What Should You Know About Moneylender Rules?


Financial liquidity is not always something you can achieve.

However, the presence of money lenders makes it easier to get help when you have unexpected financial obligations.

Did you know that the Singapore government enforces how money lenders should operate to minimise the occurrences of unlawful scenarios?

Let’s find out everything you must know concerning moneylender rules in Singapore.

How To Know If A Money Lender Is Licensed

Being in a situation that requires money to solve can be frustrating. Borrowing from a bank is ideal, but meeting the minimum requirements and rigorous approval process may prove to be unfruitful.

That’s where licensed money lenders come in. They are a viable option when looking for emergency funding.

But did you know that you can borrow from a licensed money lender or an unauthorised one without your knowledge?

A lack of knowledge on what to look out for makes you vulnerable to unscrupulous lenders or loan sharks. Save yourself the frustration and choose a legal money lender by checking the following moneylender rules:


As per the Moneylenders Act in Singapore, anyone dealing with loans must be licensed through the Registry of Moneylenders.

The regulatory body updates the list of licensed money lenders in Singapore every month, making it easier for borrowers to distinguish genuine money lenders from blacklisted money lenders.

You can also confirm the authenticity and validity of the lender’s license by reading reviews online.

Loan Offers And Advertisements

In Singapore, you are likely to have come across all sorts of loan offers.

If you are unsure how to settle on a licensed money lender, check how the money lender advertises loan offers.

The Ministry of Law (MinLaw) provides only a few legitimate channels for money lenders to advertise their services. These include the money lender’s website, consumer and business directories, and the premises where the money lender operates.

Hence, you should be wary of loan offers advertised via text messages and phone calls.

Most of these are unlicensed agencies violating the moneylender rules, loan sharks, or scammers.

When looking at loan advertisements, don’t forget to inquire about the money lender’s services to understand better, as some adverts could have inaccurate information.

Physical Office Address

An authorised money lender in Singapore must have a physical office address that you should visit mainly for in-person verification before the approved loan is disbursed to you.

A money lender that offers a loan without asking you to visit its physical office is most likely a loan shark.

Also, avoid a money lender that requests you to go to an unknown place apart from its registered physical address for verification purposes.

Tip: Always check with MinLaw for the updated and official list of legal money lenders in Singapore.


A Singapore legal money lender must draft a loan agreement, which it should explain and clarify to you before signing it.

Be wary of lenders that avoid clarifying loan agreements or those who are unwilling to return your documents.

Valid Fees And Interest Rates

As per the Moneylenders Act in Singapore, the Registry of Moneylenders stipulates interest rates and fees for loans – we detail the regulations below.

Note that it’s illegal for a lender to charge fees and interest rates without explaining them to you.

Money Lender Interest Rates And Fees

Before borrowing a loan, you must know the interest rates and fees applicable to avoid being taken advantage of or dealing with illegal money lenders.

The Registry of Moneylenders stipulates fees and interest rates as part of the moneylender rules, such as:

  • The interest rate shouldn’t be higher than 4% of the borrowed amount
  • Late interest fees cannot exceed 4% of the outstanding loan
  • Loan approval (processing or administration) fees shouldn’t exceed 10% of the principal amount
  • Late repayment fees should be no more than $60
  • Late fees and interest cannot exceed the amount borrowed

How Much Can You Borrow?

The amount you can borrow depends on the type of loan you want. For example, there is no limit on how much you can borrow if you opt for secured loans.

This is because a lender can claim the asset if you are unable to pay a money lender in Singapore.

For unsecured loans, money lenders use one gauge to determine how much you can borrow – your income status.

Here is the breakdown:

  • Singaporeans and permanent residents (PRs) earning less than $10,000 yearly can borrow no more than $3,000
  • Foreigners in Singapore earning less than $10,000 annually can get no more than $500
  • Singaporeans, PRs, and foreigners with a $10,000 to $20,000 yearly income qualify for a maximum $3,000 loan
  • You can get up to six times your income if you earn more than $20,000 annually, regardless of your citizenship status

Requirements And Considerations

Money lenders conduct eligibility checks before approving and disbursing loans. The main considerations are:

  • Your real name and age
  • Your NRIC number
  • Your nationality
  • Your residential address
  • Your phone number and email address
  • Amount you want to apply for
  • Your income status

Some money lenders might ask for additional information.

Shop around for the best loan offer. If you find one, you should only borrow what you need. Ensure you have the means to make timely repayment every month before you sign on the dotted line.

What Should Happen Before And After Loan Approval

The law requires a legal money lender to inform you of a few things before granting a loan. Let’s briefly look at both scenarios:

Before A Money Lender Approves A Loan

The money lender must clarify the loan agreement, tell you of any upfront fees, and inform you of the applicable costs.

In addition, it must notify you of installment details, terms of service, and possible loan collection measures if you default on the loan.

Also, the money lender must give you a caution statement and advise you on appropriate measures if you face unlawful conduct. Note that you must read and consent to a loan agreement as part of the moneylender rules.

Tip: Seek clarity on fees and terms of service to avoid any disputes.

After A Money Lender Approves A Loan

When your loan is approved, it is time for the lender to disburse funds in your account after deducting an upfront fee of no more than 10%. It is your right to get a copy of the loan agreement.

After receiving the loan, be sure to adhere to repayment terms and collect receipts for every installment you make.

Always check and verify your outstanding loan and ensure the details on the receipts are accurate. Remember to keep all payment details such as receipts and statement copies in a safe place.

What If You Cannot Pay The Loan?

There could be scenarios where you are unable to pay a money lender in Singapore.

You might consider the following:

  • Talk to your loan provider and renegotiate for flexible repayments such as extensions, or opt for loan refinancing. However, asking for extensions might attract additional fees such as late payment charges, resulting in larger payable amounts.
  • If you miss out on consecutive payments continuously or default loans, the lender can sue you.
  • You could lose your assets if you got a secured loan – the lender can seize your property or car to compensate for the loan.
  • You can file for bankruptcy if you struggle to repay loans exceeding $15,000.
  • If your loan is less than $150,000, you may resort to the Debt Repayment Scheme (DRS) instead of applying for bankruptcy. This alternative allows you to work on a manageable loan repayment plan through the help of an assistant from the Ministry of Law Insolvency Office. This way, a lender cannot file a lawsuit against you unless the court permits it.

Note that defaulting on loans is reflected on your credit report and impacts your credit score, which could deny you loans in future.

Get Loans Only From A Licensed Money Lender

Understanding the moneylender rules is the surest way to know what to expect when looking for loans.

Are you in financial distress and unsure where to get help? When looking for a quick loan, choose a reliable licensed money lender like Katong Credit.

Contact us now or apply for a loan today to address your emergency.

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