Borrowing from Licensed Money Lenders in Singapore – 5 Advice to Follow

It is always hard to find a good and ethical licensed money lender in Singapore. Loan offers may vary in terms of interest rates and repayment periods. Check out how you could get the best deals from them.

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Money lenders are nothing new in Singapore. As of 1 January 2020, there are 156 licensed money lenders in Singapore alone, that’s 1 money lender for every 36,000 Singaporeans! Money lenders provide loans to people with relatively bad credit and help them through hard times albeit with slightly higher interest rates. This is due to the higher risks involved in lending money to Singaporeans without a positive credit history.

In Singapore, borrowers are often at a disadvantaged position and therefore may be taken advantaged of by money lenders and other financial institutions. How do you find the best licensed money lender in Singapore? Let’s find out with the 10 tips below.

1. Licensed vs Illegal Money Lenders

It is very important to stress that there is a HUGE difference between a licensed money lender and illegal loan sharks. Licensed money lenders operate under the full supervision of the Ministry of Law and adheres to all the rules and regulations they set up. For example, they have restrictions on advertising and could only charge up to 4% interest per month and

*Any work pass holders who borrow from unlicensed or illegal money lenders in Singapore would be banned from future employment.

How do you differentiate licensed money lenders versus the illegal ones?

The best way to do it is to check the list of licensed money lenders listed on the Ministry of Law’s website. Some licensed money lenders who just recently got approved may not be on the list yet. With this, you could call the Ministry of Law at 1800–2255–529 to authenticate.

However, it would sometimes be hard to check the name one by one. Instead, you could follow some guidelines as follows.

  • A licensed money lender is required to ask you to physically fill up an application form at their official business premise before offering you a loan. If they give you cash in person (not an office) or does not provide official application forms, they are most certainly illegal money lenders. This is also true if they keep changing their address and contact information.
  • If a lender keeps your official personal documents like your driver’s license or passport, they are unlicensed money lenders.
  • Lenders are not allowed to ask for your SingPass ID and/or password.
  • Licensed money lenders are LEGALLY REQUIRED TO explain the terms and conditions of the loan contract clearly before offering you a loan. They would have to tell you when your loan payment is due and how much, which would be stated in the contract.
  • Legal lenders have very restricted advertising channels. If they approach you with a flyer asking you to take a loan from them, they are certainly unlicensed money lenders or legal ones who breached the law. As such, you have to report them to the Registry of Moneylenders.
  • Money lenders would rarely exhibit rude, abusive or even threatening behavior. If that is the case, be it a licensed money lender or not, you should report it to the Registry of Moneylenders.
  • There is a maximum cap on the amount that could be loaned to borrowers as set by the Ministry of Law. The amount are as follows.

i) Annual income < $20,000 = max loan amount $3,000

ii) Annual income > $20,000 = 6 times monthly income

iii) For foreigner income < 10,000 = max loan amount $500

*If they do not follow this rule, they are illegal loan sharks

As required by law, money lenders can only charge the following fees

i) Fee < $60 per month for late repayment

ii) Fee < 10% of principal of loan granted

iii) Any legal costs ordered by court to recover defaulted loan

2. Research and Shortlist

Always conduct prior research on the reputation and history of a licensed money lender before applying from one. Lending from the wrong lender would cost you very much

You could do so by checking their reviews on Google Maps. As a general guide, anything below a 4-star rating is, on usual standards, not a good licensed money lender. Try to look for those with at least 100 Google Reviews. It would prove that the money lender is established and have served a considerable number of customers. You could also check on their comments on online forums and online directories!

Furthermore, you could ask around your friends who had borrowed from any licensed money lenders before. Ask them about the customer service, the loan flexibility and also if there are any hidden charges. If you don’t have such friends, you could actually contact the profiles on the Google Reviews as some are likely to help. They may provide you with valuable insights about the quality of the lenders.

Check their office location. Find those that are accessible by public transport if that would be more convenient for you. Also, do note their opening hours as you do not want to waste time making your way to their office to find out that they are closed for the day.

With your research done, you should shortlist at least 3 licensed money lenders based on

  • Google Reviews
  • Reputation among friends, if any
  • Location
  • Interest rates

3. Always call and make an appointment

After shortlisting three licensed money lenders, call each of them to find out their interest rates and repayment periods based on the loan amount you are seeking for. If you think that calling three is not enough, just call and enquire as many as you like. However, do note that you should not disclose your SingPass ID and password to the lenders.

You have to make sure 3 things:

  • Make sure they offer an interest rate and repayment scheme that you are comfortable with.
  • Make sure they could approve your loan based on your current financial status. There is no point going there if they could not approve your loan at the first place.
  • Ask about all the relevant fees charged and if there is an early repayment penalty. This is especially important if you are taking a long-term loan.
  • Make an appointment with them so that you will be served once you arrive.

Always ensure the money lender issues a receipt to you each time you make a payment for your loan. Check and double check the name, date and amount paid. You need to have black and white evidence. This is because some licensed money lender may be unethical and it would be best for you to avoid any conflicts with them.

You should also receive a statement of your account which states the outstanding for all your loans with the licensed money lender at least once at the month of January and July. This is the correct procedure for all licensed money lenders in Singapore. You would also have to check the correctness of these statements.

Please keep all the receipts of payments, loan contract and statement of accounts with you as evidence. You may need them one day as proof.

5. Consolidate your existing loans

To get a better deal from the licensed money lenders, it would be wise to consolidate your loans. A consolidation loan allows you to combine all your different existing loans into one single loan. For example, if you currently owe $1,000 in credit cards and $2,000 in personal loan from a bank, you could combine them into a single $3,000 loan.

Taking a consolidation loan allows you to get lower interest rates (you have to shop / compare different lenders) and longer repayment periods. This would allow you to have a better credit rating and subsequently get more favorable loan terms from licensed money lenders.

Imagine this scenario:

Situation 1: You have loans of $3,000 and $5,000 from banks and your monthly repayment is $700

Situation 2: You consolidate your loans into a $8,000 loan and extend your repayment period, making $500 repayments per month instead.

In this case, licensed money lenders would certainly offer more favorable loan terms for the person in situation 2, right?

Nonetheless, you would also have to shop around to find the best loan consolidation lenders in Singapore. You could also get consolidation loans from licensed money lenders as well.

Always speak to the consultants and ask them to for a better deal be it extending your repayment periods or lowering the interest rates. You may be surprised that many are willing to do so. Even a 0.05% reduction in interest rates would make a difference especially if you are taking a long-term loan.


Getting a loan from licensed money lenders is never easy as you are most certainly in a disadvantaged position where they could dictate the terms and conditions of the loan. This is especially true when you are in urgent need of cash. This is why we prepared a list of advice for you. Just follow the tips and you would certainly get a better deal for your loans. They could make a huge difference to your life.

At Singa Credit, we practice the highest ethical standards and genuinely want to help people deal with their financial difficulties. As such, you could have a peace of mind with us. Contact us at to apply for a loan.