How Much Can I Borrow From A Money Lender In Singapore

Dexter Lee September 28, 2023

How Much Can I Borrow From A Money Lender In Singapore

How Much Can I Borrow From A Money Lender In Singapore

The need for immediate finances can develop at any time in the changing terrain of Singapore’s financial centre. Access to rapid cash can be a lifesaver, whether for unexpected medical bills, house repairs, or grabbing a business opportunity. Our in-depth guide will delve into the realm of regulated money lenders in Singapore. It explains how much you can borrow and the essential aspects to consider. 

So, how much can I borrow from money lender? Let’s get started and learn!

Key Takeaways

  • Always read and understand the loan agreement
  • Verify a lender’s license to avoid scams.
  • Prioritise Timely Repayments 

What Is A Licensed Money Lender?

A licensed money lender in Singapore is a financial institution or corporation allowed by the government to make short-term loans to individuals and businesses. These lenders are essential in providing lending options to people needing help obtaining traditional bank loans for various reasons, including a lack of credit history or urgent financial demands.

Legal Requisites For Licensed Money Lenders In Singapore

Entities must meet stringent legal standards and follow strict rules to operate as licensed moneylenders in Singapore. These regulatory requirements safeguard borrowers and guarantee that lending practices are fair and transparent. 

The following are some of the most critical legislative requirements for licensed money lenders in Singapore:

  • Obtaining a licence from the registrar of moneylenders: Only entities that meet the relevant conditions, such as financial soundness and a commitment to upholding the law, are awarded a license.
  • Interest rate cap: Licensed money lenders must adhere to a tight interest rate cap on loans. As of my most recent knowledge update in September 2021, the interest rate cap for principal sums over SGD 3,000 is 4% per month. 

The interest rate is 4% monthly for principal amounts not exceeding SGD 3,000. Confirming the current interest rate cap with the Registry of Moneylenders is critical, as these rates can alter over time.

As a result, money lenders are only permitted to charge the fees specified by law. Furthermore, borrowing restrictions usually depend on the borrower’s annual income.

Role Of The Moneylenders Act And The Registry Of Moneylenders

Role Of The Moneylenders Act And The Registry Of Moneylenders

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    The Moneylenders Act is the fundamental statutory framework in Singapore. It oversees the activity of licensed moneylenders. The legislation establishes the legal standards and rules that money lenders must adhere to. 

    The following are some of the critical provisions of the Moneylenders Act:

    • Interest rate caps: As previously stated, the legislation defines the maximum interest rates registered money lenders can charge on loans.
    • Regulatory oversight: Under the Moneylenders Act, the Registrar oversees and regulates licensed moneylenders’ actions. The Registrar guarantees that money lenders follow the law and protect borrowers’ interests.
    • Licensing: The act defines the procedure for obtaining and renewing money lender licenses. Only entities that meet the relevant conditions can be licensed.
    • Consumer protection: The legislation includes rules to protect borrowers from unfair lending practices, such as those relating to loan terms and conditions.

    Ramifications For Non-Compliance

    Non-compliance with the Moneylenders Act rules can have significant ramifications for money lenders. Here are some of the potential consequences of non-compliance with the Moneylenders Act and its regulations:

    • Penalties: The penalties can include fines, which can be substantial. The specific amount of the fine can vary depending on the nature and severity of the non-compliance.
    • License revocation:  Revocation effectively puts the lenders out of business.
    • Loss of reputation: Negative publicity, legal actions, and fines can all tarnish a money lender’s image in the eyes of the public and potential borrowers.  
    • Regulatory oversight: Non-compliance can trigger more intense scrutiny and supervision by these authorities, making it difficult for money lenders to continue their operations without fully adhering to the rules.
    • Civil and criminal liability: Such liability can result in legal proceedings, fines, and even imprisonment in cases of severe misconduct.

    Is It Safe To Borrow From A Licensed Money Lender In Singapore?

    Borrowing from a registered money lender in Singapore can be a secure and well-regulated financial alternative. The government has implemented stringent safety measures and laws to safeguard borrowers from unfair interest rates and costs. 

    Safety Measures And Regulations In Singapore

    Here’s a look at the safety measures and regulations in Singapore:

    • Interest rate caps: Interest rate caps prevent excessive interest charges that can lead to financial hardship for borrowers.
    • Transparency in fees: Lenders must provide borrowers with clear and detailed information about all fees associated with the loan. 
    • Regulatory oversight: The Registrar of Moneylenders is responsible for regulating and overseeing the activities of licensed moneylenders. The regulatory body ensures that money lenders comply with the law and adhere to ethical lending practices.
    • Fee limits: Limits prevent the imposition of excessive fees that could burden borrowers financially.
    • Loan amount limits: Loan amount limitations must be followed by licensed money lenders to protect borrowers from taking on debts that exceed their ability to repay.  

    How To Verify A Money Lender’s License In Singapore

    You can check a money lender’s license using various techniques, including online through the Registry of Moneylenders’ website and physical verification. Here’s how to check a money lender’s license step by step:

    Online Verification Via The Registry’s Website

    The Registry of Moneylenders maintains an official website where you can verify a money lender’s license. Here’s how to do it online:

    1. Go to the Registry of Moneylenders’ Website, which is under the jurisdiction of the Ministry of Law.
    2. Look for a search feature, “Info for Borrowers,” and click on it
    3. From the pop-up menu, select the “List of Licensed Lenders in Singapore” option
    4. Read the disclaimer and click the blue link labelled “here” at the bottom of the page
    5. Verify the license on the next page

    Physical Verification

    In addition to online verification, physical verification can be used to prove the legitimacy of a money lender:

    1. Check the physical office: lenders in Singapore are typically required to have a physical office that is open to the public.  
    2. Ask for the license: Legitimate money lenders should be willing to provide this documentation for verification.
    3. Compare details: Scrutinise the license and pay attention to the license number, company name, and address.
    4. Contact the registry: If you have any questions or reservations about the license’s authenticity, you can contact the Registry of Moneylenders directly.

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    What To Consider Before Taking Out A Loan In Singapore

    Loans are a significant financial decision that one should carefully consider. It ensures that it corresponds with your financial goals and repayment capabilities. There are various vital considerations before applying for a loan in Singapore:

    1. Determine your needs: Calculate the exact amount you require and ensure it aligns with your ability to repay.
    2. Shop and compare: Compare interest rates and fees from various lenders to find the most favorable terms.
    3. Read the fine print: Understand all terms and conditions in the loan agreement to avoid surprises later.

    Loan Amount Limitations 

    Loan amounts in Singapore are limited and can vary depending on numerous criteria. It includes the type of loan and the borrower’s financial conditions.

    Distinction Between Secured And Unsecured Loans

    Here is the distinction:

    • Secured loans: Secured loans are backed by collateral, such as real estate or assets. The loans frequently offer more significant loan amounts and lower interest rates because the lender has collateral as security. However, if you do not repay, the lender may repossess the collateral.
    • Unsecured loans: Unsecured loans, on the other hand, do not necessitate the use of collateral. The loans are usually granted depending on your creditworthiness and financial situation. While they provide flexibility, they frequently come with smaller loan amounts and higher interest rates due to the lender’s heightened risk.

    Loan Amount Based On Annual Income

    Your annual salary frequently determines loan amounts, whether you are a Singaporean or a foreigner:

    • Singapore citizens: Depending on your annual salary, lenders evaluate your income to decide the appropriate loan amount for your financial situation.
    • Foreigners: Loan amounts for foreigners are determined by the type of work permit and annual income. Lenders often consider the borrower’s financial stability and sources of revenue.

    Interest Rates And Fees

    The government has set a maximum monthly interest rate of 4% for regulated money lenders. The regulation is in place to safeguard borrowers from exorbitant fees that cause financial stress.

    Late payment and accompanying costs are additional considerations. Money lenders may charge late payment costs if you skip a payment. To prevent the additional fees, it is critical to stick to the agreed-upon repayment schedule.

    Spotting Loan Sharks And Scams

    Loan sharks, often known as unauthorised lenders, pose a substantial risk. To be safe, keep an eye out for symptoms of unauthorised lenders. They frequently employ aggressive advertising, uninvited offers, and high-pressure techniques. Dealing with these businesses can result in financial and legal consequences.

    Verifying a lender’s license is a simple but crucial step. Look up their license number on the Registry of Moneylenders to establish their legality. Verification might assist you in avoiding scams.

    After Loan Approval

    Once your loan has been granted, analyse and comprehend the loan paperwork issued by the lender. Examine the terms, interest rates, and payback plan carefully. Before continuing, ensure that you understand the terms.

    Furthermore, to ensure your financial security, be vigilant about paying payments according to the agreed-upon schedule.

    Pros And Cons Of Borrowing From Licensed Money Lenders

    Borrowers in Singapore have both advantages and disadvantages when it comes to licensed money lenders:


    • Flexibility: Licensed money lenders offer more flexible loan terms than regular banks. They may be willing to cooperate with debtors in unusual financial circumstances.
    • Speed: Money lenders often provide faster approval and disbursement of funds, which can be helpful in an emergency.
    • Reliability: The Singapore government oversees registered money lenders, ensuring dependability and accountability. 

    Potential Drawbacks

    • High fees: Even though interest rates are capped, they might still be relatively high compared to viable alternative loan options.
    • Absence of ranking: Borrowers prioritising credit building may miss out on this benefit because money lenders need to contribute to credit scores. 

    Comparing Loans: Banks Vs. Licensed Money Lenders


    • Bank loans are less expensive than money lenders since they have lower interest rates.
    • Credit building has a favorable impact on your credit score and assists you in establishing a good credit history.


    • Stringent requirements make it difficult for people with poor credit or inconsistent income to qualify.
    • Protracted approval process, which can be inconvenient during an emergency

    Pros And Cons Of Licensed Money Lenders


    • Flexibility: Money lenders are frequently more flexible in their lending standards, allowing them to accommodate borrowers in various financial conditions.
    • Speed: Money lenders can provide faster approval and transfer of funds, so they are ideal for emergencies.


    • Higher interest rates result in higher borrowing options expenses.
    • Contribution to Credit Score Is Limited 

    What To Do If Unable To Repay The Loan

    Facing difficulties in repaying a loan can be challenging, but there are options and legal protections in place in Singapore to help borrowers:

    Legal Protections

    • Negotiate with the lender: Many licensed money lenders in Singapore are open to negotiating new repayment plans or providing temporary relief.
    • Debt repayment scheme: Singapore offers a Debt Repayment Scheme (DRS) for individuals with unsecured debts exceeding SGD 10,000. DRS helps you develop a structured repayment plan that suits your financial situation.
    • Insolvency and bankruptcy: In severe cases, you may consider options like a Debt Repayment Scheme (DRS) or bankruptcy if your debts are unmanageable. 

    Dealing With Harassment From Money Lenders

    If you face harassment or aggressive tactics from money lenders, protecting your rights and well-being is essential. Here are steps to take and organisations to contact for assistance in Singapore:

    • Document Harassment, including messages, phone calls, or visits. Documentation can serve as evidence if needed.
    • Report harassment or unethical practices to the Registry of Moneylenders and the police. Provide any evidence you have gathered.
    • Contact Credit Counseling Singapore (CCS) for financial counseling services. They can offer guidance on managing debt and dealing with harassment.
    • Contact the Consumers Association of Singapore (CASE) to get help in resolving disputes between consumers and money lenders.


    In conclusion, having access to funds when you need them is a vital part of financial stability. You can make informed decisions and borrow responsibly by understanding how much you can borrow from a licensed money lender in Singapore and the regulations safeguarding your interests.

    To control your financial future, always deal with registered money lenders. Borrow wisely, stay safe, and achieve your financial goals.

    Now is the time to act and secure the financial assistance you require. Take advantage of the chance to take charge of your financial future. Click here to go to our “Apply Now” page and immediately begin your path to financial success.

    Dexter Lee

    Born with a pen in one hand and a keyboard in the other, Dexter's been crafting words into beautiful prose since he was old enough to scribble on his walls (much to his mother's chagrin). He's a self-proclaimed pun master, often leaving his coworkers in stitches with his clever wordplay. He's been known to strike up conversations with strangers and turn their stories into captivating content that keeps readers coming back for more. Despite his unconventional approach to life and work, Dexter takes his job as a content manager very seriously. He knows that every piece of content he produces has the power to make a difference in someone's life, and he's committed to using his words for good.

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