What Are Licensed Money Lenders And How Much Can I Loan?

Written by Shannon Wong on August 15, 2022

No matter how prepared you are, there will be unexpected financial situations. You may need extra cash fast and are wondering where to borrow the money. 

Licensed money lenders in Singapore can help you get the money you need to sort out your financial crisis.

In this post, we look at everything you need to know before you can borrow from licensed money lenders. We will advise you on what you should look for before you get the money you need from a licensed lender.

Before you borrow, you must know whether a lender is licensed or not, how much you can borrow, and the interest rates you can expect. 

 What Is A Licensed Money Lender?

A money lender is a company that offers borrowers personal loans at a higher interest rate. 

Licensed money lenders are the best alternative when you need emergency cash. In Singapore, legitimate money lenders are licensed and regulated by the Registry of Moneylenders, which is under the Ministry of Law.

Money lenders are limited in the amount they can lend, the interest rate they can charge, and the fees they can charge. 

The Moneylenders Act and rules in Singapore protect the borrower by stating the maximum you can get from the lender, interest, and charges.

Licensed lenders also have to follow certain regulations when advertising and collecting any money they lend. They are not allowed to harass you when you don’t repay your debts on time. It is, however, important to pay your debts as per schedule.

Before you borrow the money from a licensed lender, consider the following:

  • The interest rate and fees you will be charged
  • Your ability to repay the loan
  • The terms and conditions of the loan 
  • Your legal duty of repaying the loan
  • Whether the money will serve the intended purpose 

Is It Safe To Borrow From Licensed Money Lenders?

It’s safe to borrow from licensed money lenders as they are regulated by the Ministry of Law. 

Make sure your money lender of choice appears in the database of the Ministry of Law. Licensed money lenders are required to follow the below regulations.

  • The money they can lend is capped depending on the income of the borrower. 
  • They can charge an interest of no more than 4% per month. The interest applies to all borrowers regardless of the income. 
  • In the case of a pending amount, the interest charged is on the balance of the pending and not on the original principle.
  • The money lender can’t charge interest on amounts that are not paid but not due. 
  • In case of late payment, interest can only be charged on amounts that are due. 
  • Licensed money lenders can impose a fee of $60 for late payments. 
  • They can impose a fee not exceeding 10% of the principal amount when they grant a loan. 
  • The lender can impose legal costs ordered by the court. 
  • The total charges the money lender imposes can’t exceed the principal amount. 
  • Money lenders are required to be mindful when they are collecting their money. They are not allowed to harass or use abusive language toward the borrower.
  • The lender is not allowed to retain your NRIC or any other personal documents. 
  • Licensed money lenders must ensure the borrower understands the lending terms.
  • They should not grant a loan without carrying out due diligence. 
  • Licensed money lenders are only to advertise through business directories, print or online media, their websites, or advertisement on their premises. They are not allowed to issue flyers or send SMS or emails. 

In case the licensed money lender does not adhere to any of the above regulations, you can report them to the Registry of Moneylenders. 

You will be required to provide information on the lender, such as its business name, license, and contact number.

How Much Can I Borrow For A Personal Loan?

Licensed money lenders will offer you loans depending on your income and whether you have collateral. If you are looking for a secured loan you can get any amount. 

However, unsecured loans are capped by the ministry.

This is the amount you can expect to borrow from a licensed money lender.

The annual income of the borrowerSingapore citizens and permanent residentsForeigners residing in Singapore
Income less than $10,000$ 3000$ 500
Income between $10,000 to $20,000$ 3,000$ 3000
Above $20,0006x the monthly income6x the monthly income


Before you visit a money lender prepare the following documents: 

  • NRIC or passport as proof of identity
  • Bank statements or utility bills
  • CPF statements
  • Income tax statements

The money lender is obliged to inform the following

  • The interest rate
  • Late interest charge
  • Any other fees
  • Amount you should repay

Confirm whether you have received the correct amount once you have completed signing the documents. 

According to the above table, licensed money lenders offer loans that are ideal for emergencies such as urgent fees, and sudden car breakdown repairs, among others.

After you receive the money, make sure you confirm the amount received. Keep a copy of the loan contract and make sure you stay on schedule and repay the loan diligently.

In the event of financial difficulties, consider talking to the money lender and agree on how to make the pending payments. You can start paying the loan in installments. Keep records of every payment you make.


More on this Topic: 

FAQs When Borrowing From A Licensed Moneylender In Singapore

What Are Monthly Installment loans In Singapore?

5 Reasons Why Your Personal Loan Application Was Rejected


7 Uses Of A Personal Loan

A personal loan is borrowed from a money lender or financial institution to be repaid in installments. 

If you need cash quickly, then a personal loan from a money lender is an option. Here are the main uses of a personal loan:

1. Consolidation Of Debts

One of the most common reasons why people opt for a personal loan is to consolidate debt. If you have multiple high-interest debts, you can opt for a personal loan to pay them off. Debt consolidation makes it easier to manage debts.

Using a personal loan, you can pay off other debts, and you are left with a single debt that has low interest and low monthly installments for easier management.

Analyse all the debts and choose a personal loan that will help you repay all of them. Choose a personal loan that offers you lower interest and a manageable monthly installment.

2. Unexpected Expenses

If you need money to sort out an emergency, then a personal loan is the best option. Money lenders disburse the money within 24 to 48 hours after signing the documents. 

Look for licensed money lenders near you and get the money you need.

Personal loans are disbursed quickly, and they can help you plan for emergencies. For instance, if you need money for medical bills, paying for a funeral for a loved one, or repairing your vehicle if it develops sudden mechanical issues.

Even though you may need the money urgently, make sure you confirm the terms of the payment. Make sure you can pay the loan.

3. Major Purchases

Personal loans can also help you cover large purchases. If you want to buy a new dryer or replace the engine in your car, a personal loan can be a good option.

If you need money to cover large but necessary purchases, take a personal loan. Although you will pay the interest and other fees, you will save time and money. You don’t need to use other expensive alternatives when you can opt for a loan.

4. Making Home Improvements

You may need to upgrade your home or make necessary home repairs but do not have the money. You can take a personal loan for the upgrade or repairs. It’s easier to apply for a personal loan instead of opting for a home equity loan.

The personal loan will help you improve your home or make the repairs you need. For instance, if your house requires a new roof, opt for a loan.

5. Purchase A Vehicle

A personal loan is an option for people who want to buy a vehicle without the need to use their savings or collateral. Applying for a personal loan takes a short time, and you can have your car in no time.

6. Moving Expenses

Moving to a new location can save you money on rent or transport. A new job may necessitate relocation, as may the need for a larger house for your family. Unfortunately, moving can be expensive, especially if it’s over a long distance.

When you need to relocate and you don’t have the money, take a personal loan. It’s easy to apply for the loan, and disbursement takes a few days. 

7. Finance Your Big Day

A personal loan will help you cater for the big events in your life such as a wedding. If you are short on your wedding budget, consider taking out a personal loan. You will be able to clear your expenses.

Before you apply for a personal loan, you need to make sure you know how much you need. Don’t overspend the money you have borrowed. Stick to your budget.

So there you have it — everything you need to know about licensed money lenders in Singapore. 

Remember to always do your research and be sure to compare different lenders before deciding. Last but not least, make sure you are fully aware of the terms and conditions of your loan agreement before signing on the dotted line.

Apply for a personal loan with 1AP Capital or talk to our loan advisors today. 

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