Borrowing Wisely: Licensed MoneyLender Guide in Singapore (2024)

pretty asian licensed money lender

While modern banking systems have made financial services accessible to the majority, a significant portion of the population still faces challenges when accessing credit during tough times. 

Even with over 97% of Singaporeans having bank accounts, many rely on family or friends for emergency funds, and only a fraction borrows from banks or licensed private lenders, according to Channel News Asia. 

The stringent regulations imposed on banks to ensure the financial system’s stability often result in limited access to credit for those who need it the most. This gap allows unauthorized lenders, commonly known as loan sharks, to operate.

Discover why opting for licensed moneylenders offers security, explore various loan options, understand the application process, learn to borrow wisely, and most importantly, spot and avoid loan scams to protect your financial well-being. 

Who Are Licensed Money Lenders in Singapore? 

A licensed moneylender in Singapore is an authorized individual or company permitted to provide loans to individuals and businesses while adhering to government regulations and guidelines set by the Ministry of Law.

Key points about licensed moneylenders in Singapore are as follows:

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They operate under the Money Lenders Act and must comply with rules governing interest rates, fees, and business conduct.

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Fair Interest Rates

Their interest rates are limited and must follow the guidelines established by the Registry of Money Lenders. The maximum interest rate that a licensed moneylender can charge, as dictated by the Ministry of Law, is 4% per month.

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Licensed money lenders are obligated to clearly explain loan terms in a language that borrowers can understand, promoting transparency and comprehension.

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Relaxed Requirements

They often cater to individuals who may not be eligible for conventional bank loans, including those with poor credit history.

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Short Term Loans

Licensed money lenders offer various loan types, such as personal loans, payday loans, and business loans, typically with shorter repayment periods.

Borrowers are advised to verify a lender’s license through the official website of the Ministry of Law to avoid illegal and risky lending practices. Check here for the latest list of licensed money lenders in Singapore. 

What Are the Key Differences Between a Bank and Licensed Moneylender?

When considering whether to borrow from licensed money lenders or traditional banks in Singapore, it’s essential to understand the differences between the two options. Here’s a comparison based on key criteria:

Criteria Licensed Moneylenders Banks
Minimum Age Requirements 21 years and above 21 years and above
Interest Rates 1-4% per month 3.5-11% per annum
Repayment Period Up to 12 months Up to five years
Application Approval Time Less than 30 minutes 3-5 working days

In summary:

Licensed Money Lenders: If you need a smaller loan and prefer a quick and less stringent approval process, a legal money lender might be more suitable.

Banks: If you’re looking for a larger loan, have a good credit score, and are comfortable with a longer approval process, a traditional bank could be the better choice.

How Do You Spot an Illegal Money Lender in Singapore?

Spotting illegal or unlicensed moneylenders is crucial to protecting your financial security and well-being. Here are some signs and tips to help you recognize and avoid illegal lenders:

Signs of Illegal Money Lenders Tips for Avoidance
No License: Check the Ministry of Law’s website for legal moneylenders. If they’re not listed, they’re likely illegal. Always verify a lender’s license before engaging with them.
High-Pressure Tactics: Aggressive sales tactics to rush you into a decision. Take your time to consider and compare options; don’t be rushed into anything.
Unusual Interest Rates: Charging exorbitant interest rates exceeding legal limits. Be aware of the current legal interest rate caps and avoid lenders with rates far above them.
No Clear Contract Terms: Legitimate lenders provide a clear and understandable contract. Review the contract thoroughly before signing and seek professional advice if needed.
Request for Personal Information: Asking for sensitive or unnecessary personal information. Never share personal passwords, PINs, or information beyond what’s necessary for a loan application.
Unprofessional Behavior and Advertising: Informal or unprofessional advertising. Choose lenders with professional advertising and a reputable online presence.
Upfront Fees: Demanding fees before loan processing. Licensed moneylenders will include fees in the loan contract; avoid those demanding upfront payments.
No Physical Office: Lack of a registered physical office. Prefer lenders with established and visible physical offices for credibility.
Unsolicited Offers: Receiving unsolicited marketing or sales messages. Be cautious with such offers and approach lenders directly through official channels.
Ignoring Borrower’s Ability to Repay: Not assessing your ability to repay. Avoid lenders who disregard your financial situation; responsible lending includes affordability checks.
Harassment: Threats, abusive language, or harassment. Report such behavior to authorities and seek legal assistance if necessary.
Trust Your Instincts: If something feels off, it probably is. If you feel uneasy about a lender, seek advice from financial experts or consider other options.

How to Lodge a Complaint Against Errant Licensed Moneylenders

Reporting Errant Licensed Moneylenders

If you encounter a licensed money lender who is not adhering to legal practices and guidelines, you can report them to the Registry of Moneylenders, a department under the Ministry of Law in Singapore. Here are the available methods for reporting:

1. Online: Visit the Ministry of Law’s website and submit a report through their designated form.

2. Hotline: Contact the Registry’s hotline at 1800-2255-529 to report the errant licensed moneylender.

3. In Person: Visit the Registry’s office in person to lodge a complaint.

Reporting Unlicensed Moneylenders (Loan Sharks)

Reporting Errant Licensed Moneylenders

If you come across an unlicensed moneylender or suspect illegal moneylending activities (loan shark activities), report them directly to the Singapore Police Force. Below are the avenues through which you can file a report:

1. Police Hotline: Dial the X-Ah Long hotline at 1800-924-5664 to report the unlicensed moneylender.

2. Visit Police Station: You can also visit your local police station and file a report in person.

3. In Person: Use the Singapore Police Force’s e-services portal to report illegal moneylending activities.

Guide to Choosing the Best Licensed Money Lender

Choosing the best licensed money lender is essential to ensure a positive borrowing experience and avoid potential financial pitfalls. Here’s a guide to help you make an informed decision:

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Verify the License

Start by checking the Ministry of Law’s website in Singapore to ensure that the money lender is licensed. Only deal with licensed money lenders as they operate within legal regulations.

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Loan Application Process

Assess the loan application process. A streamlined and efficient process is preferable, especially if you require quick access to funds. You can usually get your application approved in as fast as 30 minutes to 1 hour.

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Interest Rates and Fees

Compare the interest rates and fees offered by different licensed money lenders. Ensure they comply with the government’s guidelines to prevent being charged excessively. Do note that the maximum interest rate that a licensed moneylender can charge is capped at 4%.

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Charges and fees

If a borrower does not make the loan repayment on time, they are subject to a late repayment fee, which cannot exceed $60 per month.

Upon granting a loan, moneylenders can charge a one-time administrative fee, capped at 10% of the principal. This fee covers the administrative costs of processing the loan application.

Furthermore, licensed moneylenders can pass on any legal costs they incur during the loan recovery process to the borrower, as these costs stem from legal actions taken to recover outstanding debts.

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Flexible tenure

Check if the lender offers a flexible tenure option, allowing you to choose a repayment period that suits your financial situation and preferences. Typically for personal loan, lenders allow 6-12 months.

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Reputation and Reviews

Research the lender’s reputation and read reviews from previous borrowers. Look for feedback on their service, transparency, and overall customer experience.

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What Are the Types of Loans Offered by the Best Money Lenders Singapore?

Here are the different types of loans that individuals can borrow from licensed money lenders in Singapore:

Type of Loan Minimum Income Loan Amount Interest Rate Repayment Period
Personal Loan $2,000 Up to 6x monthly income 1-4% per month Up to 12 months, subject to agreement
Foreigner Loan $3,000 Up to 6x monthly income 1-4% per month Up to 12 months, subject to agreement
Payday Loan $2,000 Up to 1x monthly income 1-4% per month Within 1 month or next payday
Monthly Loan $2,000 Up to 6x monthly income 1-4% per month Up to 12 months, subject to agreement
Business Loan No minimum Up to $200,000 5-15% per annum Up to 24 months, subject to agreement
Bridging Loan $2,000 Up to 6x monthly income 1-4% per month Up to 1 month or until property’s completion date

Things To Consider Before Applying for a Loan

Before applying for a loan with an approved moneylender in Singapore, there are several important things to note to ensure a smooth and responsible borrowing experience. Here are some key considerations:

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Loan Amount and Repayment Ability

Assess your financial situation and borrow only what you can comfortably repay. Avoid taking on excessive debt that might lead to financial strain.

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Loan Purpose

Determine the specific purpose of the loan and ensure it aligns with your financial needs and goals.

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Hidden Charges

Be aware of any hidden charges or terms that may not be immediately apparent in the loan agreement.

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Credit Score

Be aware that your credit score may be checked during the application process, and a lower credit score might affect your loan eligibility or interest rate.

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Loan Terms and Conditions

Carefully read and understand the loan terms and conditions, including repayment schedules and any penalties for late payments.

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Responsibility and Borrowing Limits

Borrow responsibly and avoid multiple loans that may lead to over-indebtedness.

Eligibility Requirements and Application Process

Here’s a summary of the eligibility requirements for borrowing from licensed money lenders in Singapore:


Eligibility Requirements:

  • Minimum age of 21 years or older
  • Minimum monthly income of $2000

Documents Required

  • Identity card
  • Proof of residence (utility bill, a letter addressed to you, and/or tenancy agreement)
  • Proof of employment (certificate of employment or recent 3 months payslip)
  • SingPass


Eligibility Requirements:

  • Minimum age of 21 years or older
  • Minimum monthly income of $2000

Documents Required:

  • Passport
  • Employment Pass or S Pass
  • Proof of residence (utility bill, a letter addressed to you, and/or tenancy agreement)
  • Proof of employment (certificate of employment or recent 3 months payslip)
  • SingPass

Loan Application Process

The process for applying for a loan with a licensed money lender in Singapore typically involves the following steps:

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Apply In-Person or Online

If you choose to apply online, you will need to fill out the loan application form on the money lender’s website. After submitting the online application, you may receive a call from the lender to schedule an appointment for further verification and document submission. Alternatively, you can apply in person by visiting the lender’s office directly.

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Visit the Lender’s Office with Required Documents

When you visit the lender’s office, you should bring all the required documents, which may include idendification documents, proof of residence, proof of income, and any other documents specificed by the lender. The loan officers will evaluate your application, including assessing your eligibility based on your income, creditworthiness, and other factors.

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Sign the Loan Contract

If your loan application is approved, the loan terms and conditions will be explained to you in detail. It’s crucial to carefully read and understand all the terms before signing the loan contract to ensure you are fully aware of your obligations.

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Receive the Loan

Upon signing the loan contract, you will receive the approved loan amount instantly in cash. If you have any questions or concerns, don’t hesitate to seek clarification from the moneylender before finalizing the loan.


1. What should I do after being granted a loan?

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Verify Principal Amount

Ensure that the correct principal amount of the loan is disbursed to you. The money lender is allowed to charge an upfront processing fee of up to 10% of the loan principal amount.

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Timely Repayments

Pay the loan installments on time to avoid incurring late payment fees and late interest charges.

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Receipts for Repayments

Make sure the money lender issues a receipt every time you make any repayment towards your loan. Verify that all the details on the receipt, such as your name, repayment amount, and date, are correct.

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Statement of Account

Ensure you receive a statement of account for all your loans at least once every January and July. Check that the details, including your name, loan amount, and date, are accurate.

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Retain Documentation

Keep all statements of accounts and receipts of payments as documentation and evidence of payment for your records and future reference.

2. Is It Safe To Borrow From Licensed Moneylenders? 

With rules and regulations set to protect licensed moneylender and their borrowers, it is generally safe to borrow from them. However, it’s always a good idea to stay alert and pay attention to any potential red flags. By familiarizing yourself with the new moneylending regulations, you’ll be better equipped to look out for your own interests as a borrower.

3. What are the Pros And Cons Of Borrowing From legal Money Lenders?


  • Fewer document requirements: Licensed money lenders require fewer financial documents compared to banks.
  • Less stringent credit history checking: Approval is based on credibility to repay rather than strict credit scores.
  • Quicker approval: The loan approval process is faster, typically taking one to three days.
  • Fairly reasonable interest rates: Interest rates are capped at a maximum of 4% per month in Singapore.
  • Flexible loan terms: Moneylenders are accommodating with both approval and payment terms.


  • High-Interest Rates: Unsecured loans may come with higher interest rates due to increased credit risk.
  • Smaller loan amounts: Money lenders often offer smaller loan amounts based on the borrower’s income.
  • Shorter repayment schedule: Loans typically have shorter repayment periods, leading to higher monthly repayments.

Remember to always conduct thorough research and choose a licensed moneylender with a good reputation to avoid potential pitfalls and protect yourself from unscrupulous practices.

4. What are the Red Flags To Be Mindful of When Transacting With a Money Lender?

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Lack of transparency

The licensed moneylender will always provide a written contract containing relevant information like payment options, fees, charges, interest rate, and repayment schedules.

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Lack of paperwork and credit checking

Licensed moneylenders will always provide all the necessary documents for the loan process. They will also conduct credit assessments based on your submitted financial papers.

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Take on hold your possessions

Licensed moneylenders will never take on hold personal items like passports, ATM cards, or bankbooks as a form of payment guarantee.

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Failure to explain clearly

You should always ask for anything about the loan contract that is unclear to you to avoid future problems.

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Advertising via emails, SMS, or flyers

Licensed money lenders can only promote through their website, business directories, and within their business premises only.


In conclusion, it is crucial to choose a licensed money lender to ensure a safe and transparent borrowing experience. Licensed money lenders offer various advantages, including flexibility, quicker approval, and manageable interest rates. 

Key Takeaways:

  • Before applying for a loan, always check if the money lender is licensed by the Ministry of Law in Singapore. 
  • Assess your financial situation and borrow only what you can comfortably repay. Avoid taking on excessive debt that may lead to financial strain. Always read and understand the loan terms and conditions before signing the contract.
  • Be aware of the red flags associated with illegal or unscrupulous money lenders. Avoid lenders who use high-pressure tactics, charge exorbitant interest rates, or demand upfront fees. Report any suspicious activities to the authorities and seek assistance from reputable lenders.

Have a financial emergency? Contact A1 Credit, among Singapore’s best licensed personal loan money lenders. You can get up to 6x your monthly salary on the same day with fair interest rates and manageable repayment terms. Fill out the quick form to get started!

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