Borrowing From Licensed Money Lenders – How Much Can I Borrow?


Borrowing money can be a difficult undertaking if you are unaware of the lending limits supplied by different types of money lenders.

There are many licensed lenders you can borrow from.

Some offer larger loan amounts than others, based on your credit history from the Moneylender Credit Bureau and your monthly income.

When deciding to borrow money from any of the licensed money lenders, it is essential that you understand their lending eligibility criteria and your borrowing limit.

This will help you to apply for a secured or unsecured loan amount with the understanding of whether or not your application will be accepted.

This article will help you learn more about how much you can borrow from money lenders in Singapore.

What To Consider Before Taking Up A Loan

After your loan application has been approved, you should know that any loan contract you sign with a licensed money lender is legally binding.

Consider whether you can meet the contractual terms in light of your income and financial responsibilities.

Be aware that if you fail to meet the loan installments, you will be charged late payment penalties, which will put more financial pressure on you.

So shop around for the best terms from various money lenders. You should not commit to a loan until you are completely satisfied with its terms and conditions.

Licensed money lenders are required by law to explain loan terms to you in a language you understand and to give you a copy of the loan contract.

Make sure that you fully understand the contract’s terms, notably the repayment schedule, interest rate, and fees.

Differences Between Licensed And Unlicensed Money Lenders

Not all money lenders that advertise for loans are legal entities.

If fact, many of them could be loan sharks, or unlicensed money lenders. Some money lenders may be licensed but yet are operating contrary to the law.

Hence, it is important to know that there are a lot of differences between licensed and unlicensed money lenders. Here are some ways to differentiate the two.

Licensing By Registry Of Moneylenders

The simplest way to determine if a money lender is licensed or not is to check the list of licensed moneylenders in Singapore.

The Registry of Moneylenders, which is under the Ministry of Law (MinLaw) has a list of licensed money lenders that it updates regularly.

By referring to this list, you can avoid blacklisted money lenders when applying for a personal loan in Singapore.

Aside from ensuring that the lender’s license is still valid, you should also research and read customer reviews about its services.

Channel Of Advertisements

If a money lender offers you loans over the phone or over text messages, you’re most likely dealing with an unlicensed money lender.

According to MinLaw, licensed money lenders can only advertise their loans through business directories or their own websites.

They can also have posters displayed within and around their place of business.

Fees And Interest Rates

A licensed money lender adheres to the Registry of Moneylenders’ set interest rates and fees.

Moneylenders are permitted to charge a maximum interest rate of 4% per month on the amount borrowed.

Licensed money lenders are not allowed to charge more than $60 overall for late payment fees.

Physical Address

As mentioned, the Registry of Moneylenders maintains an updated list of licensed money lenders.

If a lender has a physical business address, you will know it is a licensed money lender.

This is where you will go to contract your loan application and for the lender to verify your identity in person.

Because of technological advancements, it is now popular for money lenders to facilitate an online application.

However, going down to the office of a licensed money lender for a one-on-one verification remains a crucial process.

Face-To-Face Verification

Before a licensed money lender can make a loan disbursement, a face-to-face verification is required.

If you only receive an email or a text message from a lender stating that your loan has been approved, that’s a major red flag.

In addition, an unlicensed money lender will not provide you with adequate information about the loan contract – or there may not be a loan contract at all.

Threatening Actions

Licensed money lenders would never bully, blackmail, or threaten to destroy or seize your property.

A licensed money lender cannot confiscate any of your property without a Writ of Seizure and Sale. It also will not resort to damaging property – be it vandalism in public places or on your own property.

Moneylenders Act and Rules Singapore

The Moneylenders Act and Rules is a framework of legal money lenders rules imposed by the Singapore government to protect borrowers against predatory lending practices.

The Act directs that no one may engage in any form of money lending business unless he obtains a valid licence given by the commissioner.

A license is a must under this legislation for each money lender’s branch that conducts lending activities, meaning each branch must have its own license.

Before giving credit or engaging in any loan agreement, each money lender must take reasonable care to ensure that the borrower is financially capable of repaying the loan, regardless of whether it is secured or not.

The Act is the primary piece of money lender’s rules designed to protect borrowers from predatory lenders. It specifies the operations, interest rates, permissible fees, and procedures that each lender must follow.

The Registry of Money Lenders, which licences all firms intending to establish themselves as money lenders in Singapore, is also in charge of enforcing the Act.

Differences Between Borrowing From A Licensed Money Lender And Bank

A unique feature of licensed money lenders is that they often offer only small loans.

This is because they are often small firms that cannot risk losing millions if a borrower fails to repay.

Licensed money lenders also issue loans based on your salary. This might range from hundreds of dollars to a few thousand dollars. Banks, on the other hand, lend personal loans of over $10,000.

After your application has been received, your loan may get approved and disbursed in minutes with a licensed money lender, but it would take days, if not weeks, for banks due to their rigorous checks.

Legal money lenders also don’t rely so much on your credit history to determine your ability to pay.

Unlike money lenders, banks usually only provide personal loans to Singaporeans or permanent residents who have an annual income of more than $20,000, or to foreigners with an annual income of more than $45,000.

A licensed money lender in Singapore also charges an interest rate is typically higher than for banks, which are comparable to that of a credit card.

How To Tell If A Money Lender Is Licensed

Singapore has hundreds of authorised and unlicensed money lenders. As a result, you must exercise extreme caution when deciding which lender to trust.

Be sure to check the list of licensed money lenders by the Registry of Moneylenders, which is under the Ministry of Law (MinLaw). The list is regularly updated and easily accessible. It can be downloaded as a PDF.

Can You Borrow From Multiple Money Lenders?

What is important to note is that you should not exceed your maximum loan limit, which is based on your annual income.

However, you can still borrow money from many Singapore money lenders within your limit.

Even if you don’t know how much you can borrow, suffice to say that the new Moneylenders Act amendments prevents borrowers from asking for a loan if they already have substantial monthly debt obligations.

Licensed money lenders utilise credit reports from Moneylenders Credit Bureau to get information on borrowers who have active loan contracts with them, including whether or not the borrowers have taken out further new loans.

What Is The Maximum You Can Borrow From A Money Lender?

Even with the best licensed money lender interest rate, finding a bank that is willing to offer you an unsecured loan with an annual income of less than $10,000 is nearly impossible.

However, a licensed money lender, on the other hand, is legally permitted to lend you up to $3,000.

If your salary is more than $20,000 per year, a licensed money lender may grant you a loan of up to six months’ pay, subject to their eligibility criteria.

Loan calculators are available on the websites of the majority of legal money lenders. You can use this tool to determine how much your monthly payments might be based on the loan amount you want.

The table below displays the total maximum unsecured loan amounts that you can borrow at any moment from all Singapore money lenders:

Borrower’s annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Below $10,000 $3,000 $500
At least $10,000

And below $20,000

At least $20,000 6x the monthly income 6x the monthly income


It is prudent to determine how much you need to borrow from a licensed money lender to avoid financial issues and falling into severe debt.

Examine your monthly budget to ensure that you can repay your loan in full each month.

Due to the Moneylenders Act, borrowers who already have significant monthly debt obligations will no longer be permitted to apply for a loan.

Hence, any Singapore money lender will be unable to advance a loan if you have reached your lending limitation.

More on this topic:

What To Do Once Loan Is Approved

After your loan application has been approved, confirm that the money lender offers the exact principal amount to you.

However, a loan approval charge of up to 10% of the principal amount may be deducted beforehand by the money lender.

Secondly, ensure you honour each instalment when the due date comes. Paying late will result not only in the accumulation of your installments, but will also attract late payment fees and late interest charges.

Thirdly, make sure your lender gives you a receipt every time you make a payment on your loan, and double-check it for accuracy.

In addition, make sure you receive a statement of account for all of your loans at least once a year so that you may review them for accuracy.

Finally, keep all statements of accounts and payment receipts as documentation and proof of payments.

What Happens If I Can’t Pay Back The Loan?

There are several approaches you might take if you are unable to repay a loan from a licensed money lender.

In some cases, you may negotiate for the extension of your loan period or a refinancing plan with your money lender. This remedy will, however, come at a cost.

To prevent late payment penalties, it is best to do this before the next loan installment is due in the case of a term loan.

If you are repeatedly unable to repay a loan, your money lender has the legal authority to sue you for recovery measures, especially if an asset secures the loan.

When you cannot pay obligations totaling at least $15,000, you may file for bankruptcy, which stops the accrual of interest charges and prevents the money lender from initiating legal actions until you are freed from bankruptcy.

The Debt Repayment Scheme (DRS) is another possible option for bankruptcy for debts under $100,000.

In this case, you are supported by the Official Assignee from the Ministry of Law’s Insolvency Office in determining an appropriate repayment schedule for all outstanding obligations over a defined period of time.

The DRS prohibits money lenders of unsecured loans from pursuing legal action against you unless the court grants permission.


If you have decided to take out a loan from a money lender, you should be aware of the maximum amount you can borrow as permitted by the Moneylenders Act.

Most legal money lenders in Singapore have their own maximum loan limits, and your eligibility will depend on your annual income and credit history.

Choosing a money lender can be difficult and confusing, so make sure to compare the available legal loan providers while keeping lending rates in mind.

In the event you have a financial emergency, contact BST Credit, one of the best licensed money lenders in Singapore.

We provide financial assistance with simple loan terms that can be tailored to suit your ability to repay without the need for stringent paperwork and processes.

Apply for a loan here.

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