All You Need to Know About Licensed Moneylenders in Singapore


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Introduction to licensed moneylenders in Singapore

#1. Introduction to licensed moneylenders in Singapore

When you’re living in one of the most expensive countries in the world, being short of cash can be an issue for many, especially when you have to pay off essential bills like your monthly mortgage or hospital fees.

In these cases, many may turn to apply for a loan from a bank, but local banks tend to have a long processing time and stringent rules. For borrowers looking to get an instant cash loan, a licensed moneylender is your best bet.

Licensed moneylenders in Singapore are regulated by the Ministry of Law and have to adhere to the Moneylenders Act when conducting their business. They are always registered under the official Registry of Moneylenders with a unique license number that shows their legitimacy.

How to avoid loan scams by illegal moneylenders in Singapore

#2. How to avoid loan scams by illegal moneylenders in Singapore


With the rise of loan scams in Singapore, it’s important to differentiate between illegal and approved moneylenders. To avoid money lender scams, it is recommended to check the money lender license before proceeding with any loan application. Here are some other ways to identify a possible scam.


Licensed Moneylender

Illegal Moneylender

Has a registered moneylender license number in the Registry of Moneylenders

Does not have a registered license number

Has a registered physical office address

May not have a physical address

Must include a face-to-face interview in the lender’s office before the money is disbursed to you

Will usually request an entirely remote or online loan application process and loans can be disbursed without meeting face-to-face

Only allowed to advertise on their websites, consumer or business directories, and at their registered offices

May advertise through SMS, WhatsApp, Telegram, emails, unsolicited calls

Prohibited from threatening clients. Licensed moneylender harassment could result in loss of license

May use threats, harassment, and violence as a method for debt collection

Here are some other ways you can identify a licensed moneylender, as well as prohibited practices that may be a sign that the lender may be illegal.

It’s important to read up about licensed moneylenders in Singapore so you can better identify a good one and avoid scams. At Galaxy Credit, we share our knowledge with readers on our blog so they can make informed decisions. Check it out below.

Banks vs licensed moneylenders in Singapore

#3. Banks vs licensed moneylenders in Singapore

While it is always recommended to attempt a loan with a bank first, a trusted licensed moneylender can also be a reliable option.

It is a known fact that banks are more affordable as private moneylenders’ interest rates can be pricey for many. However, not all candidates may get their bank loans approved and that is when authorised moneylenders in Singapore may be of help.

For a clearer understanding of the differences between a bank and a moneylender, here’s a breakdown of what they offer.



Licensed moneylenders

Provide loans up to 12 times monthly income

Provide loans up to 6 times monthly income

Minimum annual income requirement for Singaporeans & PR: $20,000

Minimum annual income requirement for foreigners: $45,000

Will offer loans to borrowers with an annual income of less than $10,000

Average interest fee of 3.5 – 11% per annum

Interest fees can range from 1 – 4% per month

Repayment period of up to 5 years

Repayment period of up to 12 months

Requires a good credit score for loan approval

Does not require a good credit score

Allows online loan applications

Loan applications can be done online, but face-to-face verification in the lender’s office is still required before a loan is disbursed.

Why you should approach a legal moneylender in Singapore

#4. Why you should approach a legal moneylender in Singapore


Fast approvals

Borrowers can make an inquiry with a Singapore online moneylender on the website, visit the branch office for a short interview, and collect their loan in a single day. An in-person application at the lender’s office can be completed in less than 30 minutes.

Bank applications usually take a few days or more.

Less strict on credit scores

Licensed moneylenders usually do not check borrowers’ credit scores when approving a loan. Borrowers with bad credit scores can still get their loans approved, but usually at higher interest rates.

Banks will not accept borrowers with a bad credit score.

Flexible loan agreement

If you require an extension on your loan, you can negotiate your loan terms and fees with your lender.

Banks have a fixed late fee that is non-negotiable.

When you should NOT approach a moneylender in Singapore

#5. When you should NOT approach a moneylender in Singapore


While private moneylenders in Singapore are a great option for those looking for a quick loan with a bad credit score, not all borrowers are suitable to take a loan from one.

You should not approach a moneylender in Singapore if:


You are unable to pay on time

While it is advised to never miss any of your payments whether you are borrowing from a licensed moneylender or a bank, the consequences are much higher if you’re unable to pay a moneylender in Singapore.

Private moneylenders have high interest rates and even higher late fees as these enterprises have a higher risk when running their businesses compared to banks.

Unfortunately, this can greatly affect borrowers who have a history of late repayment and long-term debt. If you tend to defer your payments, work on managing your finances before approaching a licensed moneylender.



You have a good credit score

Legal moneylenders are usually an option for those with a bad credit score as they are less strict on borrowers’ credit scores. If you have a stable monthly income and a good credit score, it is recommended to apply for a loan with a bank as they generally have much lower interest rates that will help with your finances in the long run.

Here’s how you can obtain your credit report with Credit Bureau Singapore (CBS).



You have multiple loans and want to take another

To manage your finances well, you should never apply for a loan that exceeds your financial capabilities. Reaching out to various lenders for multiple loans may also increase the responsibility and stress of repaying them. This could lead to you deferring your payments and landing yourself in even bigger debt, especially with the high interest rates and fees of moneylenders in Singapore.

However, if you have multiple loans, the only loan that might be suitable for you is a debt consolidation loan. A debt consolidation plan with a moneylender helps you combine all your loans into a single loan with a single lender, often with a lower interest rate, which would be much easier to manage and repay.

What to enquire with licensed moneylenders in Singapore to avoid being overcharged

#6. What to enquire with licensed moneylenders in Singapore to avoid being overcharged

Licensed moneylenders can charge their borrowers through several means: interest rates, late interest rates, late repayment fees, and administrative fees.

It’s important to go through your contract and loan terms thoroughly and be aware of the possible fees you can be charged. Take note of your payment date to avoid incurring extra late charges. Under the Ministry of Law, licensed moneylenders have a cap on the fees they can charge. Make sure your borrower is not overcharging you by referring to the table below.


Chargeable fee

Maximum charged

Interest rate

4% per month (48% p.a.)

Late interest rate

4% a month (48% p.a.) for the amount that was not paid on time, excluding the remaining loan amount

Late repayment fee

$60 for each month of late repayment

Administrative fee

10% of the principal loan amount

In total, the sum of all charged fees cannot exceed the principal loan amount.

Have a question about taking a loan?

The different types of loans licensed moneylenders offer

#7. The different types of loans licensed moneylenders offer

Licensed moneylenders offer both secured and unsecured loans. Secured loans are often used for vehicle and property purchases while unsecured loans are more flexible if you are taking a personal loan – this can be used for personal reasons including credit card bills, renovation, or student fees.

Secured loans also require collateral (such as a car or property) to be pledged, which can be seized by the lender if the borrower is unable to pay off their loans.

If you’re deciding between a secured and unsecured loan, here are the differences between the two:



Has a bigger loan amount with lower interest rates

Has a smaller loan amount with higher interest rates

  • The borrowing limit for home loans and car loans is subject to a maximum TDSR of 55%.

  • HDB and EC loans are subject to an MSR of 30%.

  • Car loans’ LTV is kept at a maximum of 60-70%.

Has a borrowing limit depending on the borrower’s income and citizenship

Requires declaration of collateral

Does not require collateral

Fixed loan use for vehicle/property purchase.

Flexible loan use (if personal loan)

Easier to obtain even with bad credit history

Easier to get with a favourable credit history

May take a few more days to process

Fast loan disbursal, can be done under 30 minutes if all documents are in order

How to apply for a loan with a legal instant moneylender in Singapore

#8. How to apply for a loan with a legal instant moneylender in Singapore


Before applying for your loan, remember to compare moneylenders and their different rates as well as loan tenures and repayment schedules. Loans with lower interest rates are not necessarily the best – because if loan tenures are short, it means a higher repayment amount per month.

So pick one with an interest rate, loan tenure, and monthly repayment amount that is comfortable for your situation and needs.

Reasons why moneylenders may reject your loan

#9. Reasons why moneylenders may reject your loan


There are times when a borrower may submit the required documents but still get their loan rejected. Here are some reasons why this could happen:


You do not have an income

When applying for a loan with a moneylender, you will be required to prove you have a steady source of income. Without one, you will be considered a risky borrower who may not be able to repay your loan. Even the best licensed moneylenders in Singapore will not take such a risk, so always prepare the needed documentation that proves you have a regular source of income.

Your income does not need to come from full-time employment. It could also come from various part-time jobs or even rental income.


You deferred your past loan repayments

While moneylenders may not access your credit score during the loan application, they will check your borrowing history with other lenders through the Money Lenders Credit Bureau (MLCB).

If you have an unfavourable history of deferring past loan repayments, future lenders may not take the risk of offering you a loan.


You applied for too many loans within a short time frame

Lenders will also be able to check the number of loan applications you have made with other moneylenders through MLCB, and when a borrower has applied for several loans in a short time, this is usually a red flag for the lender.

Lenders avoid such clients as borrowers who have multiple loans have a higher risk of deferring their loan repayments.


You have filed for bankruptcy

If you are unable to pay off your past loans, you may have been advised to file for bankruptcy. However, filing for bankruptcy can impact your financial future including applying for any loan.


A past lender has taken legal action against you

Licensed moneylenders can file for litigation against their borrowers if they are unable to repay their loans. In such cases, the borrower’s legal history will be on record and other lenders will be able to access them. If a lender has taken legal action against a client, future moneylenders are more likely to avoid them.

Apply for a loan with the best licensed moneylender in Singapore

#10. Apply for a loan with the best licensed moneylender in Singapore

At Galaxy Credit, we offer flexible personal loans including medical, business, and study loans.

We provide instant loans for emergencies and pride ourselves as a reliable and competitive loan solution provider.

Keen to apply for a loan? Drop us a loan enquiry and we will get back to you within one working day.