Loan FAQs

To verify if a moneylender is licensed in Singapore, you can check the latest list provided by the Ministry of Law (MinLaw). MinLaw updates a list of licensed moneylenders monthly, which is available in PDF format on their official website. By accessing this list, you can ensure that the moneylender you are considering is duly licensed and authorized to operate legally in Singapore. It's advisable to refer to the most recent version of this list to confirm the licensing status of any moneylender you are dealing with.

The amount you can borrow from a licensed moneylender in Singapore depends on your annual income:

For individuals with an annual income of less than $20,000: You can borrow up to $3,000.

For individuals with an annual income of $20,000 and above: You can borrow up to 6 times your monthly income.

These borrowing limits are set by the Ministry of Law (MinLaw) to ensure responsible lending practices and to protect borrowers from taking on excessive debt. It's essential to carefully consider your financial situation and ability to repay before borrowing from a moneylender. Always choose licensed moneylenders and verify their credentials to avoid unscrupulous practices.

Interest Rates and Fees: Understand the total cost of borrowing, including interest rates and any additional fees charged by the moneylender.

Repayment Terms: Review the repayment schedule, including the frequency of payments and any penalties for late payments. Ensure that the repayment terms are manageable within your financial means.

Credibility and Licensing: Verify that the moneylender is licensed by checking the Ministry of Law's list of licensed moneylenders. This ensures legitimacy and adherence to regulatory standards.

Loan Amount and Eligibility: Assess your eligibility for the loan based on income requirements and the loan amount offered. Borrow only what you need and can comfortably repay.

Alternative Options: Explore alternative sources of financing, such as banks or credit unions, which may offer more favorable terms and lower interest rates.

Purpose of the Loan: Have a clear purpose for the loan and ensure it aligns with your financial goals. Avoid borrowing for non-essential expenses or unnecessary purchases.

Loan Contract: Carefully read and understand all terms and conditions outlined in the loan agreement before signing. Seek clarification on any unclear points and ensure you agree with all provisions.

Financial Planning: Consider the impact of the loan on your overall financial situation. Create a budget to manage loan repayments alongside your other financial obligations.

Interest rates and fees charged by licensed moneylenders in Singapore can vary, but they are regulated by the Ministry of Law. As of the latest regulations:

Interest Rate: Moneylenders are capped at charging a maximum interest rate of 4% per month.

Late Interest Rate: If repayments are not made on time, moneylenders can charge a late interest rate of up to 4% per month for each month the repayment is late.

Late Fee: In addition to late interest, moneylenders can charge a late fee of $60 for each late repayment.

Admin Fee: Upon loan approval, moneylenders can charge an administrative fee not exceeding 10% of the principal loan amount.

Before taking a loan, it's crucial to carefully review and understand the interest rates, late interest rates, late fees, admin fees, and any other charges associated with the loan. Comparing offers from different licensed moneylenders can help you find the most competitive rates and terms that suit your financial needs.

The loan processing with licensed moneylenders usually follows these steps:

Application: You start by filling out an application form provided by the moneylender. This form will require personal information, income details, and the amount you wish to borrow.

Documentation: You need to submit necessary documents such as identification (e.g., NRIC or passport), proof of income (e.g., payslips or CPF statements), and any other required documents specified by the moneylender.

Assessment: The moneylender will assess your loan application and documents. This includes verifying your income, credit history, and determining your repayment ability.

Loan Offer: If your application is approved, the moneylender will present you with a loan offer detailing the approved loan amount, interest rate, repayment schedule, fees, and terms and conditions.

Agreement: Upon agreeing to the loan terms, you'll sign a loan agreement with the moneylender. It's crucial to read and understand all terms before signing.

Disbursement: After the agreement is signed, the loan amount will be disbursed to you. This may be done through a bank transfer or a cash disbursement, depending on the moneylender's procedures.

Repayment: You are responsible for making repayments according to the agreed schedule. This includes paying the principal amount borrowed plus interest and any applicable fees.

Throughout the process, it's important to choose a licensed moneylender, understand all terms and conditions, and ensure you can comfortably manage the loan repayments. Always compare offers and consider alternative financing options before making a decision.

When taking a loan from a licensed moneylender, here are several important points to consider:

1. Licensing and Legitimacy: Ensure the moneylender is licensed and regulated by the relevant authorities. Check for their registration details.
2. Interest Rates: Understand the interest rates being offered. Compare them with other lenders to ensure you’re getting a fair deal.
3. Loan Terms: Read the terms and conditions carefully. Pay attention to the repayment schedule, any fees, and penalties for late payments.
4. Total Repayment Amount: Calculate the total amount you will need to repay over the course of the loan. This includes principal and interest.
5. Hidden Fees: Be aware of any additional charges, such as processing fees, late fees, or early repayment penalties.
6. Repayment Capacity: Assess your ability to repay the loan on time. Consider your monthly income and expenses.
7. Documentation: Prepare all necessary documentation required for the loan application, such as identification, proof of income, and any collateral if required.
8. Scams and Fraud: Watch out for scams. If a lender seems too good to be true or pressures you to sign quickly, proceed with caution.
9. Customer Reviews: Research the moneylender's reputation through customer reviews or testimonials to gauge their reliability and service quality.
10. Consultation: If needed, seek advice from financial advisors or trusted individuals before making a decision.
    Taking these steps can help ensure you make a well-informed choice when borrowing from a licensed moneylender.

To take a loan from a licensed moneylender in Singapore, you typically need to meet the following requirements:

Age: You must be at least 21 years old.

Residency: You should be a Singaporean citizen, permanent resident, or a foreigner with a valid work pass.

Income Proof: You may need to provide proof of income, such as payslips or bank statements. The minimum income requirement varies by lender.

Identification: A valid form of identification, such as a Singapore NRIC or passport, is required.

Credit Assessment: The lender will assess your creditworthiness, which may involve checking your credit history.

Loan Purpose: Some lenders may ask for the purpose of the loan.

Repayment Capability: You should demonstrate that you have the ability to repay the loan, which could involve providing information about your financial situation.

Always check with the specific licensed moneylender for any additional requirements or documentation needed!