There may come a point in time, probably when unforeseen circumstances arise, where you find yourself stuck in a financial rut. In times of financial need, there are many platforms you can turn to for quick financial relief. For those who are business owners, you can check out SME loans. For those with fully paid up private residential properties, you can check out about Refinance with Equity Term loan. Else a Licensed Moneylender can also be one of them.

license moneylender
Things you should know about licensed money lender. Image credits: Blake Wisz, Unsplash.

In this article, we will share some important things you should know before you apply for a loan from moneylenders with a money lending license in Singapore.

Is it safe to borrow from licensed money lender?

Generally licensed moneylender has to abide by rules and regulations. There are a list of dos and don’ts that they are supposed to carry out. As long as it is a licensed moneylender, you can check their behaviour against what they are supposed to do and allowed to do. If they do not comply, you can then raise a complaint against them. But there are a lot of FAKE moneylenders out there that is pretending to be real licensed moneylenders, this is what you need to be careful about.

Do moneylenders need to be licensed?

Yes, moneylenders in Singapore needs to be licensed. And you can check if they are legit.

How to identify a licensed moneylender – Who are the moneylenders

The first thing you should do before applying for a loan is to make a list of moneylenders you wish to borrow from, then take time to find out if they are legal.

There have been increasing cases of scammers posing as licensed moneylenders to solicit victims’ personal information for unlawful purposes. A licensed moneylender with a money lending license in Singapore is not allowed to solicit for loans via text messages, calls, or social media. They are required to adhere to the guidelines under the Ministry of Law.

Check if a moneylender is legit

You are strongly advised to visit the moneylender’s website and verify here-

Prohibited practices for a licensed moneylender

Here are some practices a licensed moneylender in Singapore is prohibited to carry out. If you spot any of these red flags from your shortlisted list of moneylenders, you should avoid dealing with them.

  • Fishing for your SingPass ID or password
  • Failing to return your important personal identification documents such as NRIC and passport
  • Asking you to sign a blank or incomplete contract for the loan
  • Approving your loan without explaining the terms in detail
  • Failing to provide you with a copy of your loan contract
  • Soliciting for loans via text messages and phone calls

Fees that a licensed moneylender can charge

Under the Moneylenders Act, the maximum interest rate that a licensed moneylender in Singapore can charge is 4% per month based on the borrowed amount or late interest from a late payment.

The interest rate should be computed based on the monthly outstanding balance of the principal remaining after deducting the payments made. For instance, if your loan amount is $10,000 and you have already paid $5,000, then the 4% interest rate should only be computed for the remaining $5,000.

A licensed moneylender may also impose other fees such as loan approval fees or legal costs incurred by the moneylender to recover their loans in the event that the borrower fails to make payment.

What Happens after the Loan Has Been Approved?

After a loan has been approved, the licensed moneylender has to deliver to you the correct principal amount of the loan. The moneylender is permitted to deduct upfront a loan approval fee of only up to 10% of the principal amount.

Once you receive the proceeds of the loan, the obligation to repay the loan now arises, based on the terms agreed upon.

As the borrower, make sure you are also aware of the following things from the time you receive the money obtained through the loan and even during or after payment:

  • Obtain a copy of the loan agreement;
  • Make sure the moneylender issues a receipt every time payment is made;
  • Make sure a statement of account stating the moneylender’s particulars is issued at least once every January and July for all the outstanding loans, including a list of payments made and the remaining balance of the account/s; and
  • Retain, for safekeeping and documentation, all copies of statements of account/s and receipts of payment.

For more information on The Moneylenders Credit Bureau and to retrieve your Loan Information Report, you may visit

This article is contributed by Credit Bureau, this does not constitute and endorsement by

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Written by Credit Bureau Singapore

Credit Bureau (Singapore) Pte Ltd (CBS) is Singapore's most comprehensive consumer credit bureau that has full-industry uploads from all retail banks and major financial institutions. It is a joint venture between The Association of Banks in Singapore (ABS) and Infocredit Holdings Pte Ltd.

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