Key Takeaways
- Singapore’s new moneylender cooling-off period takes effect on 15 September 2026 and lasts for three business days.
- It applies to unsecured loans from licensed moneylenders, except business loans.
- Saturdays, Sundays and public holidays in Singapore are excluded when counting the three business days.
- No interest is charged when an eligible borrower cancels a covered loan during the cooling-off period.
- The licensed moneylender may retain only a permitted portion of the approval fee, subject to the applicable limit and the fee actually charged.
- The cancellation repayment generally consists of the amount disbursed plus the permitted portion of the approval fee, and cannot exceed the original principal.
Borrowing decisions are sometimes made under pressure. From 15 September 2026, eligible borrowers will have additional time to reconsider certain loans from licensed moneylenders in Singapore.
The framework introduces a mandatory three-business-day cooling-off period for unsecured loans, excluding business loans. An eligible borrower may cancel at reduced cost by returning the required amount. No interest is charged and approval-fee retention is limited.
This guide explains which loans qualify, how the period is counted, what cancellation may cost and what borrowers should do if they change their minds.
Table of Contents
The new moneylender cooling-off period gives eligible borrowers three business days to reconsider a covered unsecured loan after it has been granted.
According to the official MinLaw announcement, the framework balances borrower protection with compensation for work performed when granting a loan.
The borrower cannot keep the funds. The protection instead reduces cancellation costs by removing interest and limiting the approval fee retained.
Before the framework, MinLaw states that a licensed moneylender could retain the full loan approval fee and charge any interest accrued when a borrower cancelled a loan. The new rules limit these costs for eligible cancellations during the cooling-off period.
| Area | Before the New Framework | From 15 September 2026 |
|---|---|---|
| Time to reconsider | No mandatory three-business-day framework | Eligible borrowers may cancel during the cooling-off period |
| Interest on cancellation | Accrued interest could be charged | No interest for a qualifying cancellation |
| Approval fee | The full approval fee could be retained | Only the permitted portion may be retained |
| Total cancellation repayment | Depended on the applicable contract and charges | Cannot exceed the original loan principal |
This is a cancellation right within a specific timeframe. It does not automatically cancel a loan, and the loan continues if the borrower decides to keep it.
The framework applies to unsecured loans from licensed moneylenders, except business loans. An unsecured loan is a loan that does not require an asset to be pledged as collateral.
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An eligible personal loan may therefore be covered. Business loans are specifically excluded.
Borrowers should also confirm that they are dealing with a lender listed in MinLaw’s Registry of Moneylenders and check that the lender’s business details match the official records.
The cooling-off period is based on business days, not calendar days. The following days are excluded:
The period may therefore span more than three calendar days. For example, where Friday is counted as Day 1, the weekend is excluded before counting continues on Monday and Tuesday. This only illustrates weekend exclusion, not the deadline for a particular loan.
Check the deadline communicated by the licensed moneylender, especially when a public holiday is involved, and make contact early if considering cancellation.
Cancellation is not necessarily free. No interest is charged, but the licensed moneylender may retain a limited portion of the approval fee.
| Original Loan Principal | Maximum Portion of Approval Fee That May Be Retained |
|---|---|
| S$5,000 or less | Up to S$50 |
| More than S$5,000 | Up to 3.5% of the original principal |
These are maximum limits. The amount retained cannot exceed the approval fee actually charged, even when the percentage limit is higher.
The general calculation is:
Amount disbursed to the borrower + permitted portion of the approval fee = cancellation repayment
No interest is added, and the total cannot exceed the original principal. Check both the contractual principal and amount received because an approval fee may be deducted upfront.
MinLaw provided two illustrations showing how the calculation works.
| Calculation | S$1,000 Loan Example | S$10,000 Loan Example |
|---|---|---|
| Original principal | S$1,000 | S$10,000 |
| Approval fee deducted upfront | S$100 | S$200 |
| Amount disbursed | S$900 | S$9,800 |
| Maximum approval fee retained | S$50 | S$200 |
| Maximum cancellation repayment | S$950 | S$10,000 |
| Interest | S$0 | S$0 |
For the S$10,000 loan, 3.5% of the principal is S$350. However, the actual approval fee was only S$200. The lender may therefore retain no more than S$200, bringing the maximum cancellation repayment to S$10,000.
The exact calculation depends on the principal, amount disbursed and approval fee actually charged.
If the loan is unnecessary or unsuitable, act promptly:
Avoid spending the funds while considering cancellation because the required amount must be returned.
Cooling-off cancellation and early settlement are not the same process.
After the three business days, repayment or settlement depends on the loan agreement and applicable requirements.
Katong Credit’s frequently asked questions provide information about early repayment. Contact the lender to confirm the settlement amount and procedure.
The cooling-off period does not replace careful consideration. Before accepting a loan, review:
Read Katong Credit’s guide to understanding loan interest and its first-time borrower’s guide for further checks to make before signing.
The mandatory cooling-off period takes effect on 15 September 2026. It applies to covered unsecured loans from licensed moneylenders, except business loans, under the new framework from that date.
The cooling-off period applies to unsecured loans taken from licensed moneylenders, other than business loans. Borrowers should confirm whether their particular loan is covered and verify that the lender appears in MinLaw’s Registry of Moneylenders.
Saturdays, Sundays and public holidays in Singapore are excluded. As a result, the cooling-off period may cover more than three calendar days. Confirm the precise deadline with the licensed moneylender, particularly where a weekend or public holiday is involved.
No interest is charged for a qualifying cancellation, but the lender may retain a limited portion of the approval fee. For a principal of S$5,000 or less, the limit is up to S$50. For a principal above S$5,000, it is up to 3.5% of the principal. The retained amount cannot exceed the approval fee actually charged.
The borrower generally returns the amount disbursed after the upfront approval-fee deduction, plus the permitted portion of the approval fee. No interest is added, and the total cancellation repayment cannot exceed the original principal.
No interest may be charged when an eligible borrower cancels a covered loan within the cooling-off period. The lender may retain only the permitted portion of the approval fee, subject to the applicable limit and the fee actually charged.
No. Business loans are excluded from the mandatory cooling-off period. The framework applies to unsecured loans from licensed moneylenders other than business loans.
The reduced-cost cancellation right no longer applies after the three-business-day period. Any repayment, early settlement or cancellation after that point will depend on the loan agreement and applicable requirements. Contact the lender promptly if you are considering cancellation.
Singapore’s new moneylender cooling-off period gives eligible borrowers a clearer opportunity to reconsider an unsecured loan. From 15 September 2026, a qualifying cancellation will carry no interest, while the portion of the approval fee that may be retained is restricted.
Act early, confirm the deadline and cancellation amount, and keep written records. Check affordability and understand every term before accepting a loan.
If a licensed moneylender loan is appropriate for your circumstances, Katong Credit can assess your application and explain the applicable terms before you decide. Learn more about the Katong Credit personal loan or submit an enquiry through the loan application page. Approval remains subject to eligibility and assessment.
September 2, 2026 
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