What If You Are Unable To Pay A Money Lender In Singapore?

Written by Shannon Wong on March 11, 2024

Licensed money lenders give loans quickly and without stringent criteria, which may cause borrowers to borrow frequently. If you aren’t a disciplined borrower, you might find yourself with multiple and burdening debts.

Defaulting on a loan affects your credit history and lowers your credit rating, which affects future borrowings and may result in your applications being rejected.

If your loan is secured, your assets, which could include your home, may be seized to pay the debt.

If you find yourself in this situation, don’t give up hope. If you are unable to pay money lender Singapore, there are options available, including a debt repayment plan.

In this article, we will cover various options for settling licensed money lender debts, including Credit Counselling Singapore.

What Licensed Money Lenders Can And Can’t Do

The Moneylenders Act governs licensed money lenders and protects borrowers by limiting licensed money lender interest rate and fees. It also outlines the procedure for resolving disputes.

When borrowing from licensed money lenders in Singapore, it is critical to understand your rights.

If you are unable to pay money lender Singapore, the first thing you should do is contact your money lender. Licensed money lenders are frequently willing to work with you to devise a repayment plan.

Many people, unfortunately, are unaware of what these money lenders can and cannot do. This can cause issues later on, especially if you are unable to repay the loan.

If your money lender is unwilling to offer you a mutually acceptable solution and resorts to doing the following, you have the right to file a complaint with the police and Registry of Moneylenders:

  • Harm or injure you or your family
  • Destroy or damage your personal property
  • Stalking you wherever you go
  • Unlawfully gathering outside your home or workplace

After receiving your complaint, the Registry of Moneylenders will review, investigate and take appropriate action if deemed necessary. Actions applicable include ordering the money lender to stop harassing you or revoke their operating license if its actions were criminal in nature.

However, in the same way borrowers are protected, licensed money lenders in Singapore also have a legal recourse to collect their money. They can collect an outstanding debt from you by initiating some actions.

They may contact you by phone and text at times that are reasonable or send you a demand letter by mail.

If they don’t hear from you, they may visit your home or come to your workplace to deliver a letter of demand. If these actions don’t work, they will bring a lawsuit against you.

Options To Take If You Are Unable To Pay A Money Lender

When you are unable to pay money lender Singapore either entirely or partially due to a cash crunch, there are a few options you can take.

Here are the two most common options on how to settle licensed money lender.


The first option is to try and negotiate with the lender. Even though it may be difficult, it is worth trying, including working out a new repayment plan with the lender.

Depending on your circumstances, you can try to negotiate for the extension of the loan period with your money lender.

However, restructuring a term loan will attract a fee that you must pay from your pocket.

It is also advisable to do this before the next loan installment is due to avoid an additional late installment payment penalty.

Debt Consolidation

For this money lender debt repayment plan, all your outstanding unsecured loans such as credit cards and some types of unsecured loans are consolidated into a single personal loan with a financial institution.

Licensed money lenders or banks offer debt consolidation loans.

Debt consolidation is a better option when you have many debts you are repaying to either different lenders. In essence, you are putting all the unsecured loans into one loan with a single installment.

The easiest way is to obtain a personal loan from a money lender to pay out all other loans. The loan tenure for the consolidated loan can be longer to reduce the installment further.

The objective is to have a new and affordable installment that is much lower than your earlier total repayments.

However, it’s good to note that the loan may be costlier due to the increased interest-earning period caused by the longer tenure.

Bankruptcy Application

Filing for bankruptcy is another option if negotiations don’t work and you still have challenges coming up with a mutually agreeable solution with your lender.

However, a bankruptcy application is only accepted if your obligations total at least $15,000. This option prevents any lender from taking recovery action against you.

It should be the last result if you are unable to pay back the money you owe, as it can ruin your credit for seven years.

Hence, before taking this route, it would be a good idea to consider other viable options.

How Credit Counselling Singapore Can Help

If you are struggling to repay your loans, Credit Counselling Singapore (CCS) can help you develop a practical debt repayment plan.

CCS is a non-profit institution that offers free financial counselling through social service organisations to help heavily indebted individuals negotiate with banks and licensed money lenders.

The Ministry of Law has listed these social service agencies that may be able to assist you with debt issues by negotiating a repayment plan. The list gets updated from time to time on the website.

Name of AgencyAddress/ Contact Details
Adullam Life Counselling151 Chin Swee Road #08-04 Manhattan House Singapore 169876
Tel no.: 9423 8832
E-mail: [email protected]
Association of Muslim Professionals (AMP)1 Pasir Ris Drive 4 #05-11 Singapore 519457
Tel no.: 6416 3960
E-mail: [email protected]
Arise2Care Community ServicesNo. 5 Harper Road #02-01A Singapore 369673
Tel no.: 6909 0628
Email: [email protected]
Blessed Grace Social Services16 Arumugam Road, #04-02B Block D, LTC Building Singapore 409961
Tel no.: 8428 6377
Email: [email protected]
Credit Counselling Singapore (only for bank loans)51 Cuppage Road, #07-06, Singapore 229469
Tel no: 6225 5227
Email: [email protected]
One Hope Centre8 New Industrial Road #04-04B LHK 3 Building Singapore 536200
Tel no.: 6547 1011
Email: [email protected]
Silver Lining Community Services(East) 11 Playfair Road Singapore, (West) Jurong Spring CC, 8 Jurong West St 52 Singapore 649296
Tel no.: 6749 0400
E-mail: [email protected]

Source: Ministry of Law

CCS can assist you in negotiating with your creditors in order to pay off your debts in a more affordable and manageable manner. This entails examining your income, expenses, and current financial commitments.

It then negotiates with your creditors on your behalf in order to reach an agreement that is acceptable to both parties. However, after requesting an appointment for counselling, you must attend a mandatory Debt Management Info Talk.

Can The Registry Of Moneylenders Help You Negotiate With The Money Lender?

To protect borrowers from unfair lending practices, the Singapore government enacted the Moneylenders Act and Rules, which is a set of legal guidelines for money lenders.

The Act, which serves as the foundation of legislation governing money lenders, was enacted to protect borrowers from deceptive lenders. It explains the workings, interest rates, potential fees, and procedures that lenders must follow.

However, because lending constitutes a private contract between you and the money lender, the Registry of Moneylenders cannot assist you in negotiating your loans with the money lenders.

Other Help Avenues

Other than taking a loan consolidation plan, extension of loan tenure or getting help from CCS, there are other avenues available to sort your current debt crisis. 

Debt Repayment Scheme

The Debt Repayment Scheme (DRS) is a government programme that allows you to consolidate all of your outstanding debts into a single facility with an agreed-upon repayment period and instalment schedule.

The total of the unsecured obligations and the loan amount, however, cannot exceed $150,000.

Also, keep in mind that the DRS repayment plan has a maximum term of five years. Furthermore, your income and expenses are used to calculate your affordable monthly payments.

Following that, the DRS prohibits any legal money lender in Singapore for unsecured loans from taking legal action against you unless the court grants permission.

Eligibility Criteria

To be eligible for the DRS, you must first file for bankruptcy with the court. If your bank or money lender has already filed for bankruptcy, the court will refer you to the Insolvency Office for the Official Assignee to determine your eligibility.

Furthermore, to qualify for Debt Repayment Scheme, you must meet the below criteria:

  • Your total debts are less than $150,000
  • You have a job that pays well and receives a steady salary
  • You haven’t filed for bankruptcy in the past five years
  • In the past five years, you haven’t engaged in the DRS

Home Equity Loan

If you have home financing and you have repaid the loan substantially, you may request your financier to borrow cash against it and repay all other debts.

There are benefits and risks of using a home equity loan to repay your debts. Home equity loans typically have lower interest rates. On the flip side, if you don’t repay the loan, though, you might lose your home.

There Is Always A Way Out Of Debt

While licensed money lenders have a right to demand payment if you are unable to pay money lender Singapore, they also have a duty to provide you with an alternative payment solution.

Use of force and harassment is otherwise illegal under the Moneylenders Act.

If you have a hard time honouring your monthly loan payments on time, it’s okay as long as you find a way to resolve it.

Otherwise, the situation can get worse between you and your lender and may complicate future loan applications.

Approaching your money lender is one way of coming up with a new repayment plan, including consolidating the debts by taking a personal loan or a home equity loan. 

If you are having extreme difficulty repaying your debts, don’t be afraid to seek assistance from DRS and CCS. If they determine that you are a good fit for their repayment plans, they will offer you an affordable monthly payment plan with a fixed interest rate.

Need a solution to easing your debt payments in line with your income? Visit licensed money lender 1AP Capital and apply for a personal loan to consolidate your debts.

We will offer affordable repayment terms and help you pay off your outstanding debts.

Call us now or apply for a loan today.

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