In 2021, there were a total of 2,274 loan scams reported in Singapore. This was an increase of 296 cases from 2020, according to Channel NewsAsia (CNA).

The increase is not surprising given the many tactics scammers use to lure unsuspecting victims these days.

Let’s look at how to identify licensed and unlicensed money lenders in Singapore, starting with;

Which Are The Licensed Money Lenders In Singapore? 

The Ministry of Law permits licensed money lenders to lend money to Singaporean permanent residents and foreigners with valid employment passes.

But Singapore is home to many lenders, including unlicensed ones. Without the correct information, it is easy o fall victim to loan traps and scams set by illegal lenders.

To avoid such traps, check out this list of licensed money lenders in Singapore.

Are Licensed Money Lenders Allowed To Advertise? 

In Singapore, licensed money lenders are permitted to advertise their services but only through:

  • Their official websites
  •  Local consumer/business directories (in print or online media)
  • Posters put up outside their business premises

If you come across loan advertisements via other channels such as SMS, phone calls, and emails, it is contrary to the law, and most likely done by unlicensed money lenders.

So be wary if you receive text messages claiming to offer cheap and quick loans. Report them to the Registry of Moneylenders in Singapore.

Fees And Rates Charged By Licensed Money Lenders

Licensed money lenders in Singapore are allowed to impose the following fees and rates as of 1 Oct 2015:

  • A fee of not more than 10% of the principal of the loan granted
  • A monthly fee of not more than $60 for late loan repayment
  • If the money lender files a request to recover a loan and is granted, the court will order legal fees to be charged
  • A 4% maximum monthly interest rate for secured and unsecured loans, including loans repaid late

The total amount of all charges, including administrative fees, interest, late fees, and late interest, cannot be greater than the approved loan’s principal.

If you take a loan of $5,000, all the above fees and rates cannot exceed $5,000.

In addition, the late interest rates only apply to the amount of the principal repaid late. If you borrow $5,000 but were late to settle the last installment of $1,000, then the money lender will only charge a late interest rate for that $1,000.

A licensed money lender also cannot charge interest on amounts still owed but not yet due.

Referring to the above example, if you borrow $5,000 but fail to settle the first installment of $1,000 on time, the money lender will only charge you a late interest rate for that $1,000.

It will not charge you for the remaining $4,000, which is not yet due.

How To Know If It’s A Loan Scam

Illegal money lenders are now more cunning in their methods, making it easier for them to scam innocent victims.

For instance, some create websites and fake addresses to advertise their services. To assist you, we’ve listed a few ways to spot unlicensed lenders.

  • Advertising Means

Illegal money lenders and loan sharks will advertise their loans through SMS, emails, phone calls, and flyers. This is outside the law.

If you ever receive an advert through these channels, block and report the number immediately to the Registry of Moneylenders.

An unlicensed money lender will create a bogus website or social media account portraying itself as a legal money lender.

According to the Ministry of Law, such websites collect personal information from victims, such as their NRIC numbers, addresses, and contact information, which they can then utilise for illegal activities.

  • License And Physical Address

A licensed lender must have a state-approved moneylender license and business permit. It must be registered with the Registry of Moneylenders, whose regulations they are to abide by.

A money lender must also show you a valid license and not just claim to be licensed. This license should include details such as the business owner’s name, contact information, license number, physical address, and the number of employees.

If someone says they have a money lender’s license but won’t show it, the person is probably a fraud.

As stated earlier, a licensed money lender will verify your identity face to face before disbursing a loan, which is done at its office.

An illegal money lender will use a fake physical address (if at all) and will not require you to go to its premises to verify your identity and sign the contract. In such a case, cease communication with the lender.

Always check if a lender is included in the Ministry of Law’s list of licensed money lenders in Singapore.

  • They Are Available 24/7

Singapore does not have any regulated money lenders open 24/7. Although a lender’s loan application online platform is accessible online around the clock, the verification and payout processes are only done during regular business hours.

Hence, if you ask for a loan on a Sunday, you will probably get it on a Monday.

A website or lender that claims to operate 24 hours is a scam. Avoid being duped by such illegal lenders.

  • Fees And Interest Rates

Illegal money lenders will advertise quick loan processing and disbursement processes to entice victims.

However, to maximise their gains, such lenders will offer loans with exorbitant interest rates of more than 4% (above what is allowed by law).

They will also demand that you pay processing, administrative, and other fees upfront for the loan to be processed.

They may also request you to pay a ‘small’ fee for the loan to be disbursed.

  • Remote Loan Application And Disbursement

In addition to advertising their services online, many licensed money lenders in Singapore have made it possible for borrowers to fill up their loan applications online.

Unlicensed money lenders have taken advantage of this.

While a licensed money lender in Singapore will conduct a face-to-face check before processing and disbursing the loan, an illegal lender will, on the other hand, approve your loan via a phone call, email or text message without a formal contract.

This means the loan will be disbursed immediately without any verification. This is a sure-fire sign something is very wrong with the lender.

What To Do Before Taking A Loan

Before you apply for a loan, there are some factors to consider, including:

  • The Type Of Loan You Need

When applying for a loan from any money lender Singapore, figure out the type of loan you need.

There are different types of loans, including personal, mortgage, auto, student, and small business loans.

These loans can be put in two categories:

  • Secured loans – These are loans that require you to offer up something as collateral, such as your property, which will be used to recover the loan should you fail to repay. Examples of such loans are auto and mortgage loans.
  • Unsecured loans – These are loans that require no collateral or surety and are approved outright. They include student, personal, and credit card loans.

Once you have decided on the loan you’ll take, gather more information about the loan. Learn more about the loan’s payment terms, including interest rates, fees, and other clauses.

  • Get Your Credit Report

To know your credit rating, consider getting your credit report from either the Moneylenders Credit Bureau (MLCB) or Credit Bureau Singapore (CBS).

Your credit rating shows your ability to repay a loan on time based on your past loans. While not all licensed money lenders will check your credit report, some may not approve it if you have a bad credit rating.

If you have a bad credit report, consider improving it before applying for a loan. To improve your report, you can:

  • Build your credit file
  • Make repayments on time
  • Catch up on past-due accounts
  • Pay down revolving account balances
  • Check if there are any errors in your report
  • Request for any negative reviews to be removed once loans are paid off
  • Your Loan Eligibility 

Are you eligible for the loan you’re seeking to apply for?

The best way to answer this is to check your annual income. Your income will dictate the maximum amount you can borrow, regardless of the loan type you’re applying for.

The maximum amount you can borrow from licensed money lenders in Singapore for unsecured loans is shown in the table below:

Borrower’s annual incomeSingapore Citizens and Permanent ResidentsForeigners residing in Singapore
Less than $10,000$3,000$500
and less than $20,000
At least $20,0006x monthly income6x monthly income
  • Documents Needed For The Loan Application

When applying for a loan, there are crucial documents you’ll need. These include:

  • Proof of income for the last three months
  • Proof of residency
  • Income tax documents
  • Credit score report

If you are a foreigner in Singapore, you’ll need:

  • A valid passport
  • A valid work permit
  • Bank statements
  • A copy of your rental agreement
  • Letters confirming employment from your employer

How To Check If A Money Lender Is Licensed

To know if a money lender is licensed, check out its:

  • Terms Of Contract

Before you sign the loan contract, a money lender in Singapore will review all the terms and go through the entire document with you.

If the lender doesn’t outline these conditions, or sends the loan contract by SMS or email, it is most probably not licensed.

  • Fees And Interest Rates Of Licensed Money Lenders In Singapore

Money lenders are permitted by the Ministry of Law to only charge a maximum monthly interest rate of 4% on all loans, including those that are unpaid.

A late fee of no more than $60 per month and a fee of no more than 10% of the loan’s principal can also be charged by a licensed money lender in Singapore.

  • Means Of Advertising 

In Singapore, only three methods of advertising are allowed for licensed money lenders:

  • Consumer/business directories
  • The money lenders’ official websites
  • Posters hung on the exterior of their business premises

Any other medium, including SMS, phone calls, WhatsApp text messaging, pamphlets, and emails, is unlawful and probably done by a loan shark or rogue unlicensed money lender.

  • Maximum Amount You Can Borrow 

There is no maximum amount you can borrow for secured loans. However, there is a cap for unsecured loans, as outlined in the table earlier.

What To Do After Loan Is Granted

Once your loan has been approved and the 10% fee deducted, ensure the right amount is disbursed to you.

Keep the following records as well for future reference:

  • A duplicate of the loan contract
  • Receipts for each loan payment made
  • Copies of each relevant document
  • A list of all your loans with an account statement

Aim to pay off each installment on time. This will guarantee that you avoid paying late fees and interest rates.

Late payments also damage your credit report, reducing your future loan eligibility.

Where To Get Help

According to the Ministry of Law in Singapore, you can contact any of the following agencies if you need assistance paying off significant debt.

These organisations provide advice on how to settle a money lender, general credit management, and, in some cases, can help negotiate a debt repayment plan with your creditors.

  • Adullam Life Counselling

Address: 151 Chin Swee Road #08-04 Manhattan House Singapore 169876

Tel no.: 9423 8832

Email: [email protected]

  • Association of Muslim Professionals (AMP)

Address: 1 Pasir Ris Drive 4 #05-11 Singapore 519457

Tel no.: 6416 3960

Email: [email protected]

  • Credit Counselling Singapore

Address: 51 Cuppage Road #07-06, Singapore 229469

Tel no.: 6225 5227 / 6338 2663

Email: [email protected]


When applying for any loan in Singapore, it is crucial to ascertain that you are dealing with a licensed money lender.

This means you need to look out for the lender’s valid license, means of advertising, and contract terms.

Be sure to read each detail carefully to avoid falling into loan scams.

If you need more information on licensed money lenders, contact a loan officer from Credit 21.