In times of financial difficulty, especially during emergencies, you might need to borrow money quickly. If you lack sufficient savings or liquid funds, you could consider borrowing from friends or family with a simple IOU or opt for a personal loan from a licensed moneylender—the focus of this guide.
Who Are Licensed Moneylenders?
Under the Moneylenders Act, only those with a valid license or an official exemption can legally offer moneylending services.
- Excluded moneylenders: Those allowed to lend under other laws (e.g. licensed pawnbrokers).
- Exempt moneylenders: Individuals or businesses granted special exemption by the authorities.
You can verify if a moneylender is licensed by checking the Ministry of Law’s official list. Avoid lenders who solicit loans via SMS or calls, as this is not permitted.
Prohibited Practices by Licensed Moneylenders
Even licensed moneylenders are not allowed to:
- Use threatening or abusive language
- Request your SingPass ID or password
- Keep your NRIC, ATM card, or passport
- Ask you to sign blank/incomplete contracts
- Approve loans without proper documentation
- Withhold part of your loan without reason
Report such practices to the Registry of Moneylenders.
Before Taking a Loan
Before borrowing, assess whether you can comply with the loan’s terms, including:
- Timely repayments
- Interest and possible late fees
If you miss payments, late interest (up to 4% per month) may be charged on the overdue amount.
Loan Costs & Limits
Licensed moneylenders may charge:
- Interest: Up to 4% per month on the remaining loan balance
- Late payment interest: Up to 4% on overdue amounts
- Approval fee: Up to 10% of the principal
- Late payment fee: Up to $60 per month
Total charges (interest + fees) cannot exceed the loan principal.
Example: If you borrow $10,000, the total cost (including all charges) cannot exceed $10,000.
Watch out for caveats on property—defaulting could allow the lender to take proceeds from its sale.
Borrower Requirements
To apply, submit a completed application with:
- Full personal details
- Proof of income (last 3 months)
- Supporting documents (e.g., payslips, tax statements)
Foreigners must also submit documents like an employment pass, passport, and tenancy agreement.
Loan Limits (for Unsecured Loans)
| Annual Income | Citizens/PRs | Foreigners |
| < $10,000 | Up to $3,000 | Up to $500 |
| $10,000 – <$20,000 | Up to $3,000 | Up to $3,000 |
| ≥ $20,000 | Up to 6x monthly income | Up to 6x monthly income |
There’s no cap on secured loans, where collateral is involved.
Before Loan Disbursement
Licensed moneylenders must provide a written breakdown of:
- Interest rates
- Fees
- Instalment details (for term loans)
- A cautionary statement about abusive conduct and complaint avenues
After the Loan is Granted
You should receive:
- The principal amount minus the approval fee
- A copy of the loan agreement
- Receipts for all payments
- Biannual account statements
Keep all records for future reference.
If You Can’t Repay the Loan
You may:
- Negotiate with the lender for an extension or refinancing (may incur fees)
- Face legal action if repayment fails, especially with secured loans
If debts exceed $15,000, consider bankruptcy to freeze interest accumulation.
If debts are under $100,000, the Debt Repayment Scheme (DRS) offers structured repayment with court protection from legal action.
What to Do if You’re Harassed
If a licensed moneylender harasses or threatens you:
- Contact the Registry of Moneylenders at 1800-2255-529 or submit an online complaint
- File a police report if necessary
Include details such as the lender’s name, license number, and contact info.
Final Note
Borrowing from a moneylender is a legal obligation. Make sure to:
- Assess your financial capacity
- Borrow only from licensed moneylenders
- Understand all terms and conditions
Act responsibly to avoid worsening your financial situation.