Things to Know Before Borrowing Money in Singapore


About 240 people in Singapore were arrested in 2020 for harassing people after lending them money without a licence. A news article published in December 2021 reported that 189 people between 12 and 78 years were involved in unlicensed money lending activities. There are significant risks associated with borrowing money from private lenders without doing the necessary analysis first. And yet, people, both residents and foreigners in the country, keep falling prey to unscrupulous activities. One of the components of proper research is a moneylender list, which contains details like their contact address, phone number, and business URL. The list is released by the Ministry of Law, which ensures lending and borrowing is done according to the Money Lending Act. But why do you need a list, and how can it help you?

Things to Know Before Borrowing Money in Singapore

Why does the government release a list?

The Government of Singapore seeks to arrest fraudulent activities related to money lending. They release a list of valid lenders registered in the country to achieve that objective. It is advisable that you borrow money from those businesses whose names are found on the list. Any individual who wishes to carry out money lending business in Singapore needs to have a proper and updated licence unless they are “exempt or excluded” under certain circumstances. The latest list released by the government shows there are 156 authorized lenders without any suspended ones.

How to choose a lender?

Number of stars

Even though 156 money lenders in Singapore are legally authorized to lend money, not all will have the same popularity amongst customers. It is advisable to go with those lenders that have been awarded at least four stars. They should understand the type of loan you want and process it quickly. The staff should be attentive, helpful, and professional and assist you with the entire process, including the documentation. You could also check the number of reviews they have and whether those have been updated or not. Another option is taking the help of loan expert websites to help you compare and find the most suitable loans by providing you with the rating, reviews, and other necessary details.

What type of loan do you need?

Before choosing a lender, you should first understand what type of loan you need. Some of the loan types provided by authorized lending companies in Singapore include personal, bridging, payday, foreigner, and business. Not all the companies could offer the same options, so that’s something you should consider beforehand. It would be naive to borrow an amount that exceeds your current requirements.

Get a credit report beforehand

Regardless of the type of loan you might be taking, it’s advisable to have a credit report beforehand. A credit report contains details about your credit activity, like loan paying history and the current status of credit accounts. Although not all money lending businesses in Singapore will require you to produce a credit report, some might not approve it if you have a bad rating. According to the Ministry of Law, lenders are within their rights to assess your creditworthiness by obtaining a credit report released by the bureau.

Are you eligible for the loan?

The Ministry of Law has clear rules and guidelines regarding the amount of money you can borrow for unsecured loans. If you are a citizen of Singapore with an income of less than 10,000 SGD$ or at least 10,000 SGD$ and less than 20,000 SGD$, you will be eligible to receive a loan of 3,000 SGD$. If you have an income of 20,000 SGD$, you can borrow an amount that is six times your monthly income. However, if you are a foreigner and your income is less than 10,000 SGD$, you will be allowed to take 500 SGD$ as a loan, and if you earn between 10,000 to 20,000 SGD$, you will be entitled to a borrowing sum of 3,000 SGD$.

What are the interest rates and fees?

According to the law related to money lending in Singapore, lenders cannot charge an administrative fee of more than 10% of the loan principal, while the interest rate cannot exceed more than 4% per month. If there is a late fee, it should not be more than 60 SGD$ in a month.

Do they have a license?

All lenders must possess a license in Singapore issued by the Ministry of Law. The only exceptions are exempt and excluded moneylenders that have to pay an application fee and obtain a certificate for exemption. You should also ensure that you receive a copy of the loan contract that both you and the lender have signed.

These are a few tips that will assist you while borrowing money in Singapore. Besides checking the moneylender list issued by the Ministry of Law, it is essential to pay attention to the information mentioned above. After all, you can never be too careful when it comes to borrowing money.


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