or the Ministry of Law’s page. If the money lender organization is not listed here, they are unlicensed, illegal companies.

    Click here to see SG Top Choice’s full list of licensed money lenders in Singapore.

    they do not have an office

    Licensed moneylenders in Singapore are required (by law) to have a physical office for their operations. Borrowers may express interest and provide relevant information on their company website, but ultimately, borrowers must go to the office for face-to-face consultation and verification. 

    Check the money lender’s website for their address. If it is absent, you can safely assume that they are an unlicensed company. 

    they offer 24/7 services

    Licensed money lender organizations are legitimate businesses. Employees have CPF and benefits, and offices close after work hours. No licensed money lenders operate their offices 24/7 in Singapore. 

    The only exceptions are loan applications on the money lending company’s official website. 

    Note: Borrowers still need to visit the money lender’s offices for face-to-face consultation and verification. 

    they try to initiate Remote Loan registration

    All licensed money lenders will verify your identity face-to-face and ensure that you understand their services and fees before you sign. Your application will never be approved online, over SMS, phone call, or email alone. 

    If a money lender offers a loan without needing to meet face-to-face, you know that you are dealing with an unlicensed dealer.

    Suspicious Advertising

    As stated by the Ministry of Law, licensed money lenders in Singapore are only permitted to advertise through:

    • Business or consumer directories 
    • Websites belonging to the licensed money lender 
    • Advertisements placed within or on the exterior of the licensed money lender’s business premises

    Licensed money lenders are not allowed (by law) to advertise by: 

    • flyers
    • text message
    • email
    • any other media forms

    If you see a money lender that advertises using any of the above channels, they are either licensed money lenders who have broken the law, or unlicensed money lenders who are not authorized by the Ministry of Law.

    Do your part and report these advertisements to the Registry of Moneylenders at 1800-2255-529 or to the Ministry of Law themselves on their website.

    There has been an influx of illegal, unlicensed money lending loan sharks these days. If you’ve received flyers, messages, emails, or other forms of advertisements that are not permitted under the rules, do not respond. Block and report. 

    They don't initiate an explanation of their rates and fees

    Money lenders (by law) have to ensure that you understand the details of the contract you will be signing. Even if you fully understand it and don’t require an explanation, they need to go through it for formalities sake. 

    They don't Confirm Your Ability to Repay the Loan

    Unlicensed money lenders (aka loan sharks) mainly get their money through inflated interest rates. So the longer you struggle to pay them back, the more money they get.

    Licensed money lenders must verify if the borrower has the financial means to pay them back so that there are low chances of the borrower incurring late payment fees and even lesser chances of going bankrupt. They want you to trust them and use their services again, unlike unlicensed money lenders who want borrowers to accumulate late fees until they are drained of money.

    Summary: Banks are strict when it comes to these checks, licensed money lenders are more lenient, and unlicensed money lenders do not care. 

    Expensive processing fees and interest rates

    If they ask for more than what is stated below, refuse their services. All legal money lenders must comply with the rules stated by the Ministry of Law and the Registry of Moneylenders.

    • Administration fees of not more than 10% of loan principal
    • Interest Rates of not more than 4% of loan principal per month
    • Late interest fees of not more than 4% per month 
    • Late payment fees of not more than $60 per month
    • Legal costs ordered by the court for the recovery of a loan

    they ask for your singPass ID and/or password

    No legitimate money lender or bank will ever ask you for this. You should be the only person who knows your SingPass ID and password.

    they take your important documents and NRIC for "safekeeping"

    Licensed money lenders always return your NRIC and identification documents after confirming their details. 

    Their Contract is missing crucial details

    Licensed money lenders are required (by law) to read out the contents of the contract and explain them to the borrower properly and in their preferred language.

    The money lending contract must include information such as the loan principal, repayment procedures, late fees, and interest rate. If the contract is missing any of the important information, you should proceed to decline their services as soon as possible. 

    Note: If they do not even have a contract for you to sign, that is 100% an illegal, unlicensed money lending operation. 

    Unethical behavior

    Be on the lookout for “pushy sales” from money lenders, abusive language, or threatening behavior of any kind. 

    Licensed money lending employees are salaried and have no businesses bugging you to take up a loan. They should be professional at all times and not lose their tempers when you hesitate to sign a loan contract. If they show any signs of hostility, that may be a sign that they are unlicensed money lenders who are commissioned to take your money.

    How do i report unlicensed money lenders in Singapore?

    You can report these illegal companies to the Registry of Moneylenders at 1800-2255-529 or to the Ministry of Law on their website.

    Types Of Loans Offered By Licensed Money Lenders

    types of loans offered by money lenders in singapore

    2 main loan categories

    • Secured: Lenders offer you lower interest rates in return for the borrower offering assets as collateral or guarantors. 
    • Unsecured: Higher interest rates are given because the loan is riskier without any collateral or guarantor. 

    Types Of Loans Offered By Money Lenders

    This is not an exhaustive list. Different licensed money lenders have different loans and services for each individual. Do consult with them and ensure that the service and loan you are paying for are the best options for your situation.

    There are student loans and mortgage loans as well. But the following below are the most popular options among Singaporean money lenders.

    personal

    Personal loans are for the borrower’s own use. This is the most common type of loan in Singapore. It can be used to finance a wedding, vacation, funeral costs, and other personal events. 

    Foreigner

    Foreigner loans are accessible to permanent residents or non-citizens studying, working, or living in Singapore

    Payday

    Payday loans are for Singaporeans whose monthly salaries are delayed or bounced for whatever reason. This amount you can borrow is only limited to one month to tide you through the period and it must be repaid in a shorter time frame compared to regular loans.

    Business

    Business loans are for those who are interested in starting a business, or for business owners undergoing hard times. The amount you can get from this loan is a lot bigger, upwards of 100,000, coupled with higher interest rates and a longer repayment term. 

    Note: This loan’s interest rates are the only exception.

    Things To Consider Before Borrowing From A Money Lender

    Do you Really need a loan?

    There is always a risk when it comes to borrowing money. From banks to money lenders, and even friends and family. So it is best to do some self-reflection before you decide on anything.

    • Will your financial situation be solved with better saving habits?
    • Have you tried applying for higher-paying jobs?
    • Can you pawn off some items you don’t need from your home?
    • Is there any way you can hold off on payment until you can get your next paycheck?

    government financial schemes and charity organizations

    licensed money lender singapore

    Take some time to do your research. There are government financial schemes that you can take advantage of like “SupportGoWhere“, and other charitable institutions that can assist with your debts – giving you a chance to settle your bills and improve your credit.

    How much money do you actually need?

    Pro Tip: Only borrow what you can repay.

    There is no reason to borrow more than you need. The more you borrow, the more you need to pay off as interest. 

    Can you afford to repay your money lender?

    You are legally obliged to repay the money lender once you sign a contract with a licensed money lender. 

    • Are you getting back your next paycheck soon? 
    • Is the money enough to repay the monthly interest rates?
    • Will you be spending my paycheck on other factors, and can you withhold on them until your debt is repaid?

    Late payment fees can accumulate and become a great financial strain if you lose track of them and are not careful with saving money. 

    are you prepared to submit your Credit Report?

    It is recommended that borrowers get a credit report from the Credit Bureau Singapore (CBS) or the Moneylenders Credit Bureau (MLCB).

    Borrowers must submit their credit reports to banks for a loan, but a majority of licensed money lenders do not require it. Still, to save time while exploring options, borrowers should get their credit report so that when the few licensed money lenders request it, there won’t be any delays. 

    do you have the other necessary documents?

    Do contact your chosen licensed money lender about what documents you need to prepare ahead of a loan application. As a guide, the following should be sufficient:

    • Proof of income 
    • Proof of employment
    • Proof of Address
    • NRIC/Passport
    • Birth Certificate

    Money Lender Tips You Should Keep In Mind​

    licensed money lender singapore
    • Compare contract terms with other licensed money lenders. Don’t jump on your first pick. Money is a sensitive issue and you want the contract to be beneficial to you. It’s recommended that you check offers from other money lenders until you find one that best suits your needs.  The terms and conditions should be agreeable and doable.
    • Consider carefully before agreeing to sign any contract. If the repayment is taken from the net proceeds from the sale of the property, it can wipe out all or a substantial portion of the proceeds.
    • Ask questions if you are unsure of procedures or on any terms and conditions. Make sure that you understand what you are getting yourself into 100% so that you won’t be caught off guard later, or miss repayments.
    • Ensure money lenders charge the right amount of money. Do not trust money lenders (licensed or not) to not make human mistakes. They should also not be charging any more than what is legal and agreed upon.
    • Ensure money lenders issue: a copy of the loan contract, receipts for every payment you’ve made, a statement of accounts, and any other relevant documents.
    • Pay loan installments on time to avoid late payment fees. 
    • Keep all important documents in a file for safe-keeping, until the debt has been settled fully and completely.
    • Avoid taking up too many separate loans (many different loan types and loan companies) as it can be difficult to keep track of finances.

    What Are Your Legal Options if you are Unable To repay The Loan?

    money lender repayment plan singapore

    Request For an Extension

    Have a conversation with your money lender agent and discuss penalty fees and the possible negotiation for an extension of repayment terms. 

    Seek external assistance

    There are government financial schemes that you can take advantage of like “SupportGoWhere“, and other charitable institutions that can assist with your debts – giving you a chance to settle your bills and improve your credit.

    File For Bankruptcy

    A borrower can file for bankruptcy if they:

    • owe at least S$15,000 worth of debt
    • have no other possible way to repay their debt

    Upon being bankrupt, their assets will be sold and the proceeds put into a bankruptcy estate. Debtors can pay off their bankruptcy estate and eventually be discharged from bankruptcy.

    Although no one wants to be bankrupt, it actually helps as your debt amount will be frozen and your interest rates accumulated canceled. You will be given discount repayment prices and money lenders cannot sue you for your debts.

    Know Your Rights As A Borrower

    rights as a borrower money lender

    What A Licensed Money Lender Can Do

    Hire debt collectors

    When borrowers are unable to follow through on their repayment plan, licensed moneylenders hire debt collection agencies to collect their debts.  

    It’s not as scary as it sounds. Keep in mind that debt collectors abide by the code of ethics laid down by the Credit Collection Association of Singapore (CCAS)

    Debt collectors are not allowed to

    • Assemble with three or more people to hound you for money and “disturb the public peace”. 
    • Use abusive language and threaten with physical violence.
    • Harass and stalk you around your property/ in the void deck, etc.
    • Prevent you from leaving your home.
    • Vandalize and defame your property with spray paint, pig’s head, etc. 
    • Steal and take from your property (unless you and the money lender have agreed in court to seize certain property as repayment)
    • Impersonate the police/ authority figure
    • Forge documents for you to sign

    If you experience any of these events, you can seek protection from the law. Call the police immediately. 

    Talk to people you know about your debt

    They might say, “Can you tell xxx to repay his/her debt?” to your friends, family, and coworkers, and get away with it because it is completely legal. 

    But if you or the recipient feels threatened or harassed by the money lender/ debt collector’s continuous attempts, it can constitute unlawful harassment.

    What A Licensed Money Lender Can't Do

    Money lenders are limited in what they can do, just as much as the debt collectors that they hire. Money lenders are not allowed to

    • Assemble with five or more people to hound you for money and “disturb the public peace”. 
    • Use abusive language and threaten with physical violence.
    • Harass and stalk you around your property/ in the void deck, etc.
    • Prevent you from leaving your home.
    • Vandalize and defame your property with spray paint, pig’s head, etc. 
    • Steal and take from your property (unless you and the money lender have agreed in court to seize certain property as repayment)
    • Impersonate the police/ authority figure
    • Forge documents for you to sign

    If you experience any of these events, call the police ASAP. 

    What To Do If You Are Harassed By A Money Lender or debt collector

    If the money lender or debt collector is not being reasonable with their actions and words, there are some actions you can take. 

    Is the money lender/ debtor’s actions legal? (check above information) If YES,

    • Comply with repayment terms
    • Negotiate repayment terms
    • Seek external assistance to resolve the debt (government finance assistance/ charity organizations)

    Is the money lender/ debtor’s actions legal? (check above information) If NOT,

    • Call the police
    • Submit a complaint to the CCAS

    In Conclusion

    When you require urgent financial aid and don’t want to spend most of your time trying to appeal for a bank loan, it’s best to take up services with a licensed private money lender.  

    There are many reliable and helpful ones out there. However, there is also an increasing about of scammers who seek to disguise themselves as legitimate licensed money lenders to trick individuals and families of their money. Banks have also been struggling with imposters messaging in the name of their brand. 

    Protect yourself against these fraudsters and loan sharks by doing your due diligence with research and engaging the services of a good licensed money lender.

    Click on the “Finance” tab above to find the best licensed money lenders near you, as presented by SG Top Choice.

    Frequently Asked Questions (FAQs)

    The Moneylenders Act protects borrowers against unfair practices by setting rules on money lenders operating in Singapore. 

    Under this act, the Registry of Moneylenders approves and licenses companies that wish to operate as legal money lenders. This means that each company should have a unique license and abide by the rules set by the Ministry of Law and Registry of Moneylenders.

    Money lenders are also responsible for ensuring that borrowers are financially capable of repaying their loan before granting credit approval (regardless of amount).

    Yes, private money lending is legal in Singapore, as long as they are licensed by the Ministry of Law (MinLaw) and the Register of Moneylenders (ROM). You can check the list on MinLaw's website. 

     

    Licensed money lenders are just as legit as banks. The only difference is that (1) banks can offer a larger sum of money, (2) banks are slower with approval times (3) banks are stricter with their requirements, (4) banks have longer repayment terms - borrowers have more time to pay off their debt, but they also more accumulated interest the longer the term.

    Licensed money lenders are legitimate businesses that are approved and governed by Singapore’s Ministry of Law (MinLaw) and the Registry of Moneylenders (ROM).  

    They offer a multitude of loans to Singaporeans and foreigners alike (that we will address later in this article). They are much more flexible with approvals and repayment options compared to banks so borrowers receive financial aid fast.

    They also have to comply with behavioral standards, unlike unlicensed money lenders (aka loan sharks).

    4% per month. Excluding Business loans.

    You can report these illegal companies to the Registry of Moneylenders at 1800-2255-529 or to the Ministry of Law on their website.

    The Registry of Moneylenders cannot assist you with negotiations as this is a private contract between the moneylender and the borrower.

    You may wish to approach social service agencies that provide credit consultations and assistance in negotiating a debt repayment plan with creditors.

    • Credit Counselling Singapore*
      Address: 51 Cuppage Road #07-06, Singapore 229469
      Tel no.: 6225 5227 / 6338 2663
      Email: enquiry@ccs.org.sg
    • One Hope Centre

      Address: 8 New Industrial Road #04-04B LHK 3 Building Singapore 536200
      Tel no.: 6547 1011
      Email: help@onehopecentre.org
    • Silver Lining Community Services
      Address: (East) 11 Playfair Road Singapore, (West) Jurong Spring CC, 8 Jurong West St 52 Singapore 649296
      Tel no.: 6749 0400
      E-mail: admin@silverlining.com.sg
    • Blessed Grace Social Services
      Address: 16 Arumugam Road, #04-02B Block D, LTC Building Singapore 409961
      Tel no.: 8428 6377
      Email: billy.lee@blessedgrace.org
    • Arise2Care Community Services
      Address: No. 5 Harper Road #02-01A Singapore 369673
      Tel no.: 6909 0628
      Email: admin@arise2care.sg
    • Association of Muslim Professionals (AMP)
      Address: 1 Pasir Ris Drive 4 #05-11 Singapore 519457
      Tel no.: 6416 3960
      E-mail: corporate@amp.org.sg
    • Adullam Life Counselling
      Address: 151 Chin Swee Road #08-04 Manhattan House Singapore 169876
      Tel no.: 9423 8832
      E-mail: admin@adullam.org.sg

    You should ensure that

    • you understand your responsibilities as a surety 
    • you receive a copy of the Contract at the time that the loan is granted to the
      borrower
    • the lender has explained the terms in the Note of Contact in a language that
      you understand
    • the moneylender does not keep your NRIC card or any other personal documents
      (e.g. driver’s license, passport).
    • the moneylender does not acquire any information that contains passwords to your accounts (e.g. Singpass account, Internet banking account, email account).

    The Registry of Moneylenders will not disclose your details to the moneylender without your consent. You may need to attend an interview with our officers to provide us with all relevant information and documents related to your case. The Registry views complaints against moneylenders seriously and will investigate them thoroughly. 

     

    If a moneylender has engaged in an unfair practice towards you, you can pursue the matter through the Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act.

     

    The Court also has the power to set aside loan transactions that are exorbitant or substantially unfair.

    Yes, they can. It's also legal for them to call you at your place of work.

     

    However, if their actions are causing you distress and makes you feel unsafe, it can arguably be constituted as "unlawful harassment".

     

    If the debt collector is following you everywhere, taking pictures and videos, emailing your work email constantly and it causes you distress, they can be charged with "unlawful stalking".

     

    Note: Stalking must be a repeated occurrence.

    Definitely! There are licensed money lenders that provide foreigner loans. But, not all of them provide that service, so you are encouraged to do your research first.

    Yes you can, you can even use several borrowing services from the same lender. But these are discouraged. You could get overwhelmed very easily and lose track of your repayments.

    Still, the option is available. You should be fine if you can afford repayment and stay on top of your deadlines. 

    Banks are different from private money lenders.

    Banks are financial institutes, while private money lenders are businesses licensed by Singapore authorities to lend money on a smaller scale to Singaporeans. 

    The size, scale and impact of the two are not comparable. 

    Scroll to Top