If you’re considering borrowing money from a money lender in Singapore, it’s important to be aware of the moneylender rules and regulations.

By understanding the laws that money lenders must abide by, you can protect yourself from predatory lending practices and make sure you’re getting a fair deal.

In this blog post, we’ll look at some key moneylender rules to be aware of before signing any paperwork. So if you’re curious about what’s involved in borrowing from a money lender, keep reading.

How To Know If A Money Lender Is Licensed

One of the first things to know about moneylender rules is that all money lenders must be licensed in order to operate legally in Singapore.

You can check if a money lender is licensed by searching for its name on the Registry of Moneylenders’ website. The Ministry of Law maintains this Registry, and its website lists all licensed money lenders in Singapore.

Or you can call the Registry at 1800-2255-529 and enquire about a specific money lender.

How Much Can You Borrow?

As per Singapore’s Moneylenders Act, licensed money lenders are allowed to lend certain fixed amounts of unsecured loans based on a borrower’s annual income.

Here’s how much a Singapore legal money lender can give you:

  • $3,000 when your annual income is between less than $10,000 as a Singapore citizen or permanent resident (PR)
  • $500 when your annual income is less than $10,000 as a foreigner residing in Singapore
  • $3,000 when your annual income is at least $10,000 but less than $20,000 as a Singapore citizen, permanent resident, or foreigner residing in Singapore
  • Six times your monthly salary when your annual income is $20,000 or more, no matter your residency status

Knowing the maximum limits will help you understand how much money you’re allowed to borrow from a money lender. It’s important to note that these moneylender rules are in place to protect consumers from taking on too much debt.

Money Lender Interest Rates And Fees

Under the Moneylenders Act, licensed money lenders can charge fixed fees and interest rates for personal loans.

The maximum interest rate a money lender can charge is 4% per month, while the late payment fees are capped at $60 per month.

In addition, licensed money lenders in Singapore are allowed to charge a processing fee of no more than 10% of the loan amount and a legal fee of no more than $100.

A licensed money lender has the right to charge a $100 legal fee when it has to engage a lawyer to collect your outstanding dues.

It’s important to be aware of all the fees and interest rates that a money lender is allowed to charge before signing any loan agreement. This way, you can be sure that you’re not being overcharged and that you’re getting a fair deal.

Requirements And Considerations Of Taking A Loan

Now that you know about money lenders’ licence, loan limits, interest, and fees, let’s look at some other things you must know before taking a loan.


First of all, make sure you’re eligible for the loan and fulfil the following requirements:

  • You are at least 21 years old
  • You are employed or have a stable monthly income
  • You have Singapore citizenship or valid PR status

Once you confirm your eligibility, it’s wise to gather your documents in advance. The documents might vary from one money lender to another, but they usually ask for the following:

  • NRIC or passport
  • Letter of employment
  • Latest computerised payslip
  • Current credit score and Central Provident Fund (CPF) statement
  • Tenancy agreement, employment letter, employment pass, and bank statements (for foreigners)


Before taking a loan from any money lender, it’s important to consider the following:

  1. Your financial situation: Can you realistically afford the loan and the repayments?
  2. The purpose of the loan: Do you really need it, or can you wait?
  3. Other options:  Are there any other ways to get the money you need?
  4. The money lender: Have you done your research to make sure it is a licensed and reputable lender?
  5. Your credit history: Do you have a decent credit score to be eligible for a loan?

What Should Happen Before And After Loan Approval

Now that you know some of the key moneylender rules let’s look at what’s involved in taking out a loan from a licensed money lender.

Before Loan Approval

First, make sure you’ve considered everything we’ve discussed so far. Once you’re confident that taking out a loan is your best option, it’s time to start shopping around.

Compare offers from different money lenders. Make sure to look at the interest rates, fees, loan limits, repayment terms, and any other conditions that might apply.

If you like a money lender’s offer, visit it in person before signing a contract to avoid scams. In fact, the government prevents licensed money lenders from giving out a loan without meeting the borrower in person.

So it’s your right to visit the money lender and discuss the loan agreement before signing anything.

Submit your documents for approval when you’re ready. The money lender will check your documents, and if everything is in order, it will give you the loan.

After Loan Approval

It’s natural to be excited after getting approved for a loan, but there are still a few things to keep in mind.

First, ensure you understand all the terms and conditions of the loan agreement before signing it. Read it carefully and ask the money lender to explain anything you’re unsure about.

Secondly, use the money wisely and only for the purpose you initially planned it for. If you do otherwise, you might ruin your financial health.

And finally, make sure you keep up with your repayments. You’ll be charged extra fees if you miss a payment or make a late payment. Not to mention, your credit score will suffer.

What If You Cannot Pay The Loan?

If you are unable to pay back the loan, a licensed money lender is entitled to:

  1. Charge late interest and fees
  2. Issue a demand letter
  3. Seize your asset (collateral) if it was a secured loan
  4. Take you to court for a trial

But a money lender isn’t allowed to engage in unlawful money extortion methods such as harassment, threats, or property vandalism. These are serious offences, and you can lodge a police report if they happen to you.

Therefore, reputable licensed money lenders would never resort to these methods.

However, if you’re struggling to repay your loan, there are a few things you can do.

First of all, talk to your money lender as soon as possible. It might be able to work out a new repayment plan with you.

If that’s not possible, you can approach the Moneylenders Credit Bureau or Credit Counselling Singapore for a consultation. These organisations can advise you on how to settle a licensed money lender’s loan and devise a suitable action plan.

For instance, they might suggest taking another loan to pay off the current one. Or they might help you re-negotiate with your current lender and reach a new repayment plan.

Worried about taking out a loan?

At Credit 21, we’re always here to help new borrowers. Let us help you understand the process and work out a plan that’s best for you.

Contact our experienced loan officers now or apply for a loan today.