Things You Should Know About Licensed Moneylenders In Singapore

Guest Contributor

Guest Contributor

Last updated 29 October, 2021

Consider your options before applying for a loan. Licensed moneylenders can help tide you through cash flow issues for emergency or big-ticket items such as medical bills or car repairs. Here’s what you need to know before applying for a loan.


There may come a point in time, probably when unforeseen circumstances arise, where you find yourself stuck in a financial rut. In times of need, there are many platforms you can turn to for quick financial relief

However, if you are looking for a solution that is fast, affordable and legal, a licensed moneylender might be a good option for you. In this article, we will share a few important things you should know before you apply for a loan from licensed moneylenders in Singapore.

How to identify a licensed moneylender in Singapore

The first thing you should do before applying for a loan is make a list of moneylenders you wish to borrow from, then take time to find out if they are legal. You are strongly advised to visit the moneylender’s website and verify here

There have been increasing cases of scammers posing as licensed moneylenders to solicit victims’ personal information for unlawful purposes. A licensed moneylender with a money lending license in Singapore is not allowed to solicit for loans via text messages, calls, or social media. They are required to adhere to the guidelines under the Ministry of Law.

Prohibited practices for a licensed moneylender

Here are some practices a licensed moneylender in Singapore is prohibited to carry out. 

  • Fishing for your SingPass ID or password
  • Failing to return your important personal identification documents such as NRIC and passport
  • Asking you to sign a blank or incomplete contract for the loan
  • Approving your loan without explaining the terms in detail
  • Failing to provide you with a copy of your loan contract
  • Soliciting for loans via text messages and phone calls

If you spot any of these red flags from your shortlisted list of moneylenders, you should avoid dealing with them.

Fees that a licensed moneylender can charge

Under the Moneylenders Act, the maximum interest rate that a licensed moneylender in Singapore can charge is 4% per month based on the borrowed amount or late interest from a late payment.

The interest rate should be computed based on the monthly outstanding balance of the principal remaining after deducting the payments made. For instance, if your loan amount is S$10,000 and you have already paid S$5,000, then the 4% interest rate should only be computed for the remaining S$5,000.

A licensed moneylender may also impose other fees such as loan approval fees or legal costs incurred by the moneylender to recover their loans in the event that the borrower fails to make payment.

What Happens after the Loan Has Been Approved?

After a loan has been approved, the moneylender has to deliver to you the correct principal amount of the loan. The moneylender is permitted to deduct upfront a loan approval fee of only up to 10% of the principal amount.

Once you receive the proceeds of the loan, the obligation to repay the loan now arises, based on the terms agreed upon.

As the borrower, make sure you are also aware of the following things from the time you receive the money obtained through the loan and even during or after payment:

  • Obtain a copy of the loan agreement;
  • Make sure the moneylender issues a receipt every time payment is made;
  • Make sure a statement of account stating the moneylender’s particulars is issued at least once every January and July for all the outstanding loans, including a list of payments made and the remaining balance of the account/s; and
  • Retain, for safekeeping and documentation, all copies of statements of account/s and receipts of payment.

For more information on The Moneylenders Credit Bureau and to retrieve your Loan Information Report, you may visit 

Read these next:
Your Go-To Personal Loans Guide in Singapore
What’s The Difference Between Loan Sharks And Licensed Moneylenders?
Best Personal Loans To Ease Your Cash Flow In Singapore (2021)
How to Get a Personal Loan In Singapore With a Bad Credit Score
What Can A Debt Collector In Singapore Actually Do?


Credit Bureau (Singapore) Pte Ltd (CBS) is Singapore’s most comprehensive consumer credit bureau that has full-industry uploads from all retail banks and major financial institutions. CBS assists members in their credit approval process and protects their credit profile, by providing objective and factual information collated from members.



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