Licensed Money Lenders Singapore 101: Read This Guide Before Taking a Loan

family reading guide before taking loan
family reading guide before taking loan

Table of Contents

Table of Contents

Money lenders are important players in Singapore’s finance industry, impacting and helping a diverse group of people – from the Average Joe to business owners.

Equally compelling and fascinating is the history of money lenders in Singapore, which is said to have begun in the 1820s. Singapore’s first financiers were the Chettiars, a subgroup of the Tamil community who hailed from Chettinad in Tamil Nadu, India.

At that time, they peddled their business mainly in the quaint shophouses of Market Street. However, in the 1970s, these pioneers slowly lost ground to banks, and the entire Chettiar settlement was gone by 1977.

Over the years, the legal money lending industry in Singapore has experienced significant growth. Today, licensed money lenders can be found throughout the country and continue to provide legal and fair money lending services to those in need.

But what exactly are licensed money lenders?

man with question mark

Licensed money lenders provide loans to Singapore Citizens, Permanent Residents, and Foreigners residing in Singapore with valid Work Passes. They are registered companies that are approved by the Ministry of Law and are required to follow the rules and regulations dictated by the Ministry, as well as adhere to the Moneylenders Act.

Why should I borrow from licensed money lenders?

There are many reasons to take up a loan from private money lenders. To understand them, let’s first take a look at the differences between banks and money lenders.

Firstly, the best licensed money lenders have more lenient requirements than banks. For instance, banks are highly likely to deny your loan application if you have a subpar credit history or an annual income of less than S$20,000.

On the other hand, most Singapore money lenders only require you to have a regular source of income and not have a history of defaulting on repayments to other licensed money lenders.

Furthermore, quick money lenders have a faster approval process than banks, which is crucial if your need for cash is urgent. For example, an investment or business that needs additional funding as soon as possible or medical emergencies.

UK Credit is one such licensed money lender that provides fast legal loans.

UK Credit is one such licensed money lender that provides fast legal loans.

How do I check if a money lender is licensed and not an illegal money lender in Singapore?

Before you start taking up loans from money lenders, make sure that they are legitimate. Illegal money lenders in Singapore exhibit several telltale signs that they are not legitimate.

Here’s a useful checklist to determine if the company you are looking at is an approved money lender in Singapore:


Check the official list of legal money lenders in Singapore

The first thing you should do is to ensure that the money lender you’re checking out is registered with the Ministry of Law. To do this, check your money lender against the complete list of licensed money lenders on the Ministry of Law’s official website.

Make sure that the names of the companies, addresses, license numbers, websites, and phone numbers are tally to ensure the authenticity of the money lender.


Does the lender advertise illegally?

Illegal money lenders might put up illegal advertisements as well. Licensed money lenders are not permitted to solicit loans by calling or texting, or through any social media outlets. This includes instant messaging services like WhatsApp and Telegram too.

Licensed moneylenders are only allowed to advertise through business or consumer directories or place advertisements in the interior or exterior of their registered place of business. Additionally, they can advertise through their website as well.


Be aware of overly high interest rates


Take note of interest rates that are overly high. Remember that the maximum interest rate for licensed money lenders as dictated by the Ministry of Law is 48% per annum or 4% per month.

This limit applies to both the nominal interest (loan amount) and late interest rates. Take note that the late interest rates can only be applied to the overdue amount and not the total outstanding amount not yet due.


Ensure that there is a money lender license displayed

money lender staff

Remember to check for the money lender’s license at their registered place of business. When visiting their office, you should see their license certificate displayed clearly. If it is absent, they may not be licensed. Although it’s a seemingly minor detail, it’s a huge red flag and something that you need to pay attention to.

Here are some tips on how you can determine if you are dealing with a lender with a money lender license.


Does the lender approve loans without checking your income?

Be wary when the money lender offers you a large loan without certifying your income first. There are limits to how much legal money lenders can loan out to borrowers and that amount is pegged to your income.

For unsecured loans, licensed money lenders can only loan a maximum amount of up to six times the borrower’s monthly income.


Does the money lender ask for a fee before approving your loan?

Legal money lenders will never ask for an upfront fee just to process or hasten your loan application. Licensed money lenders can charge a 10% processing fee only after the loan is granted.

Therefore, if a money lender asks for an upfront fee, be careful as they could be an illegal business.


Do you get to visit the money lender’s office?

visiting money lender office

Face-to-face verification is compulsory for licensed money lenders to process and approve your loan application. This means that the money lender must have a legitimate office, and you will need to visit the lender’s registered place of business for the loan contract signing and collection of funds.

If the money lender is conducting the entire process via email, SMS, or over a phone call without any verification of your documents, it is a scam or illegal money lending. Avoid lenders that insist on meeting you in public places, such as food courts or fast food restaurants – they could be operating illegally.


Are there any dubious terms in the loan contract?

checking terms loan contract

Be sure to read the fine print of the loan contract carefully. If they are incomplete or misaligned with what they have promised you verbally, these are red flags. Promises like a 0% interest rate or 100% approval rate are also signs of scams, so if you see that in the contract or otherwise, head the other way.

Looking for a trusted and authorised money lender in Singapore?

Pros and cons of borrowing from licensed money lenders

Taking up a loan from licensed money lenders is a popular choice among borrowers thanks to the advantages that these businesses offer. However, it is important to take into account the other side of the coin too.

Here are the pros and cons of borrowing from licensed money lenders in Singapore:



Less demanding minimum income requirement

High interest rates (max. 48% p.a.)

Costly late charges
(max. 48% p.a. on overdue principal and/or interest)

Fast loan approval (within 30 minutes)

Expensive processing fees (max. 10% of loan principal amount)

Maximum loan amount of up to six times your monthly income

Shorter time to repay the loan (max. 24 months tenure)

Searching for a reliable money lender? UK Credit is an approved money lender in Bedok – it’s just a 5-minute walk from Bedok MRT station.

Who usually borrows from licensed money lenders instead of banks?

As banks and licensed money lenders have their unique advantages, borrowers usually take up loans from either one of the two depending on their financial situation and or needs.

These are generally the types of borrowers who take up loans from banks versus money lenders:

People who borrow from banks

People who borrow from licensed money lenders

Have an excellent credit history

May have a poor credit history

Have a full-time job that provides a stable income of S$20,000 and above

Have regular income (but not necessarily from a full-time job)

May not need cash immediately

Needs cash urgently

Needs a loan amount higher than six times the borrower’s monthly salary

Needs a loan amount that is lower or equal to six times the borrower’s monthly salary

What are the types of loans that licensed money lenders can offer?

The most popular type of loan is a personal loan. Personal loans are flexible and used for large purchases, whether it’s a wedding banquet or a medical bill. These can be further broken down into various types of cash loans. Borrowers usually repay personal loans through several installments that come with monthly interest.

Depending on your financial situation, you may apply for an unsecured personal loan. When a loan is unsecured, it means that you won’t have to put up any collateral or assets to get the loan. This means that the risk for you as a borrower is lower, but in return, the interest rate may be higher when compared to secured loans.

Here are the different types of personal loans that are generally offered by licensed money lenders in Singapore:

cash icon


cash icon


The next type of loan that licensed money lenders can offer is a business loan.

If you are an owner of a small and medium-sized enterprise (SME), there will be times when business is difficult, but things will get better. During that stretch, you may need a capital injection to keep the business afloat or simply to pay your employees. A business loan can help you do just that.

Looking for a loan from a top licensed money lender? At UK Credit, we offer competitive rates as well as professional and trusted service.

What are the documents required to apply for a personal loan with a money lenders in Singapore?

To get your personal loan application processed at a licensed money lender, the following documents are required:

For Singaporeans/Permanent Residents:




CPF statements (for full-time employees) or IRAS Notice of Assessment (for self-employed), to be retrieved using Singpass


Proof of income such as payslips, bank statements, or invoices (for self-employed individuals) from the last three months

For Foreigners residing in Singapore:


Work passes, such as an S-Pass or E-Pass


Proof of home address, for example a tenancy agreement, copy of a recent telephone bill, or other documents that include your residential address


Payslips from the last three months

UK Credit is one of the best licensed money lenders in Singapore that is both trusted and well-reviewed. If you have more questions about applying for a loan, our experienced loan officers will be more than happy to assist you.

What is the maximum amount you can borrow?

Your loan limits would differ depending on whether the loan is secured or unsecured, as well as your nationality and income.


For secured loans, we have to take into account the type of loan that you’re thinking of applying for.

Type of loan

Maximum amount

Property and car loans

55% of the borrower’s Total Debt Servicing Ratio (TDSR). TDSR is the portion of the borrower’s gross monthly income that is taken to repay all of their loans

HDB or Executive Condominium (EC) loans

30% of the Mortgage Servicing Ratio (MSR). MSR is the portion of the borrower’s gross monthly income that is taken to repay all of their property loans for HDBs and ECs

Car loans

Not more than 60% to 70% of the Loan-To-Value (LTV) ratio. LTV is the ratio derived from the loan amount divided by the purchase price of the vehicle. This figure depends on the vehicle’s open market value (OMV).


As for unsecured loans, the maximum amount is S$3,000 for borrowers who are Singaporeans and Permanent Residents with an annual income of less than S$20,000.

For Foreigners residing in Singapore, the maximum amount is S$500 if their annual income is less than S$10,000, and S$3,000 if their income is at least S$10,000 but less than S$20,000. The maximum amount is further increased to six times their monthly income for Singaporeans, Permanent Residents, and Foreigners if they have an annual income of more than S$20,000.

What is the loan application process like?


Go to the money lender’s website and fill up the loan application form. You can also walk into the money lender’s office to apply for a loan.


Wait for a call from the company’s loan officer. You will be informed to visit their office for identity verification and a short interview. Bring all required documents with you. If all your documents pass muster, your loan should be approved in around 10-20 minutes.


The loan officer will then go through the loan terms and contract with you. Make sure you understand the terms and clarify anything that you’re unsure of before signing the loan contract.


After you sign the loan contract, your funds will be deposited into your bank account or disbursed to you in cash.

Provided all your documents are in order, the whole process can be completed in less than 30 minutes.

Need a fast cash loan? UK Credit is one of the best approved money lenders in Singapore.

What are licensed money lenders’ interest rates in Singapore?

Private money lenders’ interest rates are regulated by the Ministry of Law, as mentioned above.

The maximum interest rate for monthly loans that money lenders can charge is no higher than 4% per month or 48% per annum. Another important thing to note is that money lenders’ interest rates are calculated based on a reducing interest rate formula, which means that interest is only calculated based on the outstanding loan amount.

For example, if you borrowed S$1,000 to be repaid over five months, with a monthly interest rate of 4%. The first month’s interest will be 4% of the S$1000 owed, which is S$40. The second month’s interest will be 4% of the outstanding amount, which is S$32.61, and so on.

Take a look at the table below for a better illustration of how reducing interest rate formula works:


Payment (S$)

Interest (S$)

Principal (S$)

Balance (S$)


























This means that you will pay less in the absolute amount of interest every month, as compared to a loan with a flat interest rate.

What are the types of fees that you need to pay to licensed money lenders?

Be sure to get acquainted with the types of fees that you would need to pay to licensed money lenders, on top of the monthly interest. A processing fee needs to be paid only after the loan is granted, which is capped at 10% of the loan principal amount. Late fees should never exceed S$60 a month.

Lastly, if there is a legal dispute to recover the loan (if you default on repaying the loan) and the money lender manages to make a successful claim, you will need to bear legal costs as determined by the court.

What should you do after your loan is approved?


Keep all relevant proof of payments

Keep all receipts as they are proof of payments. Also, they indicate how much of the loan is outstanding, and that can help you plan your finances.


Options if you can’t repay your loan

If you are unable to repay a loan, speak to your loan officer. Explain your situation honestly so that a feasible extended plan of payment can be drafted.

Do make sure that this new deadline can be met. You can also seek help from this list of welfare services (point 11) approved by the Ministry of Law.

The last resort is to file for bankruptcy should your debt exceed S$15,000, but do note that this comes with serious consequences. Your assets will be sold to repay the debt and you will not be able to apply for another loan.

Looking for a loan with a good licensed money lender?

UK Credit has more than 1,600 5-star reviews on Google and has served more than 11,000 borrowers to date. Our customers love us for our honest financial advice and professional and efficient service.

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