Money Lending Singapore: All You Need to Know Before Borrowing

Lending Money

Singapore’s household debt has hit a decade-low, with the government enhancing support through vouchers and cash handouts, as reported by the Straits Times. Despite these efforts, many Singaporeans still experience financial difficulties and seek financial assistance. 

This guide delves into the essential questions surrounding licensed money lending in Singapore. Whether you’re considering a loan for personal or business purposes, this guide will provide clarity and insights, ensuring you’re well-prepared to manage your financial obligations effectively.

What is Money Lending?

Money lending involves offering loans to individuals or businesses, with the expectation of repayment along with interest or fees. In Singapore, the government regulates this practice to protect both borrowers and lenders. 

Licensed money lenders allow borrowers to apply for personal loans up to 6x their monthly income, with interest rates ranging from 1-4%, and repayment terms of 6-12 months, providing a straightforward, fast, and easy process.

How the Money Lending Law Protects the Borrowers

The Money Lenders Act (Chapter 188) and the Registry of Money Lenders in the Ministry of Law govern money lending in Singapore. This framework limits the amount a money lender can lend and the interest rates they can charge to both citizens and foreigners, ensuring a regulated environment.

Identifying Licensed Money Lender

Verify that a money lender is licensed by checking the official list. Be cautious of lenders who use abusive language, ask for personal IDs, or engage in other unprofessional behaviors.

Loan Amounts

There’s no limit for secured loans, while unsecured personal loans vary based on income and residency status. Refer to the table below:

Borrower’s annual incomeSingapore Citizens and Permanent ResidentsForeigners residing in Singapore
Less than $10,000
At least $10,000and less than $20,000$3,000
At least $20,0006 times monthly income6 times monthly income

Interest Rates

The maximum interest rate a money lender can charge is 4% per month, applicable to both regular and late payments.


A licensed money lender can charge a late fee of up to $60 per month, an upfront fee of up to 10% of the loan principal, and legal costs for loan recovery.

Advertisement Regulations

Licensed money lenders can only advertise through business or consumer directories (in print or online media); websites belonging to the moneylender; and advertisements placed within or on the exterior of the moneylender’s business premises. All other advertising channels are prohibited. 

counting money

When is it Advisable to Take a Loan?

Taking fast cash loans such as personal or payday loans from a licensed money lender Singapore can be a good idea in several situations, particularly when you require immediate funds without the long-term commitment of expensive debt. 

“Personal loans are often utilized for urgent needs or when other alternatives are exhausted, ideally for a brief duration. They can help avoid evictions, repossessions, or other severe financial crises,” explains Spencer Betts, CFP and financial advisor at Bickling Financial Services, in a discussion with CBS News.

These include:

  • Medical Bills: Unexpected healthcare expenses can be covered quickly with a personal loan, ensuring timely medical attention without financial strain.
  • Home Renovation: Whether it’s a major overhaul or minor upgrades, personal loans can finance home improvement projects to enhance living spaces.
  • Paying Student Loans: Consolidate or pay off student loans to manage education expenses more effectively.
  • Repaying Family or Friends: Settle debts with loved ones to maintain healthy relationships without financial tension.
  • Wedding Costs: Cover the expenses of a dream wedding, from the venue to the honeymoon, with a personal loan.
  • Purchase of Consumer Goods: Finance the acquisition of high-value items like electronics or appliances to improve quality of life.
  • Starting or Funding a Small Business: Kickstart a new venture or inject capital into an existing business for growth and expansion.

Pros and Cons of Legal Money Lender

Personal loans can offer a convenient solution for those in need of financial assistance, providing benefits such as lower interest rates and flexible repayment options. However, it’s important to be aware of the potential risks associated with borrowing.


  • Lower interest than cards: “Personal loans typically offer lower interest rates compared to credit cards, ensuring a fixed monthly payment towards debt reduction,” states Renaud Laplanche, CEO and co-founder of Upgrade, a financial services firm.
  • Speedy Approval: Licensed money lenders typically offer rapid approval processes, allowing borrowers to access funds quickly for urgent financial needs, often within hours or a day.
  • Simplified Application: The application process is streamlined and user-friendly, requiring minimal paperwork. This efficiency leads to faster disbursement of the loan amount, making it ideal for those in immediate need of cash.
  • Flexible Repayment: Borrowers have the advantage of negotiating repayment plans that align with their financial situation. This flexibility includes installment options, allowing for manageable payments over time.
  • Legal Protection: Borrowers are protected under the Moneylenders Act, which sets guidelines and limits on the practices of licensed money lenders. This legal framework ensures fair treatment and safeguards against exploitative practices.


  • Short Repayment Periods: Loans from moneylenders may come with shorter repayment terms, requiring borrowers to pay back the loan quickly, which can be challenging for some.
  • Risk of Debt Trap: Easy access to loans from moneylenders can lead to impulsive borrowing, potentially resulting in a cycle of debt.
  • Impact on Credit Score: Failure to repay loans on time can negatively affect a borrower’s credit score, making it harder to secure loans in the future.
loan application form with approval

What Should You Consider Before Taking Up a Loan?

Here are some key considerations from the Ministry of Law Singapore:

  • Explore Alternatives: Before approaching a moneylender, consider other financial assistance options offered by various government agencies.
  • Legal Obligation: Remember that you are legally obliged to fulfill any loan contract you enter into with a licensed moneylender.
  • Financial Capacity: Ensure that you can abide by the contractual terms, considering your income and financial obligations. Only borrow what you need and can repay.
  • Understanding Terms: Ensure that you fully understand the terms of the contract, especially the repayment schedule, reasonable interest rates, and applicable fees.
  • Property Caveats: Be cautious of contractual terms that allow a moneylender to lodge a caveat on your property upon default, as this can significantly impact your ability to sell the property.
  • Comparison Shopping: Shop around and compare terms from different moneylenders to find the most favorable conditions. Do not rush into a loan agreement until you are satisfied with the terms.

Best Licensed Money Lender in Singapore

At A1 Credit, we are proud to be one of the trusted licensed moneylenders in Singapore, with over 15 years of experience in offering fast and reliable financial solutions. 

Our commitment to efficient service, transparent terms, and flexible repayment plans sets us apart. We are known for our quick approvals and disbursements, and we provide loans without the need for a credit score, making our services accessible to a broader audience. 

We operate under strict regulations set by the Ministry of Law, ensuring ethical practices and customer satisfaction.

Easy to Apply:

  1. Online Application: Submit your loan application form online here.
  2. Visit the Office: After assessing your application, loan officers will offer you a loan amount and explain the terms and conditions.
  3. Signing the Loan Agreement: Agree to the loan amount and repayment terms, and sign the contract.
  4. Receive Cash: Once the contract is signed, you will receive the cash instantly.


Requirements for Singaporeans and Permanent Residents (Minimum Income SGD $2,000)

  • Age 21 years and above.
  • Identity card / NRIC.
  • Proof of residence (utility bill, a letter addressed to you, and/or tenancy agreement).
  • Proof of employment (certificate of employment or 3 months recent payslip).
  • SingPass (to log into CPF, HDB, IRAS website).

Requirements for Foreigners (Minimum Income SGD $3,000)

  • Passport.
  • Work Permit / S-Pass / Employment Pass.
  • Proof of residence (utility bill or tenancy agreement).
  • Proof of employment (certificate of employment or 3 months recent payslip).
  • Proof of income (bank or account statement).
  • SingPass (to log into the IRAS website).

How to Avoid Loan Scams or Unlicensed Money Lenders

To avoid loan sharks, watch out for these warning signs:

  • Unlicensed Lending: Loan sharks often operate without a license. Always verify the lender’s license on the official Registry of Money Lenders website.
  • Aggressive Advertising: Loan sharks may use unsolicited SMS, WhatsApp, or social media ads, which are illegal for licensed money lenders.
  • Exorbitant Interest Rates: They often charge excessively high-interest rates, far above the legal limit set for licensed money lenders.
  • Lack of Transparency: Loan sharks may not provide clear loan terms, including interest rates, fees, and repayment schedules.
  • Demanding Personal Information: Be cautious if a lender asks for your SingPass credentials or retains your personal documents like NRIC, passport, or ATM card.
  • Harassment or Threats: Loan sharks may use intimidation, harassment, or threats to enforce repayment.
  • Unprofessional Behavior: They might exhibit abusive language, behavior, or unprofessional conduct during interactions.
  • Pressure to Borrow More: Loan sharks might pressure you to take larger loans or to roll over existing loans into new ones.
  • Unclear Contracts: They might ask you to sign blank or incomplete contracts or not provide a copy of the contract at all.
  • Withholding Loan Amounts: Loan sharks might withhold part of the loan amount as a fee, which is illegal for licensed moneylenders.
Young Couple Managing Finance

News Related to Loan Scams or Illegal Money Lenders

In a recent crackdown on loan shark activities, a 40-year-old man was apprehended in Sengkang on March 7, following a thorough three-day police investigation. This arrest highlights the ongoing issue of loan sharking across the island, signaling a stern warning to those entangled in such illegal practices.

The suspect’s involvement was uncovered after police were alerted to loan shark harassment at a residence on Anchorvale Road. The consequences of loan shark harassment are severe, including fines, imprisonment, and caning. This incident serves as a poignant reminder of the risks associated with illegal borrowing and the importance of seeking legitimate financial services.

The public plays a crucial role in combating loan sharking, encouraged to report suspicious activities. An islandwide operation in April 2023 led to the arrest of 124 individuals, illustrating the widespread nature of this issue. This tale of caution underscores the importance of vigilance and legal financial conduct.


Borrowing from a Singapore money lender requires understanding the legal framework to avoid falling for loan scams. Before taking a loan, consider your financial capacity, loan terms, and compare different money lenders to avoid falling into a debt cycle. Adhering to these guidelines ensures effective financial management and informed decision-making.

Key Takeaways:

  • Singapore’s Money Lenders Act ensures transparency and protection for borrowers, with regulated interest rates and strict licensing requirements for money lenders.
  • Licensed Money lenders offer quick access to emergency cash, clear loan terms, and flexible repayment options.
  • Before taking a loan, explore alternatives, understand the contractual terms, and ensure you can meet the repayment obligations to avoid financial strain.

In need of a quick, reliable cash loan? A1 Credit is one of the best money lenders in Singapore offering low interest rates and flexible repayment plans. Request a quote today!

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