Anybody in Singapore has access to excellent financial products. Sadly, many unscrupulous individuals make it their business to dupe people into long-term loans with unfair and illicit terms.

Fortunately, Singapore’s government continues to crack down heavily against illegal lending practices. The Singapore Moneylenders Act of 2008 ratified microlender legitimacy, allowing heavy activity regulation among small-amount and instantly-accessible financing for Singaporeans and foreigners.

While Singaporean institutions made it easy to apply for a personal loan, first-time borrowers might still get confused with everything involved in borrowing from lenders in Singapore. In this post, we’ve included everything first-timers need to know to make borrowing as painless as possible.

Singapore Loans Available Today

First-time borrowers who see loan promotions get confused with the huge variety of financial products available. When you see a poster, keep calm and read each item individually. Then, you can use this easy list to learn more about each one’s advantages, disadvantages, and explanations about its technical terms.

Personal Loan - Fortune Credit


Each loan serves a particular purpose. The very first loan on earth that happened between two parties was a personal loan. These financial products have limitations due to their individualistic nature. Virtually all Singaporean financial institutions offer some form of personal loans. Plus, Singaporean money lenders provide personal loans as their primary financial product.

Here is some non-overwhelming technical information about the usual personal loan.

  • Loan amount: Banks can offer personal loans about 6-10 times your monthly salary with a loan amount cap from 5-6 digits. Licensed moneylenders can offer you 6 times your monthly salary with zero caps.
  • Interest rate: Many banks offer interest rates lower than licensed moneylenders at 3.88%. However, poor-credit borrowers are likely to receive higher effective interest rates (EIR) than advertised. All licensed moneylenders have a flat 4% interest rate for personal loans.
  • Repayment period: Financial institutions can offer you a 12-60 month personal loan. Licensed moneylenders only offer you up to a 12-month loan.
  • Charges and fees: Banks have varying processing fees, usually 1% of the total loan amount. Licensed money lenders can charge any amount not exceeding 10% of the principal loan amount.

Foreginer Loan Banner


Singapore’s workers have a high dependency on foreign labor. Unfortunately, the country’s best banks cannot give them full product access because they have limited credit history access.

Foreign workers can fly home even with outstanding debt, making them high-risk borrowers than the poorest-credit Singaporean or permanent residents (PR). Licensed money lenders offer the best alternative, a personal loan for foreign borrowers only.

Income eligibility is the major difference between regular and foreigner personal loans. Here are a few more details to know more about it.

  • Loan amount: Like money lender personal loans, foreigner loans grant you six times your monthly salary
  • Interest rate: At a ceiling rate of 4%
  • Repayment period: Licensed money lender foreigner loans have a 12-month loan tenure.
  • Charges and fees: Any amount that does not exceed 10% of the principal loan.

Payday Loan Img


Some drastic situations can force small company operators to suspend payday schedules. Unfortunately, many Singaporeans and foreign workers have bills to pay, which include ballooning interest rates. Payday loans serve as a buffer period during situations where time is crucial in decreasing costs.

Payday loans have simpler terms and conditions than personal, foreigner, and business loans. Learn more about them below.

  • Loan amount: The income you’re due for the month. Some banks allow you to advance much higher cash if you’re expecting higher monthly expenses during the time.
  • Interest rate: Licensed money lenders can offer you a flat ceiling rate from 1 to 4%. On the other hand, banks can charge you a 28% per annum interest rate, which they daily increment until you’ve paid the loan.
  • Repayment period: Usually 30 days after you’ve received loan application approval
  • Charges and fees: Banks usually charge 8% of the payday principal upon approval. A licensed money lender can charge the same rate or lower but never beyond 10% of the principal.

Business Loan - Fortune Credit


Startup companies often find it challenging to find interested parties to springboard their company’s efforts. However, with a business loan from banks or licensed money lenders, they can jump start their operations by proving their business idea’s viability.

Unfortunately, most lenders only receive business loan applications from companies with more than one year of financial accounting records.

You’ll find other helpful information that’s good to know about business financing from a bank and licensed money lender.

  • Loan amount: Banks can provide 10-40% of your business’ annual revenue. Licensed money lenders can give you up to S$200,000. If you have more than two business owners, you have a slim chance of increasing the bank business loan amount.
  • Interest rate: Banks usually charge about 9-12% per annum on their business loans. Licensed money lenders can charge you 5-15% per annum.
  • Repayment period: For banks, it’s usually 1-5 years they expect business to repay the entire financing. Licensed money lenders can only offer you up to 24 months to pay completely.
  • Charges and fees: Banks, on average, charge 1-3% of the principal for processing fees. Alternatively, licensed money lenders charge zero processing fees for business loans.

First-Time Steps for Easy Borrowing

Fully armed with correct and useful information about all existing financial products in Singapore, you’re ready to go through the entire process. As we’ve mentioned earlier, Singapore’s banks and licensed money lenders have simplified the entire process. However, bank loan application processes vary while licensed money lender loan releases remain consistent.

Just follow these easy steps to get started on borrowing:

1. Call or apply online: All banks and licensed money lenders have their easy-to-access respective loan application portals. Calling and submitting a walk-in application are alternate courses. However, you can do document submissions and possible face-to-face interviews from the comfort of a computer with an internet connection.

2. Prepare documents required: Banks have fewer requirements compared to licensed money lenders. However, they may require you to sign up for a required account before clearing your loan application. Alternatively, licensed money lenders will not ask you to sign up for anything other than your loan application. Below are common eligibility criteria, and required documents banks and licensed moneylenders can ask from you.


The majority of banks and licensed lenders require you to be:

  • At least 18 years old
  • Singaporean/PR residents must have regular employment or a source of income above $1,500 per month
  • Foreigners/Expats working in Singapore must have regular employment or a source of income above $2,000 per month


Prepare all these documents before you inquire with the nearest licensed moneylender:

For Singaporeans/PRs

  • Identity card / NRIC
  • Proof of residences such as a recent bill or letter addressed to you (for tenants)
  • Tenancy agreement (if you are renting)
  • Recent 3 months payslip and employment letter if your current employment is less than 6 months
  • SingPass (to log into CPF, HDB, IRAS website)

For Foreign Workers

  • A valid work permit / S Pass / Employment Pass
  • Passport
  • Proof of employment (staff pass or company pass)
  • Recent 3-month payslips & employment letter
  • Proofs of residence such as a tenancy agreement, recent bill, or letter addressed to you
  • Latest bank statement of account to which yearly or monthly salary is credited
  • Singpass (to download IRAS NOA)

3. Visit the office for in-person consultation: As we’ve mentioned, this is an alternative step. Licensed money lenders welcome walk-ins and take less than an hour to evaluate and approve their loan applications.

4. Sign the agreement: Make sure to read the fine print and ask the lender’s representative helpful questions about your rights and responsibilities as a borrower. Doing so prevents you from getting blindsided.

5. Receive cash: Banks may instantly disburse your loan through their required bank account you’ve also signed up for. Licensed money lenders can give it to you in cash the same day.

A Checklist To Keep You Safe Before Using Commercial Loans

Singapore offers a wide variety of helpful loans for many Singaporeans and foreigners. However, borrowing money is a huge financial commitment that can make or break your budget. Here is a handy checklist to make sure you’re making the right call to use commercial loans.

Alternative Funding Services

A money loan Singapore is convenient. However, you can get financial help if you have the courage to ask your friends, families, and trusted colleagues to help fund your new venture or emergency cash needs. Trust us when we say many people in your lives are willing to help, and they’re waiting for you to ask. While their lending amounts are smaller, having zero interest and a non-fixed loan tenure makes a huge difference.

Lender Legitimacy

Licensed money lenders have become legitimate and receive regulation thanks to the Moneylenders Act of 2008. However, unscrupulous parties stalk unsuspecting borrowers with their huge loan offers. Only use a licensed money lender if you can find their name in the Registry of Moneylender’s existing license roster. You can download the entire list conveniently on your laptop or smartphone.

Research All Loan Options Available

It’s easy to say yes to a loan interest rate and tenure that works for you. However, Singapore has a wide range of bank and licensed money lender financial products and services. You don’t need to single out your choice immediately. Plus, you can do it conveniently by using high-quality loan comparison websites, such as Loan Advisor and Moneylender Review.

Loan Amount, Interest, Charges, and Penalties

A high loan amount will have a higher interest rate and processing fees. Most borrowers will prioritize their loan amount and application success. However, you can get deep into debt if you fail to calculate the ballooning interest and late payment penalties you might incur.

Licensed Money Lender Performance and Dependability

Using a licensed moneylender guarantees you’re working with a non-predatory financial institution. On the other hand, not all licensed money lenders operate similarly. Some have better products and personnel than others. Make it a point to read your prospective money lender’s previous customer reviews to learn more about their operating capabilities.

Guy in Caution Tape

Beware of Loan Sharks and Illegitimate Lenders

Many Singaporeans have fallen for the highly-attractive yet fatal offers by loan sharks. These unscrupulous parties will give you the highest loan amounts with exceptionally low-interest rates. However, these are traps they designed to get borrowers hooked on the convenience and immediate wealth. You’re working with a loan shark if they’re exhibiting the following behaviors.

  • Abusive Language
  • Asks For Your SingPass and ID
  • Withholds Your Delicate Documents Such as Driver’s License and ID
  • Asks You For a Blank Note of Contract With Your Signature
  • Grants You Loans Without a Contract Copy
  • Grants You A Loan Even If You Haven’t Fulfilled All Documents
  • Withhold a Portion of Your Total Loan Amount

How to Report Illegitimate Lenders

You can spot illicit money lenders from a mile away. Always consult The Registry of Moneylender’s list of dependable licensed money lenders before signing up for any lender’s offers.

If you believe you’ve worked with a loan shark and have experienced any behavior we’ve listed above, You can call the police at 999 or the X-Ah Long hotline at 1800-924-5664 (1800-X-AH-LONG) to report the loan shark. Alternatively, you can report the loan shark on the Singapore Police Force i-Witness reporting page.

What To Do After You Receive Your Loan

Most borrowers will take out the bottle and pop the champagne after their lender sends a text message or calls to mention their loan application’s success. However, you’ll want to do a few more things after you receive your loan, such as the following.

  • Correct Loan Amount
  • Pay Loan Installments On Time
  • Receipt Issuance
  • Regular Statement of Accounts

Good To Know For First-Time Borrowers

Here are a few things to always remember:

  • Some Loans Have Early Repayment Fees

You won’t have this problem with licensed money lenders because they will never charge you early repayment fees (and they want you to pay early). However, banks profit from projected interest rates. If you pay early, they’ll charge you using their projected interest as a baseline plus administrative and processing fees.

  • Consequences of Loan Payment Failure

Credit scores and ratings are highly valuable after you’ve successfully paid for your loan. If you fail to pay or your lender filed bankruptcy for you due to missed payments, it will be challenging to find high-quality loans in the future. Plus, you’ll involve debt consolidators to negotiate and help you pay off your debt.

  • Is It Better To Find a Local Lender?

Finding a nearby borrower is a better option than using one that is a few MRT stations away. You can quickly submit your documents and claim your money faster if you work with a local lender.

  • Borrowing With Low Credit Scores

Banks can quickly reject a low-credit borrower’s application. If they’re lucky, poor-credit borrowers can get an unsecured loan with an outrageous interest rate. Fortunately, licensed money lenders only use income and job stability as the basis for loan applications. Plus, borrowers can recover their ailing credit scores conveniently using their services.

  • When to Use Guarantors

Banks allow poor-credit borrowers to use guarantors. These individuals or parties will stand in if the borrower fails to pay the loan for any reason. However, being a guarantor is a huge undertaking because they’ll take responsibility for all the late charges, penalties, and interest rates. However, guarantors can significantly lower a borrower’s risk value and interest rates.

The Best and Seamless Loan Options Are Always Available Nearby

In Singapore, you can easily find the perfect financial product for all your needs. Plus, licensed money lender make personal loan and other financings as convenient as possible.

If you’re looking for the best loans in the market, you can always count on us at Fortune Credit. With decades of experience supplying the best borrowing experience for Singaporeans and foreigners, we guarantee only the smoothest transactions. Visit our website today and apply for a loan!