Understanding licensed money lenders in Singapore is crucial as living costs rise, offering an alternative for those facing unexpected financial challenges.

In this guide, you’ll learn about their operations, eligibility requirements, loan application processes, interest rates, and how to identify licensed lenders. 

This essential guide provides insights for anyone considering borrowing from a licensed money lender, helping you make informed decisions and access reliable financial help when needed.

Who are Singapore’s Licensed Money Lenders

Licensed money lenders in Singapore are entities authorized to offer loans to individuals and businesses under the strict regulation of the Moneylenders Act 2008

These lenders must operate within the legal framework set by the government to ensure fair and transparent lending practices. They provide an alternative source of credit, especially for those who may not qualify for traditional bank loans.

Common Misconceptions About Licensed Moneylenders

Myth 1: Licensed Money Lenders Are the Same as Loan Sharks

A common misconception is that licensed money lenders operate like loan sharks. In reality, licensed money lenders in Singapore are regulated by the Ministry of Law and must adhere to strict rules, including interest rate caps and transparent fee structures. Loan sharks, on the other hand, operate illegally, often charging exorbitant rates and using aggressive tactics.

Myth 2: Borrowing from Licensed Money Lenders Is Risky

Some believe that borrowing from licensed money lenders is inherently risky. However, licensed money lenders are required to follow legal guidelines that protect borrowers, such as providing clear loan terms and capping fees. This regulation ensures a safer borrowing experience compared to unlicensed lenders.

Myth 3: Only Desperate Individuals Use Licensed Money Lenders

There is a stigma that only desperate or financially irresponsible individuals resort to licensed money lenders. In reality, many people use these services for various reasons, including short-term cash flow issues or emergencies. 

Licensed money lenders provide a legitimate financial service that can be a practical solution for those who do not meet traditional bank loan criteria.

Interest Rates and Fees

Interest Rate Caps

The maximum interest rate they can charge is 4% per month, regardless of whether the loan is secured or unsecured and irrespective of the borrower’s income. Additionally, if a borrower fails to repay the loan on time, the maximum late interest rate that can be imposed is also capped at 4% per month for each month the repayment is delayed.

Permitted Charges and Expenses

Money lenders are limited in the types of fees they can charge. These include:

  • Late Repayment Fee: A fee not exceeding $60 for each month of late repayment.
  • Administrative Fee: A fee not exceeding 10% of the principal loan amount when the loan is granted.
  • Legal Costs: Legal costs ordered by the court for a successful claim by the money lender for the recovery of the loan.

Comparison with Unlicensed Lenders and Banks

Criteria Legal Money Lenders Unlicensed Lenders Traditional Banks
Interest Rates Up to 4% per month Often exceeds legal limits, very high Typically 3-6% per annum
Late Fees Up to $60 per month High, often undisclosed Varies, disclosed upfront
Administrative Fees Up to 10% of principal loan amount High, often undisclosed Between 1% to 3% of the loan amount; capped at S$200
Regulation and Transparency Regulated by Ministry of Law; Transparent fees Unregulated; Lack of transparency Highly regulated; Transparent fees
Eligibility Criteria Less stringent with less paperwork Less stringent More stringent with more paperwork
Processing Time 30 minutes approval and same-day disbursement Varies, can be quick but risky Longer, several days to weeks

Compared to unlicensed lenders, who often charge exorbitant interest rates and hidden fees, licensed money lenders offer a more transparent and regulated alternative. Unlicensed lenders may impose interest rates that far exceed the legal caps, leading to significant financial distress for borrowers. 

On the other hand, traditional banks typically offer lower interest rates than licensed money lenders but may have more stringent eligibility criteria and longer processing times.

How to Identify Licensed vs. Unlicensed Lenders

To spot illegal money lenders, watch for these red flags:

  • Unsolicited Offers: Licensed money lenders in Singapore can only advertise through:
    • Print or online business directories
    • Their own website
    • Posters and ads at their premises Receiving offers via email, flyers, SMS, or other unauthorized methods is a sign of an illegal lender. Always seek out lenders through official channels and verify their legitimacy.
  • Incomplete Loan Offers: Licensed lenders must provide full loan terms, including the final cost and interest rates, in a legal contract. Beware of incomplete or blank contracts, as they can be manipulated to include hidden fees or higher charges. Ensure you fully understand and agree with the contract before signing.
  • Lack of Physical Address or Contact Details: Legitimate loan companies have offices and official contact information, including email and phone numbers. If a lender lacks these, it’s likely illegal. Without proper contact details, it’s difficult to address complaints or contact the lender.
  • Up-Front Fees and High Processing Fees: Licensed lenders charge loan fees only upon granting the loan, and these should not exceed 10% of the principal amount. Be wary of lenders demanding upfront or high processing fees, or payments via gift cards, as these are signs of scams.Secure Website
  • Unsecured Loan Application Websites: Ensure the loan application process is conducted over a secure website (look for the padlock icon in the URL bar). Avoid sharing personal information through unsecured channels or private emails. Official communication should come through formal company lines.

Additional Red Flags:

  • Abusive language or threatening behavior
  • Requests for Singpass ID and/or password
  • Withholding personal ID documents
  • Incomplete or blank loan contracts
  • Refusal to provide a copy of the loan contract
  • Failure to explain loan terms
  • Granting loans without due diligence
  • Withholding part of the principal loan without reason

Rights and Protections for Borrowers

Legal Protections for Borrowers

Borrowers dealing with licensed money lenders in Singapore are safeguarded by stringent regulations under the Moneylenders Act and the Registry of Moneylenders. These protections ensure fair lending practices and include:

  • Interest Rate Caps: The maximum interest rate is capped at 4% per month.
  • Fee Limitations: Fees for late repayment are capped at $60 per month, and administrative fees are capped at 10% of the principal loan amount.
  • Transparent Practices: Licensed money lenders must clearly disclose all terms and fees before the loan agreement is signed.

Note: Before dealing with any money lender, make sure to check their credibility and verify their license through the Registry of Moneylenders. You can find the complete list of licensed moneylenders in Singapore here.

How to Report Unlawful Money Lenders

If you think that a moneylender in Singapore is working without a license, you must contact the Ministry of Law immediately. They will conduct their investigation and will do the necessary action on your complaint.

To lodge a complaint:

  • Report the errant money lender or loan shark to the Registry of Moneylenders.
  • Provide complete information about the lender, including business name, license, and contact number.
  • You can also report it to the Registry at 1800-2255-529 or via their website.

What if a money lender in Singapore is threatening or harassing you?

First, do not give in to their demands. Instead, immediately contact the police or the X-Ah Long hotline at 1800-924-5664. If you don’t want to call the police out of fear, you can also file a complaint through the Singapore Force i-Witness reporting page.

Remember, no lending company can ever force you to avail of their product. You should never feel the need to avail of the services of any money lending company or corporation.

Applying for a Loan with Licensed Moneylenders

Eligibility Criteria for Borrowers

To qualify for a loan from licensed money lenders in Singapore, applicants must meet specific criteria:

    • Age Requirement: Applicants must be at least 21 years old.
  • Income Requirements:
    • For Singapore Citizens and Permanent Residents, the minimum monthly income is SGD 2,000.
    • For foreigners residing in Singapore, the minimum monthly income is SGD 3,000.

Documentation Needed for the Loan Application Process

For Singapore Citizens and Permanent Residents:

  • A valid NRIC
  • Proof of residence, such as a recent utility bill, a letter addressed to you, or a tenancy agreement.
  • Proof of employment
  • Recent payslips for the last three months
  • SingPass to log into relevant government portals

For Foreigners:

  • A valid passport.
  • Work Permit / S-Pass / Employment Pass
  • Proof of residence, such as a recent utility bill or tenancy agreement
  • Proof of employment
  • Recent payslips for the last three months
  • Proof of income, such as bank or account statements showing income
  • SingPass to log into relevant government portals

Loan Application Process

Step 1: Initial Contact and Online Application

Borrowers can start the loan application process by either calling or applying online through the licensed money lender’s official website. This allows potential borrowers to initiate their application from the comfort of their homes, providing convenience and ease of access.

Step 2: In-Person Verification and Consultation

After the initial application, borrowers are required to visit the lender’s office for an in-person consultation. During this visit, one of the loan officers will discuss the terms and conditions of the loan plan in detail. 

This step is crucial for verifying the borrower’s identity and documents, ensuring compliance with legal requirements, and providing a personal touch to the loan process.

Loan Application Approved

Step 3: Loan Approval and Disbursement

Once the terms are agreed upon and the necessary paperwork is completed, borrowers can receive their cash loan on the same day. The typical time frame from application to disbursement being as short as 30 minutes, depending on the lender’s efficiency and the completeness of the borrower’s documentation.


1. Is A Licensed Money Lender Safe In Singapore?

Yes, borrowing from a licensed money lender in Singapore is safe. Licensed money lenders operate under strict regulations set by the Ministry of Law, ensuring fair practices, transparent fees, and capped interest rates. These measures protect borrowers from exploitative practices commonly associated with unlicensed lenders.

2. How Much Can You Borrow From A Licensed Money Lender In Singapore?

You can borrow any amount if you’re applying for secured loans. This is because this type of loan requires some type of asset as collateral for the loan. The collateral can be anything of value, such as your car or your home.

For unsecured personal loans, please refer to the table below for the maximum loan amount:

Borrower’s annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than $10,000 $3,000 $500
At least $10,000 and less than $20,000 $3,000
At least $20,000 6 times monthly income 6 times monthly income

3. How Do I Check If A Lender Is Licensed In Singapore?

To verify if a money lender is licensed, you can refer to the Registry of Moneylenders’ official list, available on the Ministry of Law’s website.

4. Is It Legal To Lend Money In Singapore?

Yes, it is legal to lend money in Singapore, provided the lender is licensed by the Ministry of Law. Licensed money lenders must comply with the Moneylenders Act and other regulatory requirements, ensuring they operate within the law and provide fair services to borrowers.

5. Can You Apply For A Loan Even With A Bad Credit Score?

Unfortunately, some individuals turn to loan sharks because they can’t get a loan from banks or other financial institutions. However, dealing with unlicensed money lenders is extremely dangerous. In fact, it can lead to more serious financial difficulties.

That said, consider taking a loan from a licensed money lender. Some licensed money lenders in Singapore have their own system to determine your creditworthiness.

Rest assured that a legal money lender will not charge extremely high interest rates and fees.


Understanding the role and operations of licensed money lenders in Singapore is essential for those seeking financial assistance. These lenders provide a regulated and transparent alternative to unlicensed lenders, offering safety and fairness. By learning about their practices, borrowers can make informed decisions and access reliable financial help when needed.

Key takeaways:

  • The Ministry of Law (MinLaw), has strict guidelines when it comes to money lending.
  • All licensed money lenders must abide by the strict rules and protocols set by the Ministry of Law. You can find a complete list of licensed money lenders on the MinLaw website.
  • According to the Moneylenders Act, all lenders should provide the complete terms of a loan.
  • Licensed money lenders can only charge up to a 4% interest rate and up to a 10% approval fee.

To avoid problems, only take a loan from a licensed and reputable money lender, such as Fortune Credit. Request a customized quote today!