How To Check And Identify A Singapore Licensed Money Lender

LoansPersonal Finance

How To Check And Identify A Singapore Licensed Money Lender

August 3, 2022

If you need a personal loan, be sure to only choose a licensed money lender. There are many unlicensed money lenders in Singapore that are looking to take advantage of people in need.

This blog post will offer tips on how to check if a money lender is licensed and what to take note of during the loan approval process.

Illegal Money Lenders And Loan Sharks

To check if a money lender is licensed, look for the Ministry of Law’s list of licensed money lenders in Singapore.

Warning: Many illegal or unlicensed money lenders or loan sharks set up scam websites that impersonate that of a licensed money lender to fool unsuspecting victims.

Be sure to check the phone number of a licensed money lender against the number that is listed on the website. The licensed money lender must also have a physical address.

If the phone number is different or if there is no physical address, you may have encountered an illegal money lender or loan shark. Here are other red flags to take note of:

  • Unsolicited calls, emails or SMSes
  • Calls, SMSes or emails that claim your loan has been approved

Remember that licensed money lenders are not allowed to make unsolicited calls, or send emails and SMSes that advertise their services.

What Must You Do Before Borrowing From a Licensed Money Lender In Singapore?

Before you borrow from a legal money lender, you must understand the legal process and your rights. Here are some of the things you should do before borrowing:

  • Look up legal money lenders in Singapore: Choose a licensed and reputable lender.
  • Understand the terms of the loan: Make sure you are clear about the interest rate, repayment schedule, and other fees or charges. Read the fine print carefully.
  • Compare offers from different lenders: Shop around to get the best interest rates.
  • Ask questions: It is crucial to clarify all your doubts before you commit to a loan.
  • Read the contract carefully before signing: Make sure you understand all the terms and conditions.

Being aware of your rights helps to ensure that borrowing from a licensed money lender is a positive experience.

How Much Can You Borrow From a Licensed Money Lender?

In Singapore, legal money lenders are regulated by the Moneylenders Act. The act provides guidelines on how much money can be lent, and the fees and interest charged.

According to the act, licensed money lenders can lend up to $3,000 to individual borrowers. However, this limit is increased to $6,000 for those who are self-employed or earn a fixed income.

Licensed money lenders must also provide clear information on their fees and interest rates before lending any money because it helps to ensure that borrowers are fully informed of their loan terms.

What Are the Interest Rates Licensed Money Lenders Can Charge?

Interest rates play an essential role in licensed money lending. In Singapore, money lenders can charge a maximum interest rate of 4% per month.

For instance, if you borrow $100 from a money lender, you will have to pay back $104 at the end of the month.

However, it is not the only fee that you will have to pay. Money lenders can also charge a late payment fee of up to $60 if you do not repay your loan on time. In addition, they can charge a processing fee of up to 10% of the loan amount.

As a result, it is vital to ensure you understand all the fees involved before taking out a loan from a licensed money lender. Interest rates may seem small, but they can quickly add up and make it challenging to repay your loan.

Who Is Eligible For A Loan?

To be eligible for a personal loan from a legal money lender in Singapore, you must:

  • Be at least 18 years old
  • Be employed or have a regular source of income
  • Have a valid Singaporean or PR status

If you meet these criteria, you can apply for a personal loan from a licensed money lender in Singapore. The amount you are eligible to borrow will depend on your income and credit history.

It is mandatory to meet the licensed money lender in person at its registered office address for a face-to-face identification before your loan is approved.

Documents You Need Before Visiting A Licensed Money Lender

When you need to borrow money from a licensed money lender in Singapore, there are certain documents that you will need to prepare. They include:

  • Your NRIC or passport as proof of identity
  • Your latest payslip or CPF statement
  • A copy of your bank statement
  • Your latest Income Tax notice of assessment if you are self-employed

How Will You Know It Is Not A Loan Scam?

A loan scam is an illegal operation that promises loans or financial assistance in exchange for personal information or upfront payments.

On the other hand, licensed money lenders are registered businesses that the government regulates.

There are many loan scams in Singapore that target unsuspecting victims. Some common signs of a loan scam are if the money lender:

  • Is not registered with the Registry of Moneylenders and does not follow the advertising rules set by the Singapore Government
  • Does not have a valid money lending license
  • Approves your loan over the phone or via SMS without the mandatory face-to-face meet-up at its office premises
  • Does not explain the terms and conditions of the loan clearly
  • Asks for your Singpass ID or password
  • Retains your NRIC or personal document (e.g. passport, employment pass)
  • Provides unclear details about the loan contract
  • Requests for a deposit before approving the loan
  • Charges exorbitant interest rates or fees
  • Asks you to sign on a blank or incomplete loan contract
  • Does not give you a copy of the loan contract or statement of account after approving the loan
  • Withholds any part of the loan amount without a valid reason
  • Displays abusive or threatening behaviour

What To Look out For When Dealing With A Licensed Money Lender

A licensed money lender:

  • Must give legitimate information about its services
  • Must explain its interest rates and fees to borrowers
  • Has to make the correct statements about the borrower’s debt
  • Has no right to threaten or use force against a borrower
  • Should not harass a borrower for repayment.
  • Is not allowed to impose a higher monthly interest rate than 4% on loans
  • Is not allowed to charge an administrative fee that is higher than 10% of the loan amount
  • Must not charge additional late payments or legal and administrative fees
  • Cannot charge more than $60 for late fees

If a money lender acts in a manner that is contrary to these rules, you could be dealing with a loan shark.

Make sure you also read the contract carefully before signing it because it will help you understand the terms and conditions of the loan and protect you from any hidden fees or charges.

Finally, remember that licensed money lenders are required by law to follow specific regulations, so if you have any concerns, you can contact the Moneylenders Association of Singapore for more information.

What Happens After My Loan is Approved?

It is essential to take some time to understand the terms of your loan and make sure you are comfortable with them. If you have any questions, ask the licensed money lender to clarify your doubts.

Once you are ready to proceed, you will need to sign the loan agreement and provide any collateral that may be required.

The contract will state the terms of your loan, including the interest rate, repayment date, and any other charges that may be applicable.

Once the paperwork is complete, the money lender will disburse the funds to you, and you will be responsible for repaying the loan according to the terms of the agreement.

If you make your payments on time and in full, you can expect a favourable report from the money lender, which can help improve your credit score.

Always ensure you have the following documents on hand:

  • A copy of the loan contract
  • Receipts for all your loan repayments
  • Statement of account for all your loans
  • Copies of receipts, accounts and relevant documents


Licensed money lenders are a viable option to borrow money in Singapore. However, it is essential to be aware of the risks involved when borrowing from a licensed money lender.

If you consider taking out a loan from a licensed money lender, ensure you understand the loan terms and the fees involved.

You should also be aware of the signs of a loan scam to avoid becoming a victim of one.

Talk to the experienced consultants at Credit Thirty3 to find out more about your options, or apply here.