Borrowing from licensed money lenders in Singapore? Here’s your ultimate loan guide 2022

Borrowing from licensed money
lenders in Singapore?
Here’s your ultimate loan guide 2022



By Hijanah Hernandez

Taking a loan from a licensed money lender can be an intimidating process. Apart from getting the best interest rates and finding a lender you can trust, there is a lot of other information and fine print to be aware of so you know exactly what you are getting into.

Wondering what are the interest rates, hidden fees or borrowing processes you need to take note of? Also, what are the differences between taking a loan from the bank and from a licensed money lender?

In this ultimate loan guide, we address these questions and more, so read on!

What is a licensed money lender?

Licensed money lenders are registered loan companies that are legally allowed to lend money.

These approved money lenders in Singapore are registered with the Ministry of Law’s registry and are obliged to follow MinLaw’s guidelines. These guidelines are updated regularly, under the Moneylenders Act. You can find more information on the licensed money lenders’ regulations here.

Here is a list of licensed moneylenders in Singapore.

Differences between borrowing from private money lenders and banks

There are differences when you try to take a loan from a bank and from a licensed money lender.
These vary, from differing regulations to interest rates.


Loan limits & income requirements

When it comes to unsecured loans, banks generally allow you to borrow a maximum of 10 times your monthly income. With that said, if you earn less than $20,000 a year, a bank will reject your loan application.

The amount of money you can borrow from money lenders may vary, but even the top licensed money lender will have to adhere to Singapore’s legal regulations.

The maximum amount of money you can borrow through an unsecured loan is as follows, across all licensed money lenders in Singapore.

If your annual income is less than $10,000

  • A maximum of $3,000 if you’re Singaporean/PR
  • A maximum of $500 if you’re a foreigner residing in Singapore

If your annual income is between $10,000 and $20,000

  • A maximum of $3,000 whether you’re Singaporean/PR, or a foreigner residing in Singapore

If your annual income is at least $20,000

  • Up to 6 times your monthly income whether you’re Singaporean/PR, or a foreigner residing in Singapore


Credit history

If you have a bad credit history or an unstable income, it is highly likely that a bank will reject your loan application.

Licensed money lenders, on the other hand, offer more leeway, and you can still get your loan approved even with bad credit history, usually at a higher interest rate.


Repayment period

While banks generally give you up to 5 years to repay your loan, a licensed money lender in Singapore may only give you a repayment period of a maximum of 12 months.

Other loan terms may vary based on the legal money lender, but most lenders offer a repayment period of one to six months. A good licensed money lender may offer you a repayment period of up to 12 months.


Speed of loan approval

If you’re in search of a fast cash loan or an instant loan, you might have a better bet with a licensed money lender. A licensed money lender can offer instant approval with funds disbursed to you within a day, while banks can take up to two weeks to approve a loan application.


Interest rates and fees

Banks’ interest rates on a loan can vary from 3.5% to 11% per annum, while a licensed money lender’s interest rates vary from 1-4% monthly.

Any licensed money lender in Singapore can only charge you a maximum of 4% in interest, monthly. They can also only charge a maximum late interest of 4% a month, for each month that your loan is repaid late. 

Money lenders who charge you a higher interest than this on a monthly basis are usually unlicensed, as licensed lenders can only charge you a maximum of 4% interest a month.

Keep this in mind diligently when you are looking for a licensed money lender. You can compare loan rates to find the lowest interest rates at an authorised money lender in Singapore!

For a bank, the total amount in processing fees and interest can add up to a maximum of 6.5% to 20% of your principal loan amount. Moneylenders’ processing fees, on the other hand, can add up to a maximum of 10% of your principal loan amount.

Interested to apply for a loan with the best online money lender?

How do I tell an illegal money lender in Singapore apart from one with a money lender license?

There are also other methods of verification you can use to make sure the companies you’re speaking to are reliable money lenders. That’s because unlicensed lenders could be pretending to be licensed money lenders. Here’s what you can do:

First, call the office landline of the licensed money lender to verify that it’s a legitimate number. You should obtain this number from the Ministry of Law’s list of licensed money lenders. 

You should also ensure that the money lender has a physical office. Licensed money lenders are legally not allowed to complete processing a loan application online without face-to-face verification or interview before disbursing the loan amount to you. This is a good opportunity for you to make sure they are a legitimate business and check their money lender license.

You can also look for reviews of the licensed money lender on Google, social media, and online forums by searching for terms such as “money lender singapore review”. This will give you a sense of how reliable or professional the lender is.

What are the pros and cons of taking a loan from a private money lender?

There are numerous pros to taking a loan from a licensed money lender.

  • You can rely on them to be quick money lenders, with instant approval as fast as 30 minutes.
  • Easier loan applications with minimal documents required.
  • Funds will be disbursed by cash or bank transfer immediately after the loan contract is signed
  • No financial discrimination, you can get a loan even if you have bad credit history
  • Loans offered by licensed money lenders can be up to 6 times your monthly income
  • With a maximum repayment of 12 months, this makes them an ideal choice if you’re looking for a fast small loan that you can repay fast

On the flip end, there are also cons to borrowing from licensed money lenders.

  • High interest rates of up to 4% a month or 48% per annum
  • High late interest rates of up to 4% a month or 48% per annum
  • Late interest fees of up to $60 a month (for each month of late repayment)

There are also legal limits on late fees and charges that an SG money lender might charge. If you encounter otherwise, you may be dealing with an illegal money lender or a loan shark. You should report the lender to the police in any such instance. 

The total charges and fees from a licensed money lender, including interest, late interest, upfront fees, and late fees should not exceed the principal loan amount that you are borrowing from the licensed money lender. For example, if you are borrowing $5,000 from a licensed money lender, the total amount of your late fees, processing fees, interest, late interest, and any other charges should never ever add up to more than $5,000. 

If you default on your loan and discontinue payments, a licensed money lender may take legal actions. If they are able to make a successful claim from you in court, you may also need to repay the money lender’s legal costs, ordered by the court. 

With that said, a reasonable money lender is unlikely to take negotiations on your loan to court, as long as you communicate your struggles with them and work out a new payment schedule.

How do I know if an SG money lender is right for me?

You might have found the best licensed money lender in Singapore, but that doesn’t mean they are the best option for you. 

Determine whether a money lender is the right fit by checking loan contract terms and conditions, ensuring they are what you have agreed to. If there’s anything you are not sure of, make sure to clarify and get the answers you need. 

You should also ensure that your licensed money lender communicates well with you. They should be polite and responsive. 

Keep an eye out for any bad press around the money lender you’re working with. Any misconduct tends to make headlines, and they are good indications that you should steer clear of these and consider other options.

Synergy Credit is an established licensed money lender since 2009, and we are highly trusted by more than 1,900 customers.

Navigating interest rates, fees, and loan terms by a legal money lender in Singapore

What types of loans can I take from money lenders?

Licensed money lenders offer many types of loans that cater to a variety of needs. Personal loans are one such offering, and this can mean many things – from study loans, wedding loans, and vacation loans, medical loans, renovation loans, investment, credit card debt consolidation loans, and property bridging loans. 

If you are Singaporean and are employed or self-employed, you will most likely qualify for a personal loan. And if you’re a foreigner in Singapore, you can also take a loan if you’re living and working in Singapore. 

Some licensed money lenders also offer business and working capital loans that can help you grow your business and attain the resources that you need.

Cannot find a loan you need? We can customise loans that cater to your needs.

Secured vs unsecured loans – What are the differences?

Secured loans are loans pegged to a collateral or asset. For example, a home loan may be pegged to the home that you are purchasing. In the event that you default on secured loan payments, a lender can repossess your collateral. In the case of a home loan, the lender may be able to seize your home.

When it comes to secured loans, you can only borrow according to the following limits:

Maximum of 55% of your Total Debt Servicing Ratio (TDSR – portion of your gross monthly income that goes toward repaying your loans)

For HDB and EC loans – maximum of 30% of your Borrower’s Mortgage Servicing Ratio (MSR – portion of your gross monthly income that goes toward repaying any property loans)

For car loans – maximum of 60-70% of the market value of the vehicle, including taxes and COE price of vehicle

Unsecured loans, on the other hand, do not require any collateral to be pledged. While this may contribute to a less stressful loan journey for you, it also means that there is higher risk undertaken on the lender’s end when they are lending you money. And so, unsecured loans tend to have higher interest rates to account for that increased risk. 

The maximum amount of money that you can borrow may also vary depending on whether you’re taking a secured or unsecured loan.

How do licensed money lenders calculate interest?

Licensed money lenders typically use reduced balanced interest rates. This means that your loan’s interest is calculated based on the outstanding loan amount at the end of a specific period, whether monthly or annually. Essentially, the amount of interest you pay reduces as time progresses. 

This is different from a flat interest rate, which is calculated once, based on the full principal amount of your loan. 

Here’s an example of how a $5,000 loan might look with a repayment period of 6 months and a reducing balance interest rate of 3% a month.

Month Outstanding loan amount payable this month Interest amount payable this amount (3%) Total amount payable this month Balance amount remaining on principal loan
#1 (January) $772.99 $150 922.99 $4,227.01
#2 (February) $796.18 $126.81 922.99 $3,430.83
#3 (March) $820.07 $102.92 922.99 $2,610.77
#4 (April) $844.67 $78.32 922.99 $1,766.10
#5 (May) $870.01 $52.98 922.99 $896.09
#6 (June) $896.09 $26.88 922.99 $0.00

In this instance with a reduced balance interest rate, you’d only have spent $537.92 on loan interest. On the other hand, with a flat interest rate of 3% monthly on $5,000, you’d have spent a total of $900 on loan interest.

With a reduced balance interest rate in this scenario, you’d only have had to repay $922.99 monthly, whereas a flat rate would have meant you’d repay $983.33 monthly to clear your loan.

Interested to find out what interest rates we can offer you?

How to apply for a loan with the best money lender Singapore?

During the loan application period, your money lender may require a variety of documents from you. If you’re working with a Singapore online money lender, having these documents ready might mean you can get your loan application approved almost instantly, and later disbursed.

With Synergy Credit, you can complete a fast and easy online loan application in as fast as 5 minutes.

Here are the steps in a loan application process


Apply for the loan online


A loan executive will call you to confirm your loan application. You’ll be invited to head to the money lender’s office for a short interview to understand your financial situation and to do document verification.


If there are no issues, your loan application can be approved within 30 minutes.


Loan executive will share the loan terms with you and explain the loan contract to you.


Once you sign the loan contract, the funds will be disbursed to you instantly.

Interested in applying for a loan with us?

How to get your loan approved with lowest interest rates from the best money lender in SG

1. Have documentation ready

The documentation you will need may vary based on your employment status and citizenship status. You can rest assured with peace of mind knowing that licensed money lenders are obliged to comply with the Personal Data Protection Act (PDPA). 

Here is what to have on hand:

  • If you are employed (Singaporean/PR):
    Prepare your IC, CPF contribution statements and your payslips from the last three months (if your monthly salary is more than $6,000).
  • If you are self-employed (Singaporean/PR):
    Prepare your IC, a Notice of Assessment (NOA) from IRAS, proof of income (bank statements, commission statement, etc)
  • If you’re a foreigner residing and working in Singapore:
    Prepare your employment pass, proof of your home address and your payslips from the last three months.
  • If you’re looking to take a business loan:
    Prepare latest 6 months’ bank statements, the constitution of your company, the ICs and NOAs of the major shareholders and directors, a copy of your tenancy agreement and other documents such as Bizfile and credit report with Credit Bureau Singapore (CBS).

Read more about taking a fast unsecured business loan here.

2. Maintain a good credit score

To get yourself the most promising interest rates from licensed money lenders, make sure to repay your loan on time and avoid getting too close to your credit limit. Make sure to only apply for the credit that you need. 

Check out these other important criteria to get a personal loan in Singapore.

Other things to keep in mind when looking for the best licensed money lender in Singapore

It can be stressful to manage multiple loans, so be careful and stay on top of your financial situation and keep track of outstanding payments to avoid getting caught in a debt cycle.

1. Stay wary of illegal money lenders

  • Licensed money lenders may let you apply for loans online anytime, but tend to not operate their offices 24 hours

2. If you unable to pay a money lender in Singapore

3. If you can’t qualify for any loans


Regardless of your financial situation, we will do our best to help you reach your financial goals and find the best solution for your needs. Our application process is simple and fast, and we offer affordable interest rates too.