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How To Choose the Best Money Lender in Singapore (2024 Update)

How To Choose Money Lender Singapore?
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Unexpected expenses can come in shapes and sizes. Whether it’s a car breakdown, a burst pipe, or a medical emergency, these financial emergencies can cause a strain on your budget. Most people choose to take out loans to pay off these expenses.

Unfortunately, traditional bank loans don’t always work out. This is why when you need quick financial assistance, a licensed money lender is a viable alternative to banks. But is it safe to borrow from a licensed money lender?

All licensed money lenders in Singapore are governed by the Ministry of Law. Before you start shopping for the best loan plans, here are a few things you need to know.

What Is a Licensed Money Lender?

A licensed money lender in Singapore is an approved lender under the Ministry of Law. Legal lenders can provide instant loans to Singaporeans, Permanent Residents, and Foreigners with a valid Employment Pass. All licensed lenders are listed in the Registry of Moneylenders.

Licensed money lenders are an excellent alternative to traditional bank loans since they have less stringent loan processes. This results in faster cash disbursements, perfect for when you’re in a bind. Before engaging with any lender, make sure to check the complete list of licensed moneylenders from MinLaw’s website.

How To Check if a Licensed Moneylender Is Licensed?

All licensed money lenders must adhere to the strict rules and guidelines detailed in the Moneylenders Act. Check the Registry of Moneylenders on MinLaw’s website. The Registry lists all approved legal lenders in Singapore together with their license number, approved place of business, and contact information.

You can also call the Ministry of Law at 1800-2255-529 to inquire whether a money lender is licensed. Remember, borrow only from verified licensed money lenders. This will ensure that you’re getting a fair loan plan and that your rights as a borrower are protected.

Unlicensed Moneylender Vs. Licensed Moneylender

Aside from the fact that one is violating the law and the other is not, loan sharks and licensed money lenders are different in many ways. There are even tell-tale signs that could signal you whether you are dealing with a loan shark or not. Here are some of the most apparent differences between the two.

  Licensed Moneylender Loan Shark

Loan amount

6 times your monthly income if earning an annual income of at least $20,000

More than what is legally allowed

Interest rate

Only up to 4%

More than 4%


Present; in written form

Skipped or none at all

Type of fee charge

Late fee of not more than $60, Loan fee of not more than 10% of the principal loan

Exorbitant fees, unnecessary additional fees

Physical office



Loan term

Usually up to 12 months; Indicated in the Note of contract

None; often only verbally

License information

Posted on their website; included in the list of money lenders


1. Loan amount

Legal money lenders are only allowed to lend at most $3,000 for people with less than $20,000 annual income, while 6 times the monthly income of those earning more than $20,000 annually. On the other hand, loan sharks would offer a large sum of money, making it difficult for borrowers to pay back. They would then use this situation to ask for unreasonable late payment fees and other additional penalty charges.

2. Interest rate

A Singapore money lender is only allowed to charge a 4% interest rate. Meanwhile, loan sharks would charge extremely high rates. There is no one stopping them from charging exorbitant fees, mainly because the government does not regulate them. For the borrowers, this would mean that borrowing from illegal moneylenders could cost you a lot.

3. Documentation

A licensed money lender will give you a contract to sign. This contract contains the loan terms and all the other details about the loan. They are required to explain to you what the contract contains. Meanwhile, loan sharks do not have a written contract, they just tell you the loan terms, and nothing is formally written down.

4. Type of Fee Charge

Legal moneylenders in Singapore are only allowed to charge certain fees. Late repayment fees must not exceed $60 for each month, while the loan approval fee or service fees should not exceed 10% of the principal of the loan. In contrast, loan sharks would include unnecessary fees and charges, sometimes not known to the borrowers.

5. Physical Office

A licensed money lender is bound to have a physical office where it accommodates its borrowers. Also, they often have their website, thereby establishing their legitimacy. Loan sharks do not have a physical or an online site. They choose to do this so that it would be easy for them to hide from borrowers.

6. Loan Term

Moneylenders in Singapore have their own loan terms and deals. One common thing they do is that they write these terms into the Note of the contract. This written agreement is legally binding, and it is something that is agreed upon between the borrower and the lender. In the case of loan sharks, loan terms are vague and ambiguous in order to further confuse borrowers.

7. License Information

Legal moneylenders in Singapore are all included in the Registry of licensed lenders in the country. Their license information is included in the MinLaw list as well as on the website of each of the lenders. Meanwhile, loan sharks do not license information to show. If in case a lender showed you a license, you can always confirm it by checking the Registry.

businessman with money

How to Choose the Best Licensed Money Lender

Now that you know the importance of trusting a licensed moneylender, you also have to realize that not all lenders are the same. Some are better than others. Here are certain aspects you have to pay attention to when choosing which among these legal moneylenders to trust.

1. The Moneylender’s Reputation and Credibility

The first thing to check is the validity and legitimacy of the moneylender. Make sure that the license of the moneylender is legitimate by checking out the Registry from the Ministry of Law. The license number must match up with the one on the MinLaw website.

Aside from checking the license, you can also do a background check on the licensed moneylender in Singapore you are eyeing. 

You can check Google reviews and see the feedback of the clients who had previously availed of the business services. There are websites dedicated to collating reviews and feedback on financial institutions. You can consult these to have a better understanding of what these companies are capable of.

Check out here for the Ultimate Moneylender Guide to borrowing from Licensed Money Lender in Singapore.

2. Reasonable Interest Rates

Licensed moneylenders in Singapore are restricted by law to have an interest rate of not more than 4%. Some lenders offer a low-interest rate. 

For example, some competitive licensed moneylenders would give 2% of interest rates. As a borrower, this 2% difference in the interest could mean saving several hundreds or thousands of money in the long run.

3. Flexible Loan Repayment Plan

The best licensed money lender in Singapore provides leeway to its clients. Borrowers can negotiate the repayment terms of the loan. If the borrower does not have the means to pay back the loan, he is given other options to settle his obligation. 

Make sure that you are dealing with a lender with a flexible loan repayment plan. Such a plan will serve as your safety net in case you encounter financial difficulty along the way.

4. Hassle-free Loan Application Process

A money lender in Singapore must have an easy loan application process. Many lenders allow online loan applications now. Others even guarantee approval within 45 minutes or less than an hour. Choose a lending company that ensures the comfort and convenience of the clients. As a borrower, you should not undergo so much hassle when applying for a personal loan or any other loan type.

What To Do Before Taking a Loan

Have you decided to take out a loan from a licensed money lender? Here are some important factors to consider before filing a loan application:

  • Decide what type of loan and how much you need. For instance, if you need cash for a big-ticket purchase or to pay off emergency expenses, you can take out a personal loan.
  • Get your documents in order. Before applying for a loan, check your eligibility for the maximum loan amount that you can apply for. Some of the basic documents that legal lenders will ask for include a copy of your NRIC, income statement, employment letter, and proof of residence.
  • Make sure you understand the terms of the loan. The loan officer should clearly and thoroughly explain the terms and conditions of the loan, including the interest rate, tenure, and repayment schedule.
  • Compare loan plans to find the best terms. Shop around different licensed money lenders to find the most favorable terms. Do not immediately commit to a loan until you are satisfied with the terms and conditions.
  • Lastly, you need to fully understand the terms of the loan before signing the loan contract. It must include all the loan details, particularly the repayment schedule, interest rate charged, and applicable fees.
Man showing has no money by turning out pocket

Red Fags To Watch Out For

Aside from verifying the lender’s license via the Registry of Moneylenders, it’s also important to watch out for questionable behaviors. Loan sharks are becoming more and more cunning. They may try to imitate a licensed money lender to trick unsuspecting victims. Here are red flags to watch out for to determine if you’re dealing with a loan shark:

1. Advertising Using Flyers or Soliciting Loans via SMS, Emails, or Social Media Platforms

Loan sharks are notorious for engaging consumers via SMS, WhatsApp, or social media. Note that licensed money lenders are not allowed to advertise through these channels. They can only advertise through:

  • Business or consumer directories – both in print and online media
  • Official business website of the legal money lender
  • Advertisements placed within or on the exterior of the lender’s approved place of business

If you encounter even a licensed money lender offering loans through other channels, report them immediately to the Registry of Moneylenders at 1800-2255-529 or via their website.

2. Approve Your Application Without Doing Due Diligence

While you can send a loan application online, legal money lenders are still obligated by law to meet you face-to-face. This is required in verifying your identity. Additionally, during the meeting, a loan officer will explain the terms and conditions of the loan. Lastly, you’ll need to sign a complete loan contract before the loan is disbursed.

An unlicensed money lender will approve your loan through a phone call or email. Some may even disburse cash without verifying your identity or income level.

3. Ask for Your SingPass Credentials

Never give your SingPass credentials to anyone. Legitimate money lenders will process your Singpass only through government-authorized means.

4. Will Retain Your NRIC Card or Other Personal ID Documents

Licensed money lenders will need to verify your identity through your NRIC card or other personal ID documents, such as your passport, employment pass, or driver’s license. However, they will never keep these documents.

Unlicensed money lenders, on the other hand, will refuse to give these official documents back because they’ll use them to gain leverage on you.

5. No Physical Address

Legal money lenders in Singapore need to have an approved place of business. As previously mentioned, you’ll need to visit their office for face-to-face verification. That said, it’s best to check out the money lender’s official business address and stop engaging with a lender who refuses to disclose their address.

6. Ask for a Processing Fee Before Granting Your Loan

Loan sharks are notorious for imposing exorbitant fees on top of already outrageous interest rates before they can grant your loan.

7. Use Abusive Language or Behave in a Threatening Manner

This is a major red flag to determine if the lenders are licensed money lenders. Loan sharks are known for using harassment tactics when collecting a debt. Some are known to stalk delinquent borrowers while others vandalize properties. In fact, one report stated that when a foreign domestic worker failed to repay her loan from loan sharks, these unlicensed money lenders harassed her employers.

How to Deal with Loan Sharks?

If you happen to borrow from an illegal loan provider, below are the necessary steps you can take. 

1. Contact the Law Ministry

You can submit any queries, complaints, and suggestions here so they can respond to you accordingly. If your life or security is threatened by an illegal money lender, do not hesitate to contact the police. They are the first authority who can respond to you if you needed help.

Immediately contact the police by dialing 999 or the X-Ah Long hotline at 1800-924-5664. You can also seek help from these agencies if you have a debt problem:

  1. Credit Counselling Singapore: 6225-5227 (
  2. National Council on Problem Gambling: 1800-6-668-668 (
  3. ComCare: 1800-222-0000 (

2. Know your Rights as a Borrower

It is important that you know your rights as a borrower. Your knowledge and familiarity can serve as your best weapon to combat any possibility of abuse or exploitation. You can read the rules and regulations set by the government for licensed lending companies here. Even before applying for personal loans and other types of loans in Singapore, it is important that you know your rights.

3. Get Legal Advice from a Lawyer

If you know someone or have enough money to spend, you can always get legal advice from a lawyer. Get a lawyer who specializes in matters of loans and finances. Note that talking to a lawyer does not necessarily mean that you will have a case in court. You can also talk to one if you have questions and clarifications regarding loan contracts and agreements you sign.

See Also: Licensed Money Lender vs Bank


In an ideal scenario, you’ve planned for every unexpected expense. Thankfully, you have options if you need financial assistance. Turn to legitimate financial institutions, such as banks and licensed money lenders, rather than illegal lenders, to meet your obligations to tide over tough financial challenges.

Key Takeaways

  • For unsecured loans, you can borrow up to 6x your monthly income from a licensed money lender if you have an annual income of at least S$20,000.
  • Licensed money lenders’ allowed interest rate is between 1% to 4% per month regardless of the borrower’s income level or loan amount.
  • Licensed lenders will never advertise through flyers, WhatsApp messages, or social media platforms.
  • Watch out for red flags when dealing with a lender, such as abusive and threatening behavior.

Need instant cash loans? Compare the best loan plans at Loan Advisor. The best one-stop loan comparison portal, Loan Advisor provides free, unbiased, and up-to-date information about the top licensed money lenders in Singapore. Request up to three loan quotes today at no cost to you!

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