How To Choose A Licensed Money Lender In Singapore

October 3, 0202

Do you need to borrow some money? You shouldn’t be ashamed to seek a loan when in a financial crisis.

A money lender in Singapore ought to be trustworthy and transparent in handling your situation.

Look for a registered and licensed money lender that can provide you with a suitable loan.

Singapore has all types of money lenders, which can make it difficult for a first-time borrower to verify and choose the best lender.

When searching for a licensed money lender in Singapore, it’s crucial to take into account a number of things.

Which Are The Licensed Money Lenders In Singapore? 

Licensed money lenders are authorised and registered financial institutions that offer loans to Singaporeans.

These money lenders operate strictly under the rules and regulations as established by the Ministry of Law, such as maximum monthly interest chargeable, lending limits, and recovery processes.

Therefore, borrowers benefit from the moneylending regulations because they prevent lenders from taking unfair advantage of them.

To ensure that you are covered by the laws established by the government, it is important that you only choose to engage with a licensed money lender in Singapore.

You can find an official list of licensed money lenders on MinLaw’s website. This list is updated on a regular basis, and only firms that follow the rules are included.

Hence, for your safety, you should only deal with institutions on this list. It is illegal in Singapore to lend money to others without being registered with MinLaw.

Note that loan sharks, or “Ah Longs”, do not follow the rules of the law.

This means that if you do not repay your debt on time, these people may be unethical towards you and your assets.

They are known to act aggressively and violently towards borrowers who miss their payment deadlines.

Are Licensed Money Lenders Allowed To Advertise? 

Have you ever received a call or an SMS regarding a loan offer?

These are almost certainly the work of unlicensed money lenders or loan sharks that are trying to lure you into a debt trap.

Licensed money lenders in Singapore are only permitted to advertise their services through their websites, business or consumer directories, and signages within and around their registered premises.

Any advertisements you see on other websites or apps are likely to be from money lenders that aren’t authorised by the Registry of Moneylenders.

Lenders are prohibited from using the following media and channels of advertising:

  • Email or SMS ads
  • Flyers
  • Door-to-door marketing
  • Banners that are not placed at the money lender’s office
  • Phone call marketing
  • Radio or television commercials
  • Advertisements in newspapers and other print media

Licensed money lenders that are found guilty of using prohibited methods of promotion and advertising will be fined and/or have their licenses revoked.

In addition, if a money lender’s advertisement is inaccurate and misleading, it will be found guilty and sentenced to a $20,000 fine and possibly up to six months in jail.

Any other advertisements that appear in the prohibited areas or that employ the prohibited advertising and marketing mediums should be disregarded as they are definitely from unlicensed money lenders.

Fees And Rates Charged By Licensed Money Lenders

No matter the borrower’s income or whether the loan is secured or unsecured, money lenders in Singapore can only charge an interest rate of no more than 4% per month on loans.

After subtracting the scheduled payments from the original principal, the loan’s monthly interest is based on the remaining principal balance.

Only amounts that are past their due dates are subject to a late penalty fee. Otherwise, the money lender cannot charge you a penalty on the entire balance of your loan.

In a nutshell, licensed money lenders are only permitted to charge the following interest rates and fees:

  • A fee of up to $60 per month for late payments
  • A fee of no more than 10% of the loan’s principal when the loan is approved
  • An interest fee of up to 4%

In addition, the total fees and charges on any money lender loan should not surpass the loan amount you initially borrowed.

How To Know If It’s A Loan Scam

Always ensure that you are dealing with a legitimate lender rather than a loan shark. Numerous illicit money lenders and fraudsters masquerade as reputable companies to swindle people out of their hard-earned money.

Before entering into a loan agreement, it’s strongly recommended to be vigilant and look out for the following signs:

  1. A licensed money lender must explain the terms and conditions, late fees, interest rates, and administrative costs to you in straightforward and understandable language before you sign the contract.
  2. Your loan contract is a legally binding agreement that outlines the specific terms and conditions under which both parties will conduct the transaction.
  3. Be wary of any money lender who asks for a deposit before approving a loan or sends you an online contract or PDF documents via WhatsApp; such individuals are likely fraudsters.
  4. By law, a licensed money lender is restricted in how they can advertise their services. They may only use directories, their official website, or place advertisements on the walls, doors, and windows of their premises.
  5. Using other advertising platforms could result in the suspension of their license and removal from Singapore’s Registry of Moneylenders.
  6. No registered money lender will charge a monthly interest rate or late payment fee for your loans that exceeds 4%. If someone asks for an advance payment or a fee higher than the 4% limit set by the Ministry of Law, consider it a red flag.
  7. There are also limits on the amount you can borrow as an unsecured loan from a registered money lender. If you are a Singaporean citizen or permanent resident with an annual income of less than $10,000, you can apply for an unsecured personal loan of up to $3,000 from the Ministry of Law. If your annual income is between $10,000 and $20,000, you are eligible for a $3,000 loan. If you earn more than $20,000, you can borrow up to six times your annual income.
  8. Foreign nationals residing in Singapore have different borrowing limits based on their annual income, capped at $500 per year.

Are 24-hours Money Lender Legitimate

Online loan applications have increased since the moneylending business went digital.

However, this rise in digital loan platforms has opened a window for unregulated money lenders to scam borrowers.

These loan scammers will also process and approve your application through a phone call, email, or SMS notification.

They will not require you to avail yourself for verification physically and sign the loan contract. Your loan could even be disbursed right away.

Some illegal lenders also market themselves as 24-hour money lenders.

It’s important to note that there are no 24-hour money lenders in Singapore as no lender has physical offices that are open around the clock.

The only indication is that the money lender can receive your loan application online any time of day but will process it the next working day.

A licensed money lender will need you to visit its office for in-person confirmation and contracting.

However, a loan scammer will never meet you face to face.

What To Do Before Taking A Loan

A money lender loan is an easy way of getting quick cash to sort out a temporary problem or purchase a big-ticket item.

However, before you decide to take that loan, it’s important to check a few things:

Your Credit Score

Many people believe that their credit score only matters when they apply for a mortgage or a car loan.

However, it can affect your ability to obtain a loan from money lenders in Singapore, especially because such loans are mostly unsecured.

As a result, lenders view their loans as high-risk portfolios and would prefer to lend to borrowers with good, though not the best, credit scores.

Hence, if you plan to take a loan, you should first check your credit rating with the Moneylenders Credit Bureau.

Choose The Lender Wisely

Before applying for a loan, it’s a good idea to do some background checks on the money lender to avoid dealing with a loan shark.

Only take a loan from a licensed money lender or a bank.

When taking a loan, you should also consider all available lenders, as not all money lenders are the same.

Some will offer a lower interest rate, whereas others may provide more flexible repayment terms.

Type of Interest

When looking for a personal loan, you will be surprised by the various interest rates that money lenders may charge on loans.

There are two types of interest rates. The simple or flat interest rate is usually lower than the effective interest rate.

Always compare loan rates from different lenders using the effective interest rate, which includes compounding and approval fees.

The annual flat rate is of importance when calculating your monthly repayment amount or a monthly installment.

Additional Fees And Charges

There are no free loans. If you find a lender advertising a zero-interest loan, it probably has other ways to earn the interest amount in the form of fees and charges.

These charges and fees are noted on the loan agreement as loan processing fees, among other terms.

This processing fee is usually deducted from the approved amount by your lender in advance. It could be anything between 2% to 3% of the approved amount.

Other fees for checking include late payment fees, cancellation fees, and even early redemption fees if you pay off your loan before its term expires.

Minimum Tenure

Most money lenders in Singapore will approve your loan for a minimum period of 12 months, regardless of whether you have the ability to pay in six months.

In so doing, they are guaranteed to get the most interest from your loan.

Early repayment will attract an early payoff charge to recover some of the unearned interest. This is why you should consider other credit options before deciding on taking a loan, such as using your credit card, which you can pay off anytime.

Understand The Loan Contract

Before signing the loan agreement, request that your money lender walks you through every detail.

If possible, you may need a lawyer to explain a few clauses. This will help you establish that your lender does not have a clause that allows them to charge what would otherwise be illegal fees.

How To Check If A Money Lender Is Licensed

Comparing a company’s name and contact information to those on the Ministry of Law’s list of registered money lenders is the simplest approach to confirm that you are doing business with a licensed money lender.

A list of Singapore’s authorised/licensed money lenders is added to the list each month.

Having a face-to-face encounter before signing the contract, investigating the lender’s place of business, and doing web research are other ways to confirm a lender’s legitimacy.

A blank Note of Contract should not be required of you to sign by any money lender you deal with.

Additionally, keep in mind never to provide a money lender a copy of any of your original papers, including your NRIC, driver’s license, work permit, or ATM card. Anyone who requests this of you is obviously a con artist.

Money lenders that operate illegally also:

  • Tack on extra charges without informing you.
  • Will not provide any paperwork, such as a contract or a record of your previous loan payments.
  • Resort to violence or force if you are late with your payments.
  • Will not be forthcoming with loan information such as interest rates.
  • May even prevent you from repaying your debt on time.
  • Request collateral even if it isn’t necessary for your loan.

What To Do After Loan Is Granted

The first thing to do is to confirm the amount the money lender has stated on the loan agreement.

If you need a specific amount, the offer should correspond to what was on your loan application to avoid having a deficit.

The money lender may, however, deduct a loan approval fee of up to 10% of the principal amount in advance.

Next, make certain that you pay each installment on time. Late payments will result in the accumulation of your installments, as well as late payment fees and late interest charges.

Thirdly, ensure that your lender provides you with a receipt each time you make a loan payment and double-check it to ensure accuracy.

A statement of account for each loan should be sent to you at least once a year so that you can check its accuracy.

Lastly, keep all payment receipts and account statements as proof of payments.

Where To Get Help If You Are Treated Unfairly 

Threats or intimidation are considered unfair practices and will be investigated by the Registry of Moneylenders.

If you experience harassment from any money lender, you should file a police report because these actions are severely punished.

The Registry will be ready to help as it takes complaints about money lenders seriously and will conduct thorough investigations.

If you have borrowed from a lender and want to know how to settle licensed money lender debt and also have a bank loan, you can seek help from Credit Counselling Singapore (CCS). The institution will come up with a debt restructuring plan.

The Debt Repayment Scheme (DRS) is a government-run programme that will allow you to combine all of your debts into one.

However, your sum total of the unsecured obligations and the overall loan amount must not exceed $150,000.


When in need of cash to sort out urgent matters, it’s very easy to fall into the hands of illegal money lenders that advertise their loans to offer quick solutions.

They will even approve and disburse your money fast but without any loan agreement of terms and conditions.

If you become a victim of such a scam, the loan will be very costly. The Ministry of Law has provided Singaporeans with a portal to verify whether the money lender is licensed to avoid being scammed. The list is updated regularly.

If you are in need of urgent cash from a licensed money lender in Singapore, GS Credit is registered with the Registry of Moneylenders and listed on its website.

It’s also a credible institution that handles its customers with utmost transparency and respect.

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