Scammers and unlicensed moneylenders often masquerade as licensed moneylenders. They deceive innocent borrowers into taking loans. Thankfully, the Ministry of Law in Singapore has set strict rules and regulations to govern the money lending industry. In doing so, it also protects borrowers from scammers and loan sharks.
That said, before visiting a moneylender’s website, it is strongly advised to verify their legitimacy. Borrowers should check out the updated list of licensed moneylenders in Singapore on MinLaw’s website.
The list is regularly updated by the Registry of Moneylenders and the Ministry of Law. Lenders who don’t comply with the Moneylenders Act and other MinLaw regulations are not included in the list.
The Role of The Registry of Moneylenders
The Registry of Moneylenders (ROM) is in charge of the registration and regulation of moneylenders in Singapore. It evaluates each applicant and will determine who will be given a license to operate. Additionally, ROM also has the power to revoke the license should the moneylender violate the Moneylenders Act.
Here are some of their primary responsibilities:
Licensing: With The Registry’s e-services facility, Singapore moneylenders can easily apply for license registration. The Registry will decide whether or not to grant the license based on certain requirements.
Issuance or Refusal To Issue License: The Moneylenders Act provides the possible reasons for refusing the issuance of a license. Any lending business may appeal the decision within 14 days of being informed. They may do so by writing to the Minister.
Renewal of License: The ROM is also in charge of renewing licenses. The application for the renewal of a license must be made by the applicant at least a month before the date of expiry.
Revocation of License: The Registrar must provide the moneylender with a notice in writing before revoking or suspending their license. The notice must specify a date, not less than 21 days after the date of the notice. The licensed money lender may appeal the decision and show proof as to why the license should not be revoked or suspended.
Approval of Placed Of Business: The ROM has the authority to approve the place of business of a moneylender.
The Registry of Moneylenders rigorously evaluates each application to make sure that only the most trustworthy are given licenses to lend money. That said, you must be careful in choosing the moneylender you do business with.
Choose only from the list of licensed moneylenders on MinLaw’s website. You can find the list here.
Advisory for Borrowers On Licensed Moneylending
Things to Consider Before Borrowing
Before submitting a loan application to any licensed moneylender, consider alternatives first. For instance, you can check out financial assistance schemes offered by Government agencies. You can contact these agencies to know more about their financial assistance programs.
If you’re determined to borrow from a licensed moneylender, keep these key points in mind:
- Borrow only the amount you need and are able to pay. Avoid borrowing to pay off another debt.
- You are required by law to fulfil any loan contract with a licensed moneylender.
- Make sure you understand the terms and conditions of the loan contract. This means understanding the repayment schedule, interest rate, late payment fees, and other charges.
- Can you meet the contractual terms? Will the interest payment and late payment fees cause more financial strain in the future?
Advertising Restrictions for Licensed Moneylenders in Singapore
Under the advertising rules, those on the list of licensed money lenders can only advertise through three channels:
- The licensed moneylender’s business website.
- Within or outside their office, including door, shutter, window, or gate.
- Business or consumer directories such as Yellow Pages.
All other channels are prohibited. That said, licensed moneylenders in Singapore cannot:
- Advertise through text messages, newspapers, or social media platforms.
- Make false or misleading statements to trick victims into borrowing.
- Invite victims to take a loan or grant a loan without a proper application screening.
It’s best to ignore such advertisements. Instead, immediately report the advertisements to the Registry at 1800-2255-529. Or file a complaint through their website. Another option is to call the National Crime Prevention Council’s X-Ah Long hotline at 1800-924-5664.
What Can You Expect From A Licensed Moneylender?
The law requires licensed money lenders in Singapore to thoroughly explain the terms of the loan to you. Additionally, they are required to provide a copy of the loan contract.
The loan contract must include the following details:
- The principal loan amount
- The interest rate charged
- Repayment schedule
- And all the other fees applicable
For every repayment made towards the loan, the licensed money lender must provide you with a receipt. Additionally, they must provide a statement of accounts at least once every half a year in July or January. Lastly, make sure to keep all the documents and payment receipts. These will serve as your documentation and evidence of payments.
What if you have an existing loan?
You are still eligible to apply for a loan from a licensed lender. Their loan office will evaluate your ability to pay while taking into account your other financial obligations.
However, it’s best to reconsider whether you will be able to pay off all of your loan obligations. Don’t let your debt snowball. It can lead to more financial strains later on.
That said, there are different debt consolidation plans you can consider if you find yourself overwhelmed with debt.
Maximum Loan Amount You Can Borrow
For secured loans, there is no limit to how much you can borrow. Those on the list of licensed money lenders can only offer loans up to 6x your monthly salary. Please refer to the table below:
| Borrower’s annual income | Singapore Citizens and Permanent Residents | Foreigners residing in Singapore |
|---|---|---|
| Less than $10,000 | $3,000 | $500 |
| At least $10,000
and less than $20,000 |
$3,000 | |
| At least $20,000 | 6 times monthly income | 6 times monthly income |
Is There A Cap On Loan Costs?
Those on the list of licensed moneylenders in Singapore are only allowed to impose the following charges:
- The interest rate is capped at 4% per month, regardless of the loan amount and annual income.
- A one-time administrative fee of not more than 10% of the principal loan amount. This administrative fee is charged upon granting the loan.
- Late interest fee of not more than 4% per month the loan is repaid late.
- Late fee not exceeding $60 for each month of late repayment.
Remember, those on the list of licensed moneylenders are prohibited from charging more than the principal amount you borrowed.
Debt Collection
Licensed moneylenders might seek the assistance of credible debt collectors. These collectors can help mediate between you and the licensed moneylenders. They may also help you create a repayment option.
Debt collectors have a responsibility to help you look for alternative repayment solutions. However, they are prohibited from using violent, threatening, or harassing behavior. They are now allowed to:
- Stalk you or your family members
- Send notices to your workplace with the intention to humiliate or bully you.
- Cause a disturbance around your residence.
How To Apply For A Loan
Before you go to a licensed moneylender’s office, make sure you’re eligible for the loan and have all the necessary documents. This will help you get approved and get the cash within a few hours.
Eligibility:
- You are more than 21 yearsof age
- If you’re a Singaporean or Permanent resident, you’ll need a minimum salary of S$2,000
- If you’re a foreigner, you’ll need a minimum salary of S$3,000
List of Documents You Need When Applying For A Loan
For Singaporean and Permanent Residents
- Identity card or other personal ID documents
- Recent 3 months payslip
- Proof of residence, such as utility bill or tenancy agreement
- SingPass for logging into CPF, HDB, or IRAS website
For Foreigners
- Passport
- SPass, EPass, or Work Permit
- Recent 3 months payslip
- Recent salary crediting bank statement
- Proof of residence, such as utility bill or tenancy agreement
- SingPass for logging into IRAS website
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Things A Licensed Money Lender Must Inform You Before Granting A Loan
A licensed moneylender is required by law to provide you with detailed information about the terms and conditions of the loan. They must explain it in a language you understand. Here are the terms of the loans you must know about:
- Nominal interest rate
- Loan tenure
- Late interest charges
- Other permitted fees
- Repayment schedule
Licensed moneylenders are also required to provide you with a cautionary statement in writing before you are granted a loan. Additionally, you must be aware that you can lodge a formal complaint if necessary.
Lastly, finalize the loan by signing a contract in person. You must sign a complete contract at their place of business registered with the Ministry.
If the lender asks you to sign the contract elsewhere, or you don’t even have a contract, don’t go through with the application. You may be dealing with a loan shark.
Other Licensed Moneylender Responsibilities
Aside from providing a complete loan contract explanation and providing a copy of the complete contract, licensed moneylenders have other additional responsibilities.
- Explain the loan’s limitations through cautionary statements. Licensed moneylenders provide borrowers a chance to re-evaluate their loan applications.
- Receipt issuance. Legal lenders must provide you with a copy of your contract and a receipt. These will be used as proof of your initial and regular payments. Additionally, administrative fees and miscellaneous fees must have their own receipts as well.
- Provide you with a statement of accounts. Licensed moneylenders are responsible for providing you with a statement of accounts. The document must be complete and have a detailed report of all your payments, including penalties and interest rates.
Tips For Choosing The Top Licensed Money Lenders in Singapore
There are more than a hundred licensed moneylenders in Singapore. On top of that, there are also loan sharks impersonating legal moneylenders. So it can be challenging to find a reliable licensed money lender, especially when you’re in need of urgent cash.
Aside from finding them on the list of licensed moneylenders, you have to consider a few factors. To help you, here is a list of criteria to find the best licensed moneylender:
- The number of positive reviews on Google and other major review websites.
- Verified reviews found on online forums and directories.
- Their license has not been revoked by the Registry of Moneylenders
- Operating for more than 8 years.
To learn more check out our Ultimate Guide to a Reliable Money Lenders in Singapore
Be Mindful Of These Things When Choosing a Moneylender
Licensed and Accreditation
When choosing a moneylender, make sure that they are on the list of licensed moneylenders found on MinLaw’s website. This means the service they provide meets regulations and legal requirements.
Terms and Conditions
As previously mentioned, you must be aware of the terms and conditions of the loan before signing the contract. It must clearly state the loan amount, interest rate, and repayment schedule.
Choose licensed moneylenders in Singapore that are flexible and can offer you terms that suit your financial situation. That said, consider comparing different loan packages before applying.
Fees
The Ministry of Law determines which charges and expenses may be charged by moneylenders.
Typically, licensed moneylenders will charge an administrative fee. Licensed moneylenders in Singapore can only charge up to 10% administrative fees. So ask how much they are charging before working with licensed moneylenders. Compare the charges of different licensed moneylenders to get the best loan cost.
Other fees that legal lenders may charge include:
- Late interest fee of not more than 4% per month the loan is repaid late.
- Late fee not exceeding $60 for each month of late repayment.
Remember, no fees other than what is specifically allowed by the Ministry may be charged.
Reputation
Aside from checking the license, it’s also advisable to do a background check on the lender you wish to do business with. For instance, check Google reviews and read what previous clients have to say about the licensed moneylenders in Singapore.
Reading reviews of the moneylenders will help you deduce the type of people they are and whether you will want to work with them. That said, choose licensed moneylenders with a good reputation.
Another way to gauge a lender’s reputation and credibility is whether they have a physical office or none. Having an office dedicated to its customers gives the impression of permanence and reliability.
The place of business of lending companies is typically indicated on the “contact us” page of their official website.
Other Factors to Consider
Even if the lender is on the list of licensed moneylenders, you must still be wary of these red flags:
- Use abusive words and behave in a threatening manner.
- Asks for your SingPass user ID and/password
- Retain your personal identification documents, such as NRIC card, driver’s license, or ATM card
- Asks you to sign a blank or incomplete loan contract.
- Grants you a loan without giving you a loan contract or a proper explanation of the loan terms.
- Grants you a loan without doing due diligence during loan application.
- Withholds a part of your principal loan amount.
These practices are prohibited by law. Should you encounter them, immediately file a complaint to the Registry of Moneylenders at 1800-2255-529. You may also contact the National Crime Prevention Council’s X-Ah Long hotline at 1800-924-5664.
What To Do If a Moneylender Is Acting Suspicious
The basic rule of thumb is to never engage with a lender who’s not listed on MinLaw’s website. However, should you happen to encounter loan sharks, there are steps you can take.
Even licensed lenders can violate the rules set by the Ministry of Law. If the legal lender starts acting suspiciously or violates any of your rights as a borrower, do not hesitate to report and take legal actions against them.
Contact the Ministry of Law
Reach out to the Ministry of Law as soon as possible. Submit any queries, complaints, or suggestions here.
In the event that you’re being threatened by loan sharks, call the police immediately. Please dial ‘999’. They will immediately respond and provide assistance.
If you suspect or know anyone who could be involved in illegal loan shark activities, you can call the X-Ah Long hotline at 1800-924-5664.
Know Your Rights As A Borrower
Know your rights as a borrower. This will help you combat any possibility of abuse or exploitation. You can read the complete rules and regulations set by the Singapore government to licensed moneylenders here. So before engaging with any legal lender, know your rights.
Get Legal Advice From A Lawyer
If you know someone or have extra cash to spare, you can consider getting legal advice from a lawyer. There are lawyers who specialize in loans and finances. You can ask them questions and clarifications regarding loan terms and contracts before signing.
What To Do Once Your Loan Is Approved
Once your loan is approved, the moneylender will give you the principal loan amount. Make sure that they give you the correct amount for the approval fee.
As previously noted, licensed moneylenders can only charge up to 10% administrative fee or approval fee. You must also safely keep all the necessary documents.
- A copy of the loan contract
- Receipts of every payment made towards the loan
- A statement of account for your loan
- Copy of all accounts, receipts, and other relevant documents.
Lastly, pay your monthly installments on time. Keep track of the due date or else, you’ll pay for late fees and late interest. Licensed moneylenders can charge up to 4%. Don’t let your debt snowball since it’ll be harder to pay off.
Conclusion
Unfortunately, there has been an increase in reports of unlicensed money lending activities. This may be due to social media platforms which make it easy for unlicensed moneylenders to impersonate licensed creditors.
That said, do your due diligence. Verify the credibility of a moneylender before working with them. Visit the MinLaw website to find a list of licensed moneylenders.
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