Singaporeans are constantly in need of money to pay their medical bills, college fees, consolidate debts, or fund a wedding. No wonder, this country has a variety of services, willing to lend personal loans to people in need. Currently, Singapore has 158 licensed moneylenders who can lend money to people who desperately need a loan to pay for an emergency.
If you are planning to borrow from a licensed lender in Singapore, we recommend that you read this article. Here, you will find all the information you need to approach a lender for a personal loan confidently.
Before approaching a lender for a loan, it’s essential to assess your financial situation and loan requirements. Here are a few questions that will help you gauge your financial stability and determine the right loan type for you.
Personal loans given by moneylenders are unsecured. Hence, the borrower’s financial ability and integrity are critical to loan approval. To begin with, determine what amount you need and check your eligibility for the loan. Visit the Ministry of Law, Singapore website to know the maximum amount you can borrow.
Keep details and documents of your current credit score, income, and proof of employment handy. You will need documents, such as NRIC, computerized payslips, past CPF statements if any, and utility bills for residency proof. If you are a foreigner, you may be asked to produce your tenancy agreement, valid employment pass, bank statements, and employment letter.
By asking you to produce the documents as mentioned above, the lender is only trying to gauge your capability to repay the loan depending on your present-day earnings. Hence, the loan assessment is not based on your credit history. So, if your creditworthiness is poor, licensed lenders will offer a special loan package and work out a repayment schedule that will best suit you.
Make a checklist of the documents needed during the loan application process, improving your chances of getting a loan as quickly as possible.
Since licensed lenders are governed by the Ministry of Law, they are bound to abide by the regulations set by them. Hence, there is a limit on the amount of interest, late penalty, and other costs they can charge. For instance, a licensed lender cannot charge you a total fee of more than 10 percent of the principal amount. In case you make a late payment, the late fees also are capped at $60.
According to the new moneylender’s regulations, effective 1st October 2015, personal loans from licensed lenders are subject to the following –
Once you have your documents in place, it’s time to look for a suitable lender who can offer you a quick personal loan.
First things first, know how to spot an unauthorized moneylender. Go through the list of licensed lenders in Singapore and check the status of their license and the client reviews to avoid getting scammed.
Read why you should avoid borrowing from unlicensed moneylenders.
An authorized lender will never solicit loans via text messages or phone calls. They are bound to advertise their services using the following media. (Learn how to block text messages from illegal moneylenders)
Once you have signed the contract and your loan is approved, the obligation to pay the debt lies with you. At this point, the lender should share the actual principal amount of the loan with you. Licensed lenders are only allowed to deduct a loan approval fee, which is a maximum of 10 percent of the principal amount.
Make sure you have the below-mentioned documents and information with you.
Moneylenders lose large sums of money due to borrowers who default on their payment. Hence, most of the time, they outsource the unpleasant task of collecting debts to debt collection agencies who follow up for payments.
However, licensed lenders have to adhere to the code of ethics set by the Credit Collection Association of Singapore. Hence, they will never hire illegitimate debt collection agencies to harass borrowers for payment. This code of ethics prohibits them from using unlawful assembly, violence, intimidation, and harassment as a means to collect debts.
Also, licensed moneylenders are accredited by the Money Lenders’ Registrar, Singapore. Hence, they are obligated to adhere to the established lending guidelines, interest rates, and fees. For instance, as mentioned earlier, licensed moneylenders can charge a maximum interest of 4 percent per month, regardless of the borrower’s income and the nature of the loan. Even if you miss a payment, a licensed lender can charge you 4 percent per month for every month you repay late.
Once you have agreed to the loan repayment terms and conditions, it is critical to adhere to them and make regular payments. If you are unable to pay the money you have borrowed, talk to the lender and negotiate on the terms, asking for an extension or a refinancing plan. However, remember that this negotiation may attract additional fees.
Read about exactly what moneylenders can and cannot do to recover their debts from you.
If you are still unable to pay debts amounting to S$15 thousand, you may file for bankruptcy that bars lenders from suing you and freezes the accumulation of interests.
If you still need financial guidance or help, get in touch with any of the below-mentioned organizations.
Get in touch with Minlaw if you have an issue with moneylenders in Singapore. They can offer you useful information concerning the terms and conditions of taking a personal loan from lenders.
Website: https://rom.mlaw.gov.sg
It is a government organization that offers credit counseling to people in need of extra cash or financial help. They also provide information on debt management and help borrowers chart a debt repayment scheme.
Website: https://www.ccs.org.sg/
The CAS is the voice of all the licensed moneylenders in Singapore. You can approach them to access information about a lender. They work towards protecting the interests of the parties involved.
Website: https://www.moneylenders.sg
If you are affected by problem gambling, NCPG can help. They assist problem gamblers and their families by distributing information on problem gambling and gambling addiction and offering useful advice to them.
Website: www.ncpgambling.org
ComCare offers social assistance and schemes for low-income individuals and families, putting them on the path to self-reliance. If you need temporary financial support, you can approach them.
Website: https://www.msf.gov.sg/Comcare
What type of loan do you need?
Before approaching a lender for a loan, it’s essential to assess your financial situation and loan requirements. Here are a few questions that will help you gauge your financial stability and determine the right loan type for you.
- Why do you need a loan? Personal loans are small-amount loans designed to pay credit card debts, support a home remodeling project, or pay a clinic. The amount you need to borrow and your current income will determine how much cash the lender can offer you.
- What repayment terms suit you? Lenders may offer fixed or variable repayment terms. Look through the terms of the agreement and select the one that suits your budget.
- What’s your credit rating like? Though licensed lenders do not stress too much upon the borrower’s credit history, it’s wise to know your CBS credit score to assess your financial health. All Singaporeans can procure a credit report from the Credit Bureau of Singapore (CBS) for a nominal fee of S$6. Visit the Credit Bureau Singapore website for more details.
What documents should you keep handy?
Personal loans given by moneylenders are unsecured. Hence, the borrower’s financial ability and integrity are critical to loan approval. To begin with, determine what amount you need and check your eligibility for the loan. Visit the Ministry of Law, Singapore website to know the maximum amount you can borrow.
Keep details and documents of your current credit score, income, and proof of employment handy. You will need documents, such as NRIC, computerized payslips, past CPF statements if any, and utility bills for residency proof. If you are a foreigner, you may be asked to produce your tenancy agreement, valid employment pass, bank statements, and employment letter.
By asking you to produce the documents as mentioned above, the lender is only trying to gauge your capability to repay the loan depending on your present-day earnings. Hence, the loan assessment is not based on your credit history. So, if your creditworthiness is poor, licensed lenders will offer a special loan package and work out a repayment schedule that will best suit you.
Make a checklist of the documents needed during the loan application process, improving your chances of getting a loan as quickly as possible.
What are the total costs involved?
Since licensed lenders are governed by the Ministry of Law, they are bound to abide by the regulations set by them. Hence, there is a limit on the amount of interest, late penalty, and other costs they can charge. For instance, a licensed lender cannot charge you a total fee of more than 10 percent of the principal amount. In case you make a late payment, the late fees also are capped at $60.
According to the new moneylender’s regulations, effective 1st October 2015, personal loans from licensed lenders are subject to the following –
- Interest not exceeding 4 percent per month,
- An administrative fee of not more than 10 percent of the principal when the loan is granted
- A late fee of not more than $60 per month
- The total cost of taking a personal loan from a lender (interest, late interest, legal, administrative fees, and other charges) cannot exceed the principal loan amount.
How can you tell whether the moneylender is authorized to lend?
- Business or consumer directories either through print or digital media;
- Websites belonging to the licensee
- Advertisements placed within or on the exterior of the approved place of business. For instance, on the side of their office wall, gate, or window.
What should you do after the loan is approved?
Once you have signed the contract and your loan is approved, the obligation to pay the debt lies with you. At this point, the lender should share the actual principal amount of the loan with you. Licensed lenders are only allowed to deduct a loan approval fee, which is a maximum of 10 percent of the principal amount.
Make sure you have the below-mentioned documents and information with you.
- A copy of the contract
- A receipt of every payment you make
- A statement of account for all the payments made and the balance amount
- Copies of all statements of accounts, receipts of payment, and the other documents
What can debt collectors legally do if you are unable to settle your debt?
Moneylenders lose large sums of money due to borrowers who default on their payment. Hence, most of the time, they outsource the unpleasant task of collecting debts to debt collection agencies who follow up for payments.
However, licensed lenders have to adhere to the code of ethics set by the Credit Collection Association of Singapore. Hence, they will never hire illegitimate debt collection agencies to harass borrowers for payment. This code of ethics prohibits them from using unlawful assembly, violence, intimidation, and harassment as a means to collect debts.
Also, licensed moneylenders are accredited by the Money Lenders’ Registrar, Singapore. Hence, they are obligated to adhere to the established lending guidelines, interest rates, and fees. For instance, as mentioned earlier, licensed moneylenders can charge a maximum interest of 4 percent per month, regardless of the borrower’s income and the nature of the loan. Even if you miss a payment, a licensed lender can charge you 4 percent per month for every month you repay late.
Once you have agreed to the loan repayment terms and conditions, it is critical to adhere to them and make regular payments. If you are unable to pay the money you have borrowed, talk to the lender and negotiate on the terms, asking for an extension or a refinancing plan. However, remember that this negotiation may attract additional fees.
Read about exactly what moneylenders can and cannot do to recover their debts from you.
If you are still unable to pay debts amounting to S$15 thousand, you may file for bankruptcy that bars lenders from suing you and freezes the accumulation of interests.
What can you do if you run into a problem?
If you still need financial guidance or help, get in touch with any of the below-mentioned organizations.
Registry of Moneylenders

Credit Counselling Singapore

Credit Association of Singapore (Moneylender’s Association of Singapore)

National Council on Problem Gambling

ComCare

Summing up
Licensed moneylenders are the fastest and the most reliable sources of personal loans in Singapore today. However, knowing what to expect when approaching a lender can help you make informed financial decisions in your favor. We are sure the information shared in this post will make your personal loan application process smooth, allowing you to gain the financial independence you are aiming for.
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