Deciding to get a loan requires proper research. Make the wrong choice and you might find yourself in a difficult financial situation. That said, you need to take a few things into consideration.

Thankfully, the Singaporean government enacted the Moneylenders Act. This act ensures that borrowers will have safe access to financing. Additionally, it also strengthens the regulation of licensed moneylenders.

Singapore Moneylender’s Act: An overview

The Singaporean government continues to make amendments to the Moneylender’s Act (MLA) to provide better protection for both moneylenders and borrowers. The primary objective is to prohibit unlicensed and unprincipled moneylenders from preying on unsuspecting people. In doing so, it lowers the risk of financial ruin.

On May 29, 2015, the final recommendations were enacted.

But how exactly will MLA protect you, the borrower?

Set Loan Cap Limits

MLA sets loan limits to ensure borrowers can pay their financial obligations. Moneylenders, on the other hand, will receive the payment that is due to them.

Loan caps limit the amount a person may borrow from all licensed moneylenders combined.

Take this as an example: A borrower, who’s a Singaporean Citizen, has an annual income of less than $20,000. They can only borrower up to $3,000 from all moneylenders combined.

Here’s a loan caps table from the Ministry of Law in Singapore:

Borrower’s Annual Income Singapore Citizens and Permanent Residents Foreigners living in Singapore
Less than $10,000 $3,000  $1,500
At least $10,000 and less than $20,000 $3,000

Proper Borrower Evaluation

The Money Lenders Act also emphasized the importance of credit reports and scores for moneylenders. Before approving any application, moneylenders must first evaluate a borrower’s credit report.

This allows lenders to evaluate whether the borrower can pay their financial obligations. Although credit reports are not a crucial deal-breaker, they can still use it as a reference.

A new framework has been introduced for the Moneylenders Credit Bureau (MLCB). This helps boost the confidentiality, security, and reliability of the borrower’s credit data.

Self-Exclusion Framework

The Act also enforced a self-exclusion listing and framework. This prevents an individual from excessive debt by preventing them from taking out additional third-party loans. This helps borrowers curb their borrowing behavior. And helps them get out of debt and be more financially disciplined.

How Do I Know If A Moneylender Is Licensed Or Not?

The Moneylenders Act states that every moneylending service needs to acquire a license. That said, this is the number one criteria that borrowers should consider.

Thankfully, the MLA is there to help regulate the moneylending business. And as a result, helps protect borrowers from potential problems. However, you must also perform due diligence.

Before applying for a loan, verify first whether they are licensed. Here are a few things you need to consider:

  1. Licensed moneylenders should be listed on the ministry of law website

First of all, you need to check the lender’s credibility. Check whether the lender is listed on the list of licensed moneylenders in Singapore. You can find it on the Singapore Ministry of Law website.

Registered Moneylenders are qualified and recognized by the law. This means they have complied with the Moneylenders rules and regulations.

If they’re not, that should be a red flag. There’s a high chance that they’re a loan shark. However, there are times when new lenders are not yet listed upon checking. So to make sure, you can contact the Singapore Ministry of Law at 1800 2255 529.

  1. Licensed moneylenders will explain the terms and conditions of your loan contract

Licensed money lenders will present their terms and conditions in a language that you can easily understand. This means they are open to answering any questions about the loan. They should also explain the interest rate, loan tenure, payment method options, and repayment period.

It’s the moneylender’s responsibility to help you fully understand the contract. Legitimate lenders will provide clear and substantial information.

If the contract looks vague, then you might fall for a loan shark scheme. So always ask questions first. If the lender insists on handing you a contract without further explanation, it’s time to rethink your decision.

  1. Licensed Moneylenders Will Provide you a Loan Contract

Singapore law requires moneylenders to provide borrowers with a copy of the loan contract. The contract must be written by a lawyer. It must include these details:

  • Interest rate charged
  • Loan tenure
  • Late payment fees and other charges
  • Loan repayment schedule
  • and more

Here are a few red flags to watch out for:

  • The lending agency approves your loan without a contract
  • If they ask you to sign a blank, incomplete, or vague contract.

You must never deal with lending agencies that behave like this. You might be dealing with a loan shark.

  1. Licensed moneylenders do not charge above-market interest rates

All licensed lending agencies are required to follow Singapore guidelines on interest rates. In Singapore law, the maximum interest rate allowed is up to 4% per month. A reputable and licensed moneylender will not charge higher than that.

But unlicensed lenders will approve any amount you want to borrow. And they will charge far more than 4% interest rates.

  1. Licensed moneylenders will always have a physical office

A professional moneylender will have an office. Your initial meeting and signing of the contract must be done in their place of business.

But just because they have a physical address doesn’t automatically make them a legit choice. That said, always confirm using the list of licensed moneylenders on the Ministry of Law website. Check whether the address they provided is associated with the moneylending agency.  

What Are The Eligibilities And Requirements To Borrow Money From Licensed Moneylenders?


  • The individual must be 18 years old
  • Have a minimum salary of $1,500 for local and permanent resident
  • Have a minimum salary of $2,000 for foreigners

Document Requirements for Local and Permanent Residents

  • Identity card
  • Proof of residence like a utility bill or tenancy agreement
  • Proof of employment – if your job is less than 3 months, you’ll need an employment letter
  • Recent 3 months payslip
  • SingPass to log into CPF, HDB, and IRAS website

Document Requirements for Foreigners

  • Passport
  • Work Permit or S-Pass or Employment Pass
  • Proof of residence like a utility bill or tenancy agreement
  • Proof of employment – if your job is less than 3 months, you’ll need an employment letter
  • Recent 3 months payslip
  • Proof of income like a bank or account statement
  • SingPass to log into CPF, HDB, and IRAS website

How Much Can I Borrow From A Licensed Moneylender?

You can borrow up to six months’ worth of your income. But of course, the moneylender will have to assess your current financial situation.

To further understand how much financing you can avail, please refer to the table below:

Borrower’s Annual Income Singapore Citizens and Permanent Residents Foreigners living in Singapore
Less than $10,000 $3,000 $500
At least $10,000 and less than $20,000 $3,000
At least $20,000 6x their monthly income 6x their monthly income

What Are Interest Rates And Other Fees A Moneylender Can Charge?

A credible moneylending business charges a maximum of 4% interest rate per month. This applies to different types of loans – either secured or unsecured. Additionally, the interest rate to be charged must be based on the remaining principal amount.

Effective on October 1, 2015, licensed lending agencies are only allowed to charge for the following fees:

  • Late repayment fee of not more than $60 per month
  • An administrative fee not exceeding 10% of the principal loan granted
  • To recover the loan amount, the moneylender can only claim the legal costs ordered by the court

Note: The total charges on any loan must not be more than the total principal loan amount.

What Can I Do If A Moneylender Is Harassing Me?

Threats and harassment to collect debts are considered unreasonable moneylending practices. It is subject to regulation by the Registry of Moneylenders.

That said, you must contact the Registry at 1800-2255-529 and file a complaint. You can also file your complaint online. Make sure to provide crucial information including the business name, license details, and contact numbers.

Here are other red flags to watch out for. File a complaint if the moneylender does any of the following:

  • Unfair moneylending practices
  • Providing false information
  • Debt collection practice does not comply with the law
  • Unfair lending contracts
  • Short term-loans of a period less than a month
  • Breach of terms and conditions of the contract.

What To Do If You Cannot Pay The Loan Provider?

Social services, such as Credit Counselling Singapore, can help consumers recover from debt problems by providing general credit management information, credit counselling, and assistance in negotiating a repayment plan with lenders. Note that Credit Counselling Singapore only handles cases that involve debts with banks. Refer to MinLaw FAQs to see the full list of available agencies.

Final thoughts

In case you find yourself in a tight financial situation, you have plenty of options. You can turn to banks to apply for loans. Or you can look for a licensed moneylender for faster transactions.

The key is knowing your rights and what to look for in a moneylending agency. Use these moneylending FAQs as a guide to finding reliable licensed moneylenders. Among the best trustworthy lenders in Singapore is Fortune Credit that offers different types of loans depending on your financial needs.

Lastly, do your due diligence and check out their credibility. Confirm their registration on the Ministry of Law website. And evaluate whether they’re abiding by prescribed laws and regulations. In doing so, you can be assured of your financial safety.