Licensed Money Lender: Complete Guide to Getting A Loan in Singapore

Sudden expenditures can happen at any moment. Sometimes, it comes at the least expected time and catch us and our budget unaware. These expenses oftentimes have to be paid off immediately even if you do not have the budget for it.

When you do find yourself in need of quick funds to pay for these sudden expenses, moneylenders are a godsent since they promise to provide you with the money you need in a snap.

However, like any other product or service in the market, it is important that you scrutinize what exactly are these moneylenders and if getting a loan from them could help you out. 

Here is a brief and comprehensive guide on getting a loan from moneylenders and everything you need to know about them and the entire loan process:

What Should I Consider Before Taking a Loan?

Before you consider which moneylender in the country to speak to with regards to your money problem, it is important that you determine whether a loan is the right solution for your money problem. When you sign in a loan agreement, you cannot easily bail out from it and if you fail to meet the terms, you may find yourself in legal trouble.

To help you determine whether you should take out a loan or not, here are five questions you can ask yourself:

  • What do I need? 

There are many reasons why a person would require extra money from a moneylender or other financial institution. Some may need it to purchase new things for their home. Others may use it to pay off other loans with high interest or a sudden expense. A few may go out for a cruise or purchase luxury items.

As much as possible, loans should not be taken out if it is for luxuries because you are only boosting your debt.

  • How much do I make every month? 

Aside from asking yourself if you need to loan, you should also ask yourself if you have the money to pay it or if you can qualify for it. Moneylenders take into consideration the amount you make every year when determining how much you can borrow. If you earn less than 20,000, you may either get a denied loan application or the amount allowable is less. Your stream of income must also be stable and has been there for a long time.  

  • Do I have a collateral?

In Singapore, there are two categories of loans available: secure and non-secure loans. If you plan to get secure personal loans, you will need to have a collateral or guarantee which the moneylender can claim if you are unable to pay your dues. The collateral can be your car, house title and other similar properties. Unsecured loans, on the other hand, are loans that do not require a guarantee, but they do have a high interest rate. By comparison to secured loans, moneylenders are strict when it comes to requirements for unsecured loans.  

  • What are the interest rates?

A major deciding factor when it comes to getting a personal loan is the interest rates attached to the loan. Ideally, getting a loan with a low interest rate would be great since it reduces the amount you will owe as you service the loan. However, each moneylender varies on their interest rate, so this may warrant further comparison.  

  • Is the loan term flexible? 

Finally, you must also ask and look into the loan terms of each loan offered by moneylender. Even if you want to pay it immediately, there is a possibility you may not be able to do so because there might be sudden circumstances that may prevent you from paying your loans. The loan you must get is a flexible loan that would allow you to renegotiate the loan terms if you are having problems repaying on time.

What Are The Loans Available?

Once you determine that a loan is the right course of action for your monetary problem, you need to pick which loan can help you with your problem.

Loans vary in terms of where it can be used, when it has to be paid, and what terms will be provided. Like banks and other financial institutions, moneylenders offer a wide variety of loans for all eventualities. 

Here are the loans you can avail through Singapore’s approved moneylenders and why these loans should be considered for a specific need:

  • Personal loans

This is the most popular loan offering by Singaporean moneylenders because it has a lower interest rate than that of home loans. These loans can be used for all sorts of financial need: from debt consolidation, car loans to normal bills. It has a fixed interest rate and the repayment amount does not change every month. You may also opt to borrow up to 4 times your average monthly salary and you can repay it early if you desire.

  • Payday loans

This loan permits you to borrow for 30 days a small amount of money with a high interest rate until your payday arrives. It is quite flexible in terms of use and can be availed at any moment. Since you are only borrowing for a short period of time, applications are approved immediately.

  • Foreigner loans

For foreigners living in Singapore, this loan can help them when they are in a financial bind. When applying for this loan, foreigners must submit several documents to prove their current status and a collateral of similar value to the amount being borrowed. While the amount approved is not very large, it has a low-interest rate. Borrowers also do not have to worry about credit record checks when they apply for this loan.

  • Business Loans

Business loans are offered for solo proprietors and businesses of all kinds and must be paid at a certain amount at a specific date. It is a short-term loan that is approved faster than banks. Borrowers can adjust the terms of the loan, especially the repayment terms.

  • Instant Cash Loans

This loan is dependent on the borrower’s income and it has a very high interest rate. However, if the borrower needs the money at once, they only need to show their proof of income and the loan will be given.

  • Cash Advance Loans

Cash Advance loans are similar to payday loans in the extent that borrowers can use before their next salary. However, while many people are qualified for this loan, it has a very high interest rate. Regardless of this fact, the approval rate is very high and it can be availed immediately.

  • Education Loans

This loan is perfect for students and parents who wish to pay for tuition fees and other education-related expenses. It is very easy to apply for this loan since all students are qualified for it. It has a very low interest rate and repayments will only begin after the student graduates or when they have a job. 

  • Renovation Loans

For homeowners who wish to renovate their homes and apartments, renovation loans are perfect for these projects. Considering the nature of the project, borrowers can work with a large loan limit and they can determine the interest rate that will be applied to the loans. You can also determine whether you will pay your loans weekly or monthly.

  • Vacation Loans

If you are going out on a trip overseas or take a long vacation, vacation loans can be used to pay them. When you avail this loan, you will get the money you need for the trip with no hidden charges. You do not have to pay for it until you come back home from your vacation.

  • Short Term Loans

Finally, short-term loans or caveat loans are loans which can be availed by businesses when they need to fix their cash flows and sort out their finances. When applying for this loan, borrowers will be credit checked; but, it is approved within hours and can be adjusted depending on your preferences. Borrowers also do not have to pay an application fee when applying for this loan.

How Do I Apply For Loans?

Now that you know which loan type you will avail; the next step is learning how to apply for the loan you selected.

Borrowers can send their loan applications to licensed moneylenders through call or through their official websites. They may also visit the moneylender’s office directly.

Is It Possible To Get 1-Hour Instant Cash Loans?

Yes! Licensed moneylenders have a reputation for fast approvals and it can take as fast as an hour for them to get back to the borrowers. Borrowers simply have to send their applications and once the applications are received, the loan officer of the licensed moneylenders would contact the borrower for a preliminary interview. When the officer is satisfied, they will ask you to come over to their office with your documents and finalize the loan. This can all happen in the same day depending on when you sent your application. 

What Do I Need For A Fast Approval?

While moneylenders are known for high approval ratings for loan applications and do not look into one’s credit report deeply, they still need to ensure that the borrower is trustworthy before they are allowed to borrow money. 

If you want to increase your chances for faster approval, you must meet the following requirements:

For Local Residents:

  • Must be 18 years old and above
  • Must have their NRIC (National Registration Identity Card)
  • Must submit their most recent payslip or their proof of employment, which must not be three months old.
  • Must provide proof of tenancy, such as billing statements and subscriptions.
  • Must have a bank statement showing your recent salary transactions
  • Must have SingPass for HDB or CPF authentication

For Foreigners:

  • Must present their valid passport
  • Must submit their proof of employment
  • Must submit their most recent payslip
  • Must have a valid work or employment pass
  • Must have a proof of residency
  • Must have a bank statement

What Happens If I Have A Poor Credit?

If you have a poor credit rating or no credit rating at all, it can be frustrating and confusing. Fret not, you can still borrow money from licensed moneylenders in Singapore.

Normally, banks do not approve applications from individuals with bad credit ratings because they are a high-risk client. Those with no credit history are also high-risk clients because they do not have the documentation necessary to prove they can pay what they borrowed.

Moneylenders allow these borrowers to seek their services, but with stricter loan tenures and requirements. The amount they will let you borrow is also small, which may not be prudent if you are seeking to borrow a large amount of money.

How Much Can I Borrow From A Singapore Licensed Moneylender?

In Singapore, licensed moneylenders are regulated and monitored in terms of how much they can lend to a person depending on the loan they applied for and their credit history.

For those who will apply for secured loans, they can borrow as much as they can provided that they have a collateral that the moneylender can collect in case the loan cannot be paid.

For those who will apply for unsecured loan, licensed moneylenders can grant the following amount:

  • If the annual salary is below $20,000, only $3,000 can be borrowed.
  • If the annual salary is above $20,000 but less than $30,000, the total of 2 months’ income can be borrowed.
  • If the annual salary is around $30,000 to $120,000, the total of 4 months’ salary can be borrowed.
  • If the annual salary is above $120,000, you can borrow any amount you wish.

Additional fees would also be deducted or added to the borrower’s loan tenure no matter which loan they availed. A 10% deduction would be applied to the loan principal you will receive.

If the borrower pays late, a fee of $60 or less is charged. If the moneylender has to seek legal intervention for defaulted loans, the borrower will also be the one to pay the costs.   

What Are The Interest Rates Moneylenders Can Charge?

Aside from the amount a person can borrow from licensed moneylenders, the interest rates they can apply to all loan offers are mandated under Singaporean law. As of 2015, the Effective Interest Rate or EIR is computed based on the frequent payments done within the year for the loan and showcase how much is the loan worth within a year.

  • If the annual salary is less than $30,000, the EIR for secured loans is 13%
  • If the annual salary is less than $30,000, the EIR for unsecured loans is 20%
  • Every month, a 4% interest rate is charged regardless of the borrower’s income and the type of loan they borrowed.
  • For defaulted loans, the maximum interest rate that can be charged is 4% every month.
  • For late payments, the interest is only added to the amount you were unable to pay that month.
  • For skipped payments, the interest for the late payment will be added to the payment month you skipped.


Before you go seek out a moneylender when you find yourself in a money dilemma, it is important that you take time to research what you are getting yourself into. Loans are a very serious financial decision and must not be taken lightly. With this guide, we hope that you will be able to make the right decision when you find yourself in a financial bind and help you plan accordingly when you need a loan.