What Licensed Moneylenders Cannot Do and How You Can Protect Yourself
Updated: 11 Aug 2026
Written bySingSaver Team
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| Loan | Base Interest Rate | Min. Annual Income | Interest Rate |
|---|---|---|---|
| EZ Loan | - | S$40,000 | - |
| Cash Direct | - | S$40,000 | - |
| MM Credit Pte Ltd | - | S$40,000 | - |
Disclaimer: The information on this page is for general educational and informational purposes only and should not be considered financial or investment advice.
The information on this page is for educational and informational purposes only and should not be considered financial or investment advice. While we review and compare financial products to help you find the best options, we do not provide personalised recommendations or investment advisory services. Always do your own research or consult a licensed financial professional before making any financial decisions.
Borrowing from a licensed moneylender in Singapore can be a practical option when you need quick access to funds, but it is crucial to understand your rights and the limits imposed on lenders. With regulations in place under the Moneylenders Act and oversight by the Ministry of Law, borrowers are protected from unfair practices — but only if they know what to look out for. Here's a guide to help you recognise what a licensed moneylender cannot do in Singapore, and how to safeguard yourself if moneylender harassment or loan shark harassment arises.
Is your moneylender licensed?
The first step is always to check if your moneylender is licensed. You can verify this on the Ministry of Law's official List of Licensed Moneylenders.
Watch out for red flags: unsolicited SMS, WhatsApp messages or flyers; requests for your Singpass login; retention of your NRIC or ATM card; blank or incomplete contracts; and offers of "instant approval" without asking for documents. These are tell-tale signs of illegal lenders.
Know the legal caps, too. Interest rates cannot exceed 4% per month, late interest is capped at 4% per month on the overdue amount only, late fees cannot exceed S$60 per month, and administrative fees are capped at 10% of the principal. Importantly, total charges (interest, fees and penalties) cannot exceed the loan principal.
You should also always receive receipts for each repayment, as well as loan statements issued at least twice a year in January and July.
Looking for some quick cash?
Check out reputable licensed moneylenders in Singapore.
Moneylender's Act
The Moneylenders Act is the primary legislation governing licensed moneylenders in Singapore. It sets out strict limits on what lenders can charge, how they must conduct business, and the protections that borrowers are entitled to.
Key protections for borrowers include:
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Monthly interest rates capped at 4%
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Late interest capped at 4% per month on the overdue amount only
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Late fees capped at S$60 per month
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Administrative fees capped at 10% of the principal
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Total charges (interest, fees, penalties) cannot exceed the loan principal
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Mandatory issuance of receipts for every repayment
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Bi-annual loan statements in January and July
Moneylender behaviour regulated under the Act:
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All lenders must be registered with the Ministry of Law and listed on the official Registry
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Contracts must be explained clearly in a language you understand, with a copy provided to you
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Only three advertising channels are permitted:
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Business/consumer directories
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The licensed moneylender’s official website
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Signage at their premises
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Retention of NRIC, ATM cards, or Singpass credentials is prohibited
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Harassment, intimidation, or criminal conduct in debt recovery is strictly forbidden
By laying down these rules, the Moneylenders Act protects borrowers from predatory practices while maintaining an accessible avenue for legal short-term credit. Always ensure your lender is licensed and operating under the Act to safeguard your financial well-being.
What licensed moneylenders can do
Assess and grant loans within legal limits
Unsecured borrowing limits depend on your annual income and residency status. For example, Singapore Citizens and Permanent Residents earning at least S$20,000 a year can borrow up to six times their monthly income. There is no statutory cap for secured loans. Moneylenders must explain the contract in a language you understand and give you a copy to keep.
Charge only permitted interest and fees
Licensed lenders can charge up to 4% interest per month, late interest of up to 4% per month on overdue amounts, an administrative fee of up to 10% of the principal, and late fees of up to S$60 per month. They can also recover legal costs if ordered by the court. However, the total charges across the loan cannot exceed the principal borrowed.
Disburse principal properly and document payments
Moneylenders may deduct up to 10% in administrative fees from the principal upfront. Otherwise, the loan must be disbursed in full. They are required to issue receipts for all payments and provide statements twice a year.
Reasonable debt recovery
Moneylenders may contact you to request repayment and can take civil action to enforce the contract. Visits to your home or workplace are not automatically unlawful, but they become harassment if accompanied by threats, vandalism or violence.
Offer self-exclusion support
Borrowers may apply for self-exclusion via the Moneylenders Credit Bureau. Once active, licensed moneylenders cannot extend unsecured loans (except debt consolidation). Typical exclusion periods range from one to two years, with foreigners subject to a default period of two years.
What licensed moneylenders cannot do
Prohibited advertising
Licensed moneylenders are allowed to advertise only in business and consumer directories, on their own websites, and through signage at their premises. Any other advertising — such as SMS, social media, or unsolicited flyers — is illegal.
Unfair or unsafe onboarding practices
They cannot ask for your Singpass login details, retain your NRIC, ATM card or employment pass, or get you to sign incomplete or blank contracts. Approving loans without proper checks or withholding the principal beyond the permitted admin fee is also unlawful.
Harassment, threats, and crimes
Moneylenders are not allowed to engage in violence, threats, stalking, vandalism, or other criminal behaviour. If this happens, call the Police at 999 or use the Emergency SMS 70999 service.
Over-charging
Any fees or interest that go beyond legal caps, or interest calculated wrongly (such as not based on the remaining principal), are prohibited.
Under the Protection from Harassment Act (POHA), you can also apply for legal remedies if you are subjected to harassment.
Legit collection vs harassment
Legitimate actions include making phone calls, sending SMS messages, sending letters requesting payment, filing a claim in court, and making peaceful visits.
Harassment or illegal behaviour includes repeated calls at odd hours, threats of harm, doxxing, vandalism, property damage, online shaming posts, or intimidating groups showing up at your home. Such behaviour can be challenged under POHA.
Experiencing harassment? Here is a 7-step response plan
- Prioritise safety: If you are in immediate danger, call 999 or use 70999 for SMS emergencies.
- Preserve evidence: Take screenshots, save call logs and voicemails, and photograph vandalism or injuries.
- Log everything: Record dates, times, details of incidents, and witness accounts.
- Report to Police: For criminal conduct, lodge a report and get a police report number.
- Inform the Registry of Moneylenders (ROM): Submit a complaint via the portal or call 1800-2255-529.
- Apply for Protection Orders under POHA: Seek an Expedited Protection Order (EPO) for urgent cases or a Protection Order (PO) for ongoing relief.
- Consider civil and debt solutions: File a claim under the Consumer Protection (Fair Trading) Act, renegotiate payments, or seek help from social service agencies such as Credit Counselling Singapore.
How to report moneylender harassment in Singapore
You should lodge a complaint with the Ministry of Law if a moneylender engages in over-charging, harassment, improper onboarding, prohibited advertising, or unfair terms.
Prepare supporting documents such as contracts, receipts, statements, and screenshots. Include the police report number if applicable. Complaints can be filed via the ROM online portal or by calling 1800-2255-529. Your details will remain confidential without your consent.
Complaining to the Credit Collection Association of Singapore (CCAS)
When a licensed moneylender falls behind on collecting a debt, they may outsource the task to a registered debt collection agency. These agencies might contact your guarantors or, in some cases, inform your employer about the debt. Many — though not all — debt collection agencies in Singapore are guided by the Credit Collection Association of Singapore (CCAS) Code of Ethics.
If the agency contacting you is a CCAS member, lodging a CCAS complaint can prompt disciplinary action, including fines or suspension of their ability to collect debts. This channel works only if the agency is actually a member — CCAS does not have jurisdiction over unlicensed lenders or non-member agencies, and it isn't a substitute for reporting criminal harassment to the Police or filing a complaint with ROM.
Debt management and insolvency pathways
Falling behind on loan repayments can feel overwhelming, but you are not without options. Singapore has structured pathways that help borrowers regain control of their finances before things spiral further.
Negotiate early
Propose realistic repayment plans and confirm them in writing. Avoid informal roll-overs that come with hidden costs.
Self-exclusion (MLCB)
Apply for self-exclusion from unsecured loans through the Moneylenders Credit Bureau. This blocks new loans for a set period (typically one to two years, or two years by default for foreigners).
Debt Repayment Scheme (DRS)
If you have unsecured debts of up to S$150,000 and a regular income, you may qualify for the DRS. This allows repayment over a period of up to five years while avoiding bankruptcy.
Bankruptcy (last resort)
If debts exceed S$15,000 and repayment is not feasible, bankruptcy may be an option. This comes with significant implications for your financial future, so seek legal and financial advice first.
Licensed moneylenders play a role in Singapore's financial system, but strict rules are in place to ensure borrowers are treated fairly. Understanding what lenders can and cannot do gives you the confidence to borrow safely, while knowing the steps to take if you encounter harassment or illegal practices ensures you stay protected.
» MORE: Licensed moneylenders vs. banks: Best place to get personal loans in Singapore
Bank Personal Loan Alternatives
For borrowers with a stable income (typically S$30,000/year and above for Singaporeans/PRs), bank personal loans often provide much lower interest rates and higher loan limits compared to moneylenders. Here are top recommended bank personal loans to consider:
1. Trust Personal Loan
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Interest Rate: Competitive instant rates via Trust App
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Key Benefit: Instant approval and disbursement directly to your Trust account with no processing fees for eligible customers.
2. UOB Personal Loan
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Interest Rate: From 2.88% p.a. (EIR from 5.43% p.a.)
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Key Benefit: Flexible tenures up to 5 years with instant cash disbursement upon approval for existing UOB account holders.
3. SCB CashOne Personal Loan
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Interest Rate: From 2.88% p.a. (EIR from 5.84% p.a.)
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Key Benefit: Quick online application with cash disbursed in as fast as 15 minutes.
Gearing up for reno, studies or just have a sudden big bill to pay?
A personal loan can help ease your financial burden for a time. Compare the best options in Singapore and find one that for your needs.
About the author
SingSaver Team
At SingSaver, we make personal finance accessible with easy to understand personal finance reads, tools and money hacks that simplify all of life’s financial decisions for you.
The information on this page is for educational and informational purposes only and should not be considered financial or investment advice. While we review and compare financial products to help you find the best options, we do not provide personalised recommendations or investment advisory services. Always do your own research or consult a licensed financial professional before making any financial decisions.