How To Choose A Licensed Money Lender In Singapore

Dexter Lee July 15, 2024

How To Choose A Licensed Money Lender In Singapore

Key Takeaways

To choose a licensed money lender in Singapore, verify their license on the Ministry of Law’s website, ensure they follow legal advertising methods, and understand the fees and interest rates they can charge (capped at 4% per month). Avoid lenders offering loans via unsolicited messages or without proper documentation. Always check the lender’s credibility and your ability to repay before borrowing.

Sometimes you may face a cash crunch due to unforeseen circumstances.

Maybe you need money for home renovation, car repair or debt consolidation, and your savings might not be enough to meet your expenses.

Quick cash or short-term loans from a licensed money lender in Singapore can financially assist you in such emergencies.

While banks are reliable financial institutions for borrowing, the loan process can be tedious, takes time and is more catered to long-term loans.

Hence, many turn to a licensed money lender in Singapore to meet urgent cash demands that they cannot fulfil through their income or savings.

Which Are The Licensed Money Lenders In Singapore? 

Licensed money lenders in Singapore are private moneylending individuals or institutions with a legal license to lend money to borrowers in Singapore.

They are authorised legal lenders and act within the purview of the Moneylenders Act.

This means they are approved by the Ministry of Law, and follow the rules and regulations set up by the Registry of Moneylenders.

You can verify their details in the list of licensed money lenders that is updated by the Ministry of Law every month.

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    Any moneylending institution that is not listed on the MinLaw website and carrying out loan transactions online or via calls and SMS without the proper documentation is an unlicensed lender.

    Such illegal lenders are also known as ‘’Ah Longs’’ in Singapore.

    Are Licensed Money Lenders Allowed To Advertise? 

    Under the money lenders’ advertising rules, licensed money lenders are only allowed to advertise on three channels for advertisements or promotions:

    1. Business Or Consumer Directories: Money lenders can list their business online or in print directories.
    1. Their Website: They can run advertisements on their websites, not on websites belonging to any other business or individual.
    1. Advertisements Within Their Office Premises: Licensed money lenders can place their advertisements on their office walls, gates, windows and shutters, including the interiors and exteriors of their business premises.

    Any other means of advertisement or promotion is prohibited. Hence, a licensed money lender cannot:

    • Advertise through calls, SMS, flyers or emails. They cannot promote their services through newspapers and social media platforms.
    • They cannot make false promises in advertisements to mislead borrowers or lure them into unhealthy borrowing.

    If a licensed money lender engages in any form of restricted advertisement practices, it is violating the law. If you report the lender, it will be investigated by the Registry and risks losing its license.

    Also, borrowers should never rely on the contents of advertisements, even if it’s from a legal money lender. Always seek clarification about your loan from the money lender in person.

    Fees And Rates Charged By Licensed Money Lenders

    A licensed money lender in Singapore must follow the rules for money lenders set by the Ministry of Law.

    There is a limitation on the interest rate, late fees and any other fees that borrowers may incur.

    Licensed money lenders can impose the following charges:

    1. Interest Rate: A money lender can charge a maximum interest rate of 4% per month regardless of a borrower’s income or whether the loan is secured or unsecured.
    1. Late Interest Rates: When a borrower fails to repay the loan on time, a maximum late interest rate of 4% can also be imposed on the late installment, not the remaining loan.

    A lender calculates the late interest rate on the loan amount remaining after the deduction from the original principal amount.

    1. Administrative Fee: Once the loan is approved and granted, a money lender can charge an administrative fee of not more than 10% of the principal amount.
    1. Late Fee: A licensed money lender cannot ask you to pay a late fee of more than $60 per month.
    1. Legal Costs: If a borrower defaults on a loan, the court may order him or her to pay legal costs to the money lender for a successful claim for the loan recovery.

    Overall, a lender cannot ask you to pay double the principal amount after imposing an interest rate and all other administrative charges.

    For example, if you borrow $15,000, a money lender cannot require you to pay $30,000 even after including late interest rates or fees.

    How To Know If It’s A Loan Scam

    There are increasing cases of loan scams where loan sharks are masquerading as licensed money lenders to deceive innocent civilians facing a cash crunch.

    They use deceptive tactics such as offering higher loan amounts without any documents or verification process to scam the public.

    Identifying such loan scams is essential to protect yourself from financial troubles and harassment from unlicensed money lenders.

    Here’s how to ascertain loan scams:

    • Prohibited Advertisements: If you receive messages, emails or calls offering you instant loans, beware because licensed money lenders are not allowed to indulge in such activities. Money lenders can only give you a loan when you apply for it.
    • Online Loans: Borrowers can apply for loans online, but they have to visit the money lender office for verification to get the loan. If a lender offers you loans online without any documentation, you may be dealing with an illegal money lender.
    • 24-Hour Loans: In Singapore, there’s no such thing as 24-hour loans. Many moneylending websites might allow you to apply for loans anytime, but they do not operate 24 hours. Loans are approved during working hours only. Licensed money lenders are not permitted to be operational 24 hours.
    • Document Confiscation: Licensed money lenders usually return your documents instantly after verification. If a lender asks for personal details such as your Singpass user ID or password and withholds your driver’s license, NRIC or any other document, it’s a loan scam. You should report them to the police.
    • Weakly Loans: The Registry of Moneylenders often discourages licensed money lenders from offering weekly loans. Borrowers might incur high interest and fall into recurring debts on such loans. Avoid weekly loans as they may be loan scams.

    Save yourself from loan scams and borrow from CreditMaster at some of the lowest interest rates.

    What To Do Before Taking A Loan

    There may be instances where you may require urgent cash loans. While financial problems are distressing, you should always be careful when taking a loan.

    Here are a few things to check before borrowing from a licensed money lender:

    1. Credibility Of The Money Lender

    Licensed money lenders in Singapore are required to have a physical address. At their office premises, they must explain the loan’s contractual terms in a language you understand.

    Before you take a loan, check the credibility of the lender by:

    • Verify its details in the money lender list of the Ministry of Law.
    • Check its website and reviews from other customers, and find out how long it has been serving as a money lender.
    • Compare prices with other lenders in the market to get a loan at a competitive interest rate.

    Establish the credibility of your money lender to lend money before you take a loan. If you find it a hassle to verify everything, you can approach CreditMaster for a quick cash loan.

    • Ascertain Your Ability To Repay The Loan

    Once you have decided to take a loan from a licensed money lender, consider if your finances will allow you to repay the loan on time.

    A borrower is legally obliged to fulfill the contractual terms of a loan contract once it is signed. Failure to do so might result in financial strain on your family.

    • Check Your Credit Score

    While many licensed money lenders may not ask for a credit score for small loans, they might check your creditworthiness to discern your ability to repay the loan for higher principal amounts.

    Lenders usually purchase a borrower’s credit history from the Moneylenders Credit Bureau before approving a loan.

    You can buy your credit report from the Moneylenders Credit Bureau to check your ability to pay the loan. If it does not look good, you should improve your credit score before taking a loan.

    The Moneylenders Credit Bureau is a government agency that has a data repository of borrowers’ loan and repayment records from licensed money lenders.

    • Ask For A Cautionary Statement 

    The cautionary statement is a written document that states the terms and conditions of borrowing from a money lender.

    It has details regarding where to complain, methods used by money lenders to get a loan and other warnings that borrowers must be aware of before taking a loan.

    The Ministry of Law regulations require licensed money lenders in Singapore to issue a cautionary statement, which must be duly signed by the lender and borrower before a loan is approved.

    Remember, this is different from a loan contract, which contains only the terms of loans and interest rates, late fees, and other conditions.

    • Beware Of Collateral Terms

    Be careful of any terms in a loan contract that may allow a money lender to sell your property during a loan default.

    In such instances, your property proceeds will directly go to the money lender, and it can wipe out all the earnings you get from your real estate.

    How To Check If Money Lender Is Licensed

    Borrowers can visit the Ministry of Law website to check if a money lender is legal and reliable. The list is updated monthly.

    If you cannot find a money lender on the list, it may be unlicensed.

    Apart from this, here are a few things to check if a money lender is licensed:

    • It must have a physical address and carry out in-person document verification.
    • A licensed money lender cannot charge interest rates higher than what has been approved by the Registry of Moneylenders, which is 4%.
    • As mentioned above, licensed lenders cannot advertise through ads on social media or in newspapers. So take note of their advertising sources to verify if they are licensed money lenders.

    What To Do After Loan Is Granted

    After the loan approval, the money lender has to transfer the principal amount to you. This is when it may charge an approval fee of up to 10% of the principal amount.

    Now, the onus is upon you to repay the loan. As a borrower, you should be aware of the following after the loan is granted:

    • Keep a copy of the loan agreement with you. Make a soft copy and save it in your drive for safety and keep a hard copy with you.
    • Do not forget to ask for a receipt every time you pay an installment. Also, check particulars such as your name and date in the receipt.
    • Repay your loan on time to avoid incurring late fees.
    • Ensure that you receive an account statement at least every January and July, which includes a list of payments made and the remaining amount.
    • Retain all the documents, including your receipts and statement of accounts, as evidence.

    Where To Get Help For Money Lender Issues in Singapore

    Suppose a money lender resorts to harassment or any unethical practice for loan recovery. You can contact the Registry of Moneylenders at 1800-2255-529 or file an online complaint here.

    Borrowers also have the option to reach out to a Small Claims Tribunal or courts under the Consumer Protection (Fair Trading) Act and pursue a legal case to settle a licensed money lender following unfair loan practices.

    However, if you are being harassed by an unlicensed lender or a loan shark, you must reach out to the police to file a complaint.

    Loan Default

    If you are unable to repay the loan, here are the options that you have:

    1. Talk to your money lender and request an extension period to repay the loan.
    1. Approach a social service agency like Adullam Life Counseling, which helps borrowers with serious debt problems through credit counseling.
    1. You can file for bankruptcy if your loan amount is greater than $15,000, which can stop the interest accumulation and legal proceedings against you until you have enough money to repay the loan.

    Bankruptcy comes with a few caveats. You cannot leave the country, might face difficulties finding a job, and cannot obtain a credit of more than $1,000.

    Remember, bankruptcy should be your last resort because it will make a massive dent in your credit history.

    Visit the Ministry of Law website for advice on legal alternatives to bankruptcy.


    As a borrower, be mindful when borrowing and take every precaution to protect yourself.

    Always approach licensed money lenders that are on the list of licensed money lenders. However, that does not mean you can borrow from legal lenders without any worry.

    Do your research and check your ability to repay before you borrow from a licensed money lender in Singapore.

    If you need financial help, CreditMaster offers quick loans at reasonable interest rates.

    Contact us today or apply for a loan with us now – all it takes is a few minutes.

    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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