Guide to The Moneylenders Act in Singapore 2025

If you’ve ever thought about borrowing money from a licensed moneylender, it’s important to know your rights and responsibilities. That’s where the Moneylenders Act comes in. This law lays down the rules that licensed moneylenders must follow, and it also protects borrowers like you from unfair practices.

Whether you're taking out a personal loan to cover medical bills, car repairs, or simply making ends meet, understanding how this Act works can help you avoid unnecessary costs and stay away from illegal loan sharks.

Not just anyone can legally lend money in Singapore. According to the Moneylenders Act, only specific entities are permitted to do so, and they fall into three distinct categories:

• Licensed moneylenders: These are individuals or businesses that have obtained an official licence from the Registrar of Moneylenders under the Moneylenders Act. They must comply with strict rules on interest rates, fees, and borrower protection.

• Exempt moneylenders: These are entities that have been specifically exempted from holding a moneylender’s licence. This exemption is rare and typically granted to certain government-linked or institutional lenders under special circumstances.

• Excluded moneylenders: These are organisations that are allowed to lend money under other laws, such as:

• Pawnbrokers, who are regulated under the Pawnbrokers Act

• Credit co-operatives, governed by the Co‑operative Societies Act

• Banks and financial institutions, licensed by the Monetary Authority of Singapore (MAS)

If someone is offering to lend you money and doesn’t fall into one of these three categories, they’re doing so illegally, and you should steer clear. Always double-check the lender's status before signing anything.

The Moneylenders Act isn’t just about regulating loan providers—it’s about protecting you, the borrower. Here are some of the key ways the Act helps you borrow safely and responsibly.

You're allowed to borrow from legal loan providers

Not everyone qualifies for a traditional bank loan, especially if you have a low credit score or irregular income. That’s where licensed moneylenders come in. They offer an alternative legal option for borrowing money, without you having to resort to illegal loan sharks who often use threats or harassment to get their money back.

You're able to check if a moneylender is licensed

Thanks to the Moneylenders Act, there’s an official list of licensed moneylenders maintained by the Ministry of Law. This list exists to help you verify if a moneylender is legally approved. Always cross-check the lender’s name and business registration number before signing any loan agreement.

MORE: Licensed moneylenders vs banks: Which is better for getting a personal loan in Singapore?

You're protected from taking on too much debt

Under the Moneylenders Act, there are strict borrowing limits based on your annual income and residency status. This helps ensure you don’t take on more debt than you can reasonably afford to repay.

For Singapore Citizens and Permanent Residents:

• If you earn less than $20,000 a year, you can borrow up to $3,000 across all licensed moneylenders.

• If you earn $20,000 or more, you can borrow up to 6 times your monthly income.

For foreigners residing in Singapore:

• If you earn less than $10,000 a year, you can borrow up to $500.

• If you earn between $10,000 and $20,000, you can borrow up to $3,000.

• If you earn $20,000 or more, you can borrow up to 6 times your monthly income.

These limits apply regardless of how many lenders you borrow from—they are calculated on your total outstanding unsecured loan amount with all licensed moneylenders combined.

This helps prevent debt from spiralling out of control, especially for lower-income borrowers and vulnerable individuals, including foreign workers.

There's a limit to the interest and fees moneylenders can charge you

To prevent borrowers from being overcharged, the Moneylenders Act caps interest rates and fees.

Maximum Interest Rate (Section 36):

• The maximum interest a licensed moneylender can charge is 4% per month, regardless of whether the loan is secured or unsecured.

• If you’re late on a repayment, the late interest is also capped at 4% per month—but only on the overdue amount.

Permitted Fees (Section 35):

• Administrative fee: Up to 10% of the principal loan (deducted upfront when the loan is disbursed).

• Late fee: Up to $60 per month.

• Legal costs: Only what is ordered by the court.

Overall cost cap: The total charges (interest + fees) can’t exceed the amount you originally borrowed. So if you take out a $5,000 loan, your total repayment (including interest and fees) can’t be more than $10,000.

To protect consumers from harassment and scams, the Act strictly limits how money lenders can advertise. They’re only allowed to promote their services through:

• Their official websites

• Approved directories (like Yellow Pages)

• Signage within their business premises

They are not allowed to send you loan offers via SMS, WhatsApp, social media, or flyers. So if you get a message or call out of the blue offering you a loan, it’s very likely from an unlicensed (and illegal) lender.

Under Sections 32 and 33 of the Moneylenders Act, licensed moneylenders must make everything crystal clear before you take on a loan.

• They must explain all the loan terms, including repayment, interest, and fees, in a language you understand.

• You must be given a written contract (called a Note of Contract) before the loan is issued.

• This contract should clearly show:

• The loan amount

• Your repayment schedule

• The interest rate

• All applicable fees and charges

If a moneylender is vague, uses pressure tactics, or won’t give you the details in writing, that’s a red flag.

Section 34 of the Act ensures you get proper paperwork and proof for every part of your loan journey:

• You must receive a copy of the signed contract — keep it for your records.

• Every time you make a repayment, the moneylender must give you a receipt.

• You’re also entitled to a statement of account twice a year — in January and July — as long as your loan is active.

This helps you keep track of your payments and make sure there are no hidden charges.

The Moneylenders Act includes strict rules to protect borrowers from unethical behaviour. Here’s what licensed moneylenders are not allowed to do:

• Use threats or abusive language (Section 47): Harassing you or your family, whether by phone, in person, or online, is a criminal offence.

• Withhold your personal documents: They cannot keep your NRIC, passport, driver’s licence, or any other ID as “collateral.”

• Ask for your Singpass or Corppass login details: This is illegal. Never share your password with anyone.

• Grant unsolicited loans (Section 30): A licensed moneylender cannot give you a loan unless you first apply for it in writing. If someone suddenly transfers money into your account and demands repayment, that’s a major red flag.

These protections are in place to ensure you’re treated fairly and to keep shady, illegal practices out of the system.

If you encounter any suspicious or unethical behaviour from a moneylender, you should report it immediately. Call the Ministry of Law at 1800 2255 529, or submit a report through their official feedback form.

The Moneylenders Act is there to protect everyday Singaporeans from falling into debt traps. It ensures that if you need to borrow money, you can do so safely, legally, and with full transparency. Before taking a loan, always verify the lender, understand your repayment obligations, and know your rights. A little homework now can save you a lot of stress later.