Borrowing From Online Licensed Money Lenders in Singapore

If you’re considering a loan, you might be wondering: Are licensed money lenders in Singapore a safe option? Also, will they come after me or my family members if I fail to repay the loan I’ve taken out?

Additionally, how do I know if an online money lender in Singapore I’m researching is a legal business? For those of you who might be unfamiliar with licensed money lenders in Singapore and how they work, you’ve come to the right place.

This handy guide contains the answers to a host of frequently asked questions, ensuring that you are equipped with the knowledge to find the most reliable money lenders in Singapore.

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Table of Contents

Licensed money lenders in Singapore – who are they?

Licensed money lenders are authorised money lenders in Singapore that are regulated under the country’s Ministry of Law. These legal money lenders are required to follow strict legislation set out by the Registry of Moneylenders and are a lawful alternative to taking out loans from a bank.

The Moneylenders Act stipulates that only licensed and legal money lenders in Singapore are allowed to loan money to businesses and individuals.

Therefore, borrowing from other unlicensed entities, such as loan sharks is illegal. Both borrower and illegitimate local money lender may face legal and financial repercussions, including a fine of not less than S$50,000 and not more than S$500,000 if they’re convicted of engaging in unlicensed moneylending.

You can visit the Ministry of Law’s website for the latest list of legal money lenders in Singapore at your convenience. If the private money lenders you’re dealing with are not on this list, they are likely illegal businesses. You should never take out loans from these unlicensed entities, even if your financial straits are dire.

What are the main differences between a bank and legal money lender in Singapore?

A licensed money lender smiling and ready to assist borrowers with loans

Most licensed private money lenders in Singapore provide a wide array of loans, from personal loans and renovation loans to medical loans and debt consolidation loans.

The selection is almost identical to what a bank can offer. In that case, what separates licensed private money lenders from banks? Read on to find out.

1

Licensed private money lenders can provide faster approval

Unlike banks, most registered money lenders have less stringent requirements for borrowers to take out a loan. This is one reason why some people may know these legitimate money lenders as “quick money lenders” – they can be much faster than banks when approving and disbursing loans.

For this reason, many individuals in urgent need of cash find borrowing from licensed money lenders much more appealing compared to traditional banks.

2

Licensed money lenders have less stringent requirements

Licensed private money lenders in Singapore not only provide fast, nearly instant cash, but they also allow you to take out a loan more easily than other financial institutions. While credit history is very important when you apply for a bank loan, legalised money lenders in Singapore usually do not practise credit discrimination – which means that you can get a loan even if you have a bad credit history.

What’s more, it’s even possible to find reliable money lenders in Singapore with minimal credit checks.

3

Registered money lenders require face-to-face verification

Did you know legal money lenders in Singapore require borrowers to head down to their registered offices before confirming a loan? This comes under one of the Ministry of Law’s rules for all licensed private money lenders in Singapore to have a physical office and conduct face-to-face verification with the borrower before disbursing any loan. This is the standard procedure all trusted money lenders in Singapore —including licensed money lenders online— must follow.

In today’s age of Internet fraud and scams, such a practice can be more help than hindrance. It allows both parties —money lender and borrower— to confirm the legitimacy of the deal, before committing to a legally binding agreement. This reduces the chances of you falling for identity fraud or other ruses adopted by sophisticated scammers today.

Loan applications for banks, on the other hand, can be done entirely online. This means that you do not have to visit the bank’s branch to have a loan approved or funds disbursed, although physical verification may be required by the bank on a case-by-case basis.

The table below highlights more key differences between borrowing from a licensed money lender and a bank:

Borrowing from banks Borrowing from licensed money lenders
What is the maximum loan amount I can take up? Up to 12 times your monthly income Up to six times your monthly income
What is the repayment period? (Personal loan) Up to seven years Up to 12 months
Time taken for loan approval Up to two weeks Can be less than 30 minutes
General requirements
  • Must be employed
  • Stable income
  • Good credit scores
  • Must furnish evidence of consistent income
  • Have not breached the maximum loan limit stipulated by MinLaw
Interest rate 3-6% per annum 1-4% per month (up to 48% per annum)
Application process Online via ibanking or banking app or in-person In-person or online, but face-to-face verification is required
Processing fee Usually 1-2% of the approved loan sum Up to 10% of loan principal
Borrowing from banks Borrowing from licensed money lenders
What is the maximum loan amount I can take up? Up to 12 times your monthly income Up to six times your monthly income
What is the repayment period? (Personal loan) Up to seven years Up to 12 months
Time taken for loan approval Up to two weeks Can be less than 30 minutes
General requirements
  • Must be employed
  • Stable income
  • Good credit scores
  • Must furnish evidence of consistent income
  • Have not breached the maximum loan limit stipulated by MinLaw
Interest rate 3-6% per annum 1-4% per month (up to 48% per annum)
Application process Online via ibanking or banking app or in-person In-person or online, but face-to-face verification is required
Processing fee Usually 1-2% of the approved loan sum Up to 10% of loan principal

How do you spot an illegitimate money lender in Singapore?

Borrower holding a memo on how to distinguish illegitimate money lenders from licensed money lenders in Singapore

There are a few telltale signs when an unverified and unlicensed local money lender offers you a deal that seems too good to refuse. Here are six of them:

1

The instant money lender does not have a money lender licence

You can check the money lender licence of the loan provider by referring to the official list of licensed money lenders in Singapore. If the purportedly legitimate money lender you’re dealing with is not on this list, the lender is likely an illegal business.

This list also states the money lenders whose licences are currently suspended. Scrutinise it thoroughly to ensure that you’re working with an authorised money lender in Singapore.

Piles of paperwork at a legal money lender’s office
Piles of paperwork at a legal money lender’s office

2

The loan requires minimal identity verification

Sometimes, illegitimate money lenders may offer to confirm a loan and have the money delivered right to your doorstep with just a text or phone call. They may also offer high loan amounts without needing to verify your income or employment status.

These are red flags because legalised money lenders in Singapore are not allowed to approve and hand out a loan without an in-person verification process. Remember, this in-person process safeguards both you and the local money lender. Therefore, if your online money lender in Singapore does not want to meet you in person, it is likely that they are an illegitimate money lender.

A licensed money lender approving a loan after successful identity verification
A licensed money lender approving a loan after successful identity verification

3

Charges and fees that are beyond the legal limits

Under the Ministry of Law’s regulations, the maximum interest rate a licensed in-person or online money lender in Singapore can charge is 4% per month (think: up to 48% per annum).

If the borrower repays an instalment late, the maximum late interest rate stands at 4% monthly as well. The late interest can and should only be charged on the amount that is repaid late. These limits apply regardless of the borrower’s income and whether the loan is an unsecured or secured one.

A borrower realises the charges and fees exceed the legal limits after engaging an illegitimate lender
A borrower realises the charges and fees exceed the legal limits after engaging an illegitimate lender

4

Loans that exceed legal borrowing limits

The Ministry of Law mandates that legalised money lenders in Singapore do not lend more than what is allowed.

Take a look at the table below to find out what’s the total amount you can borrow for unsecured loans from legitimate money lenders at any point in time. It largely depends on your residency status and income level:

Yearly income S’poreans & PRs Foreigners working & living in Singapore
Less than S$10,000 S$3,000 S$500
At least S$10,000 but less than S$20,000 S$3,000 S$3,000
S$20,000 or more Six times monthly income Six times monthly income
Yearly income S’poreans & PRs Foreigners working & living in Singapore
Less than S$10,000 S$3,000 S$500
At least S$10,000 but less than S$20,000 S$3,000 S$3,000
S$20,000 or more Six times monthly income Six times monthly income

5

Advertising through personal messaging

Furthermore, approved money lenders in Singapore are only authorised to place advertisements on certain channels, which include consumer or business directories, websites owned by the licensed money lender online, and advertisements placed on and inside the lender’s office premises.

All other advertising channels are prohibited. Offers sent via WhatsApp, Telegram, or other instant messaging platforms touting the best loan deal are unlikely to be from legal, trusted money lenders in Singapore.

The Ministry of Law recommends that you do not respond to such messages and instead, report the advertisements to the Registry at 1800-2255-529 or via its website. Lawbreaking legitimate money lenders will be investigated by the Registry while unlicensed money lenders will be investigated by the police.

6

They operate round the clock

Licensed money lenders online have fixed office hours that are stated clearly on their website. If any online money lender in Singapore claims to be a legal 24-hour money lender, they are likely illegal.

A clock signifying how illegitimate money lenders operate round the clock and are not approved lenders
A clock signifying how illegitimate money lenders operate round the clock and are not approved lenders

Guide to choosing a trusted money lender in Singapore

A borrower considers which legal money lender in Singapore he wants to borrow from

When comparing instant money lenders, it is not always immediately clear which could be the best fit for you, given the number of options available. However, it can make the process easier if you know what you are looking for (i.e. your must-haves) before applying.

Reviews left by borrowers for a licensed money lender

Check out the licensed money lender’s reviews

You can check out reviews of the licensed money lenders on Google to see how other borrowers rate their services and what they have to say about the business. Are they professional? Do they treat borrowers with respect? Do they help borrowers narrow down loans that solve their specific financial problems?

Additionally, you can make a trip down to the money lender’s office if you are unsure of anything — seeing is believing, after all. Many who are looking to obtain a loan from a quick money lender find speaking with a staff member on-site very helpful as it provides much better assurance on top of all the online research and fact-checking performed.

A borrower using GPS on his phone to find a licensed money lender nearby

Proximity: Find a licensed fast money lender nearby

Look out for a legal money lender located in a convenient location – near an MRT station, within a mall, or around the vicinity of your own home or workplace. Finding a legal yet fast money lender near you will save you precious travelling time, making it quicker for you to visit their office, have your credit check done and loan approved. Simply search “licensed money lenders near me” on Google Maps to get hold of all the relevant results. Easy peasy.

Are you looking for a licensed instant money lender in the eastern region of Singapore, right in the heart of Bedok? Enter MM Credit. We are located a stone’s throw away from the Bedok Central SingPost, a mere 5-minute walk from Bedok MRT Station.

We are also a reliable money lender in Singapore with more than 1,200 5-star reviews on Google.

What are the types of loans offered by the registered money lenders in Singapore?

Broadly speaking, loans from money lenders are split into two main categories — secured and unsecured.

Secured loans

Secured loans are loans that require you to put down collateral, usually something valuable like a car or house. This then ‘secures’ the loan, hence the name. However, if you fail to repay the loan, these pledged assets can be seized by the money lender.

The most common secured loans are housing loans and car loans.

Currently, the Total Debt Servicing Ratio (TDSR) stands at a maximum of 55% for property loans. For example, if you’re currently servicing other debt obligations equal to 10% of your monthly income, the maximum property loan you can obtain should only have a monthly instalment amount that is up to 45% of your monthly income.

If you are taking out a loan from a money lender to buy an HDB flat or executive condominium (EC) where the minimum occupation period of the EC has not yet expired, the Mortgage Servicing Ratio (MSR) applies. This is set at a maximum of 30% of your gross monthly income. The MSR refers to the amount of your gross monthly income that’s used to pay back all property loans, including the loan you want to apply for.

Depending on the number of home loans that you are servicing, the loan-to-value (LTV) limit changes. So, what defines the LTV limit?

Basically, it’s the maximum loan sum a borrower can get from a financial institution for a home loan.

In short, it is the loan sum shown as a percentage or ratio of the property’s value.

Outstanding home loans LTV limit
0 55% if the min. cash downpayment is 10%

75% if the min. cash downpayment is 5%
1 45% or 25% (the min. cash downpayment is 25% for both)
2 35% or 15% (the min. cash downpayment is 25% for both)

The lower LTV limit applies if the loan tenure goes beyond 30 years (or 25 years for HDB properties), or if the loan period goes past the borrower’s age of 65 y/o.

If you’re thinking about taking out a car loan, the LTV limit is 70% if the open market value of the vehicle is ≤ S$20,000. For vehicles with an open market value > S$20,000, the LTV limit is 60%.

Unsecured loans

These are loans that do not require you to pledge anything as collateral. However, this also means that the amount you can borrow will be significantly lower than a secured loan.

The following are some of the most common types of loans you can apply for from a licensed money lender. Certain details and rates may vary across different loan companies, so be sure to check with them carefully before signing the loan contract.

Personal Loan

Personal loans are versatile loans you can take for a variety of purposes, whether it’s paying off medical expenses, a wedding, or a funeral. They are typically unsecured loans.

Here are several common personal loans:

Payday loan

Payday Loan

If you find yourself in need of cash to pay off some urgent bills before your salary gets credited, payday loans might be suitable for you. This loan type is meant to tide you over for a month until payday — which is when you need to repay the loan and the accumulated interest.

Due to the short repayment period of one month, payday loans usually have a relatively higher interest rate than other types of personal loans. Additionally, with loan type, the maximum amount you can borrow is capped at a month’s salary.

Debt consolidation loan

Debt Consolidation Loan

If you’re juggling multiple loans or credit card debts, a debt consolidation loan might be helpful for you.

The benefit of taking out such a loan is that it consolidates all the other loans you have into a single loan. This means you will only need to make repayments to the money lender whom you have applied for a debt consolidation loan from.

This loan is meant to help you fully repay multiple creditors easily.

Debt consolidation loans would also usually come with lower interest rates and a longer loan tenure than your existing loans. This enables you to repay your debts with more comfortable instalments and a better timeline.

Student loan

Study Loan

This loan is for parents who wish to pave the way for their children, or those who are still in pursuit of higher education themselves. A study loan can be used to pay off your current school fees or other educational courses that you may be thinking of attending, but do not yet have the means to.

Grab loan

Taxi/Grab/Gojek Loan

The Taxi/Grab/Gojek loan is a fairly new type of loan that has emerged in the market recently. It was created to cater to the needs of those working in the ride-hailing industry. The loan can be used to cover accidents or mishaps that may happen on the road. Alternatively, the funds can be used to kickstart your career in ride-hailing or delivery, for instance by acquiring a vehicle.

Fast cash loan

Fast Cash Loan

Fast cash loans are quick cash options from fast money lenders that allow you to get hold of your funds in as quickly as 15 minutes. They don’t call it a fast cash loan without a reason.

Business Loans

Business loan

Another common loan type is the business loan, which includes start-up business loans and unsecured business term loans. We all know that setting up a business takes time and effort, but capital is equally important. While business loans can be offered as either an unsecured or secured loan, the final amount depends greatly on the company’s size and business model.

For that same reason, you may find that interest rates vary quite a bit between one business loan and another. In addition, licensed money lenders can freely set the late interest and late fees that they charge for business loans. These have no upper limit, but they aren’t allowed to levy charges like a processing fee or an early redemption penalty, unlike banks.

Therefore, it’s even more important that you clarify the fine print with the licensed money lender you’re checking out. After all, a business loan is a larger and longer commitment as compared to a personal loan. On the bright side, the funding allows you to grow your company at a faster pace.

If any of these loans sounded appealing to you, here’s good news — you can find all these loans at MM Credit, one of the go-to legal money lenders in Singapore.

Interest rates and other fees of licensed money lenders in Singapore

Percentage sign blocks signifying the interest rate and late interest rate offered by licensed money lenders

When you’re taking up a loan, a private money lender’s interest usually isn’t the only fee you have to pay. Most of the time, a processing fee is involved, which is capped at up to 10% of the loan principal amount. Reliable money lenders in Singapore typically charge 8-10% for this fee.

When payment is made past the monthly repayment deadline, authorised money lenders can also impose a late payment fee (capped at S$60 monthly) and a late interest charged at a rate of not more than 4% monthly for every month the loan is repaid late.

Do keep in mind that the late interest can only be charged on the amount that is repaid late. The money lender is not allowed to charge the above late fees and interest on outstanding amounts that are not yet due for payment.

Looking for a licensed money lender with low interest rates?

Things to note before applying for a loan with an approved money lender in Singapore

Getting a loan should not be a hasty decision that you make on the spot. Before you take out a monthly loan with a licensed money lender in Singapore, make sure you understand all the fees and charges involved. Do take the time to compare money lenders and consider your financial situation carefully to ensure that you can repay the loan you’re thinking of taking out on time.

Here are some things you can do on your own before getting a loan:

A borrower with a pie chart brainstorms for a suitable monthly budgeting plan

Create a monthly budgeting plan

With a new loan to repay, you might find yourself financially tied up from month to month. Setting aside a monthly budget — one that accounts for all your necessities and bills — can give you greater clarity on how to manage your finances.

Having the certainty of being able to pay back each month’s instalment is going to give you some much-needed peace of mind.

A stack of documents prepared by a borrower before meeting a licensed money lender in person

Prepare your documents early

Since licensed money lenders verify and pay out loans only in person, do check that you have all the necessary documents before visiting a licensed money lender to obtain the loan in the shortest amount of time possible. Having all the required documents on hand helps to speed up the approval process too, which is what any applicant would want.

Borrowers clarifying the loan contract terms with a legal money lender

Clarify all doubts before signing the loan contract

The law requires licensed money lenders to explain all the terms of a loan to you in a language you’re comfortable with and fully understand as well as provide you with a copy of the complete loan contract. Make sure you fully understand the contract’s terms, in particular, the repayment schedule, the interest rate charged, the interest payable and all applicable fees.

A loan is a legal contract and there is no going back once it’s signed. Therefore, read all the fine print and confirm that you can repay the loan smoothly before signing on the contract’s dotted line.

A stack of documents including credit history report a money lender uses to assess a borrower's eligibility to apply for a loan

Check your loan eligibility

To be eligible for a loan from a money lender, you need to be between 18-65 y/o, have a consistent stream of income, and be residing in Singapore. Remember to check your borrowing limits while you’re at it.

What is the application process for a loan?

Have you decided to apply for a loan with a licensed money lender? Quick money lenders can disburse your funds within 30 minutes, so you don’t have to worry about any delays.

Here’s the step-by-step process of applying for a loan, all the way until the funds are in your hands:

Step-by-step process of borrowing from a licensed money lender in Singapore

1

Apply online via the licensed money lender’s website or in person at their office.

2

If you have applied online, a loan officer from the company will call you within one working day to schedule an in-person office appointment.

3

Prepare all the necessary documents (see “Documents required for a loan application” below) and bring them to the office.

4

During your meeting with the loan officer at the money lender’s office, they will verify your documents, check your financial status, and verify your loan history with other lenders via the Money Lenders Credit Bureau (MLCB).

5

If there are no issues, your loan can be approved within minutes.

6

After which, the loan officer will carefully explain the loan terms to you in the loan contract. Read and understand it well. Remember to ask any questions that you have along the way and negotiate your terms before signing on the dotted line.

7

Receive your funds in cash or via bank transfer immediately.

1

Apply online via the licensed money lender’s website or in person at their office.

2

If you have applied online, a loan officer from the company will call you within one working day to schedule an in-person office appointment.

3

Prepare all the necessary documents (see “Documents required for a loan application” below) and bring them to the office.

4

During your meeting with the loan officer at the money lender’s office, they will verify your documents, check your financial status, and verify your loan history with other lenders via the Money Lenders Credit Bureau (MLCB).

5

If there are no issues, your loan can be approved within minutes.

6

After which, the loan officer will carefully explain the loan terms to you in the loan contract. Read and understand it well. Remember to ask any questions that you have along the way and negotiate your terms before signing on the dotted line.

7

Receive your funds in cash or via bank transfer immediately.

Documents required for a loan application

Employed individual smiling after preparing the necessary documents for a loan application

If you are an employed Singaporean or Permanent Resident taking out a personal loan, you’ll need to prepare the following documents:

NRIC

CPF contribution statements

Latest three months’ payslips

Happy self-employed woman after putting together the required documents for a loan application

For self-employed individuals, you’ll need to prepare:

NRIC

IRAS Notice of Assessment

Documentation of income

A foreigner in good spirits after getting the documents needed for a loan application with a licensed money lender

For Foreigners, the documents needed are a little different:

Passport

Work pass

Evidence of residential address (i.e. tenancy agreement, telephone bill, etc.)

Last three months’ payslips

Businessman grinning from ear to ear after preparing the necessary documents for a business loan application

Ditto for business loans, where you’ll need:

Company’s business profile (BizFile) from ACRA

Last six months’ bank statements

NRICs of major shareholders and directors

Tenancy agreement of physical office/shop

Latest income tax assessment of company’s major shareholders and directors

Credit report of major shareholders and directors from the CBS

Latest financial statements and business contracts

Are you ready to apply for your loan now?

What should I do after being granted a loan by a private money lender in Singapore?

1

Ensure that the correct principal amount of the loan is disbursed to you. The money lender is only permitted to charge a processing fee of up to 10% of the loan’s principal amount.

2

Pay the loan instalments on time to avoid incurring late payment fees, late interest and compound interest.

3

Make sure the money lender issues a receipt each time you make any repayment towards your loan, and check that all the details are accurate (name, repayment amount, date, etc.).

4

Ensure you receive a statement of account for all your loan(s) at least once every January and July and check that the details are correct (name, loan amount, date, etc.).

5

Retain all statements of accounts and receipts of payments as documentation and evidence of payment.

What can licensed money lenders do if I don’t repay my loan?

Borrowers discussing a loan contract with a knowledgeable legal money lender in Singapore

Governed by the Ministry of Law, licensed money lenders have the right to seek repayment when it is due.

There are various ways they can do so, including sending a Letter of Demand by post to you or your employer’s address, visiting your home or office to collect the money, and filing for litigation against you in court.

However, there are some things that legal money lenders cannot do when it comes to seeking repayment. These include: harassing borrowers with multiple SMS/calls, making repeated calls to the borrower’s home and office, causing distress to the borrower’s loved ones and colleagues, contacting borrowers during unusual hours, or visiting and loitering around the borrower’s home and workplace multiple times or during unusual hours.

Please get help from the police if you find that the licensed money lender you’ve engaged is resorting to such unlawful tactics.

Do you need a loan with a licensed money lender in Singapore?

MM Credit is one licensed money lender in Singapore that offers a wide variety of loans at competitive rates. Furthermore, applying for a loan with us is quick and easy. Simply fill up this contact form and our experienced loan officers will get back to you with a personalised quote as soon as possible.