Key Takeaways

• The Moneylenders Act Singapore regulates who can lend, the amount that can be borrowed, and the fees that can be charged.
• Borrowers are protected from harassment, overcharging, and misleading advertisements through clear legal safeguards.
• Always verify your lender through the Ministry of Law’s official registry to ensure you’re dealing with a legitimate, licensed entity.

When people think of borrowing money in Singapore, they often imagine banks, credit cards, and perhaps the occasional licensed money lender. Yet few realise that behind every legal loan transaction lies a robust framework designed to protect both lenders and borrowers — the Moneylenders Act Singapore.

First introduced in 1959 and subsequently refined over the years, the Act serves as the cornerstone of Singapore’s regulated moneylending industry. Its purpose is simple yet profound: to protect ordinary people from exploitation while ensuring that legitimate lenders can operate within clear, transparent boundaries.

But how well do most Singaporeans really understand what the Act covers? Beyond knowing that it “keeps loan sharks in check,” there are many lesser-known rules, safeguards, and borrower rights enshrined within this law.

In this guide, we’ll explore five key things you might not know about the Moneylenders Act in Singapore— insights that could help you borrow more confidently, spot scams more easily, and stay financially protected at all times.

1. Not Everyone Can Legally Lend Money

One of the first — and most important — things the Moneylenders Act does is establish who can legally lend money in Singapore. This may seem straightforward, but the law draws very clear lines between legitimate and illegal moneylending.

Under the Act, there are three categories of entities allowed to offer loans legally:

1. Exempt moneylenders – These are organisations that have been officially exempted from the licensing requirement, often because their operations are already tightly controlled under other laws or government arrangements.
2. Excluded moneylenders – These include bodies such as pawnbrokers under the Pawnbrokers Act, credit co-operatives under the Co-operative Societies Act, and financial institutions regulated by the Monetary Authority of Singapore (MAS).
3. Licensed money lenders – These are private businesses that have successfully obtained a licence from the Registrar under the Moneylenders Act. They must comply with the Act’s detailed requirements — including interest caps, conduct rules, and advertising restrictions.

Anyone outside these categories — no matter how professional they may appear — is operating illegally. In other words, if someone offers you a “quick cash loan” over WhatsApp or promises “instant approval with no documents,” chances are you’re dealing with a loan shark, not a legitimate lender.

The Ministry of Law (MinLaw) maintains a publicly accessible Registry of Licensed Moneylenders, which you can check online. Before signing any agreement, always verify that your lender appears on the official list of registered lenders. This simple step can save you from months of harassment, unfair charges, and emotional stress later on.

2. The Act Protects You From Borrowing Beyond Your Means

Another critical but often overlooked feature of the Moneylenders Act is that it places strict limits on how much you can borrow, depending on your income level.

At first glance, this might seem restrictive — but the intention is deeply protective. The government recognises that borrowing too much, even from a legal source, can quickly spiral into financial distress.

To prevent this, the Act caps your total borrowing amount across all licensed money lenders, ensuring that you never take on more debt than you can reasonably handle. Here’s how it works:

For Singaporeans and PRs:

• Those earning less than S$20,000 per year can borrow a maximum of S$3,000 from all licensed money lenders combined.
• Those earning more than S$20,000 per year can borrow up to six times their monthly income.

Meanwhile, stricter criteria are imposed on foreigners:

• Those earning less than S$10,000 per year can borrow up to S$500.
• Those earning at least S$10,000 but less than S$20,000 per year can borrow up to S$3,000.
• Those earning more than S$20,000 per year can borrow up to six times their monthly income.

These limits aren’t arbitrary; they’re grounded in responsible-lending principles that balance access to credit with borrower protection.

So, if you ever find yourself rejected by a licensed lender, it may not be because they doubt your credibility — it could be that your existing debts already exceed the legal threshold.

In contrast, loan sharks have no such boundaries. They’ll happily lend you far more than you can afford, only to trap you later in a vicious cycle of inflated interest and threats. That’s precisely the kind of scenario Singapore’s Moneylenders Act is designed to prevent.

3. Licensed Lenders Are Legally Bound by Interest and Fee Caps

One of the strongest borrower protections under the Moneylenders Act lies in its regulations governing interest rates and fees.

Licensed money lenders are not allowed to charge whatever they wish. The Act imposes strict limits on the interest rates and fees they can charge legally, ensuring fairness and transparency.

Here’s what’s legally permitted:

• Interest rate: Capped at 4% per month on the remaining loan principal.
• Late interest: Also capped at 4% per month, but calculated only on the overdue amount — not the entire loan.
• Late payment fee: Maximum of S$60 per month.
• Administrative fee: Up to 10% of the principal, payable upon loan approval.

And here’s an important detail many people miss: the total amount of interest, late interest, and fees combined cannot exceed the original loan amount.

So if you borrowed S$5,000, the absolute maximum you could ever be charged — even with months of late payments — would be another S$5,000. Anything beyond that would be illegal.

Licensed money lenders who breach these rules risk fines, suspension, or even permanent revocation of their licence. Borrowers, on the other hand, have clear legal recourse. If you ever suspect overcharging or improper conduct, you can contact the Registry of Moneylenders at 1800 2255 529 for assistance.

This transparent fee structure is what distinguishes legitimate lenders from exploitative ones — and it exists solely to keep borrowing fair, predictable, and safe.

4. Loan Advertisements Are Heavily Regulated

In Singapore, even how a money lender reaches out to you is regulated by the Moneylenders Act.

Under the law, licensed lenders can only advertise through three approved channels:

1. Business or consumer directories — whether printed or online.
2. Their official website(s).
3. Advertisements displayed at their registered business premises.

That’s it. Any loan offer that comes from outside these approved channels — whether through an unsolicited SMS, WhatsApp message, flyer, or social media post — is almost certainly from an unlicensed lender. These illegal operators often disguise themselves as legitimate businesses, dangling promises like “instant cash” or “guaranteed approval with no documents.” In reality, such offers are designed to trap unsuspecting borrowers in unlawful and exploitative debt schemes.

The Ministry of Law and the Police regularly warn the public about such scams. If you ever receive one of these offers, do not reply or click any links. Instead, report the number to the authorities by calling 1800 2255 529 or submitting a report through MinLaw’s feedback portal.

By restricting how lenders can advertise, the Moneylenders Act not only curbs the spread of illegal loan operations but also reduces exposure to predatory lending among vulnerable individuals — especially those in urgent need of cash.

5. Borrowers Are Protected from Abuse and Unfair Practices

The Moneylenders Act doesn’t stop at financial rules — it also enforces strict conduct standards for all licensed lenders. These rules are in place to ensure that borrowers are treated with dignity, clarity, and respect.

Here are some key practices that are prohibited under the Act and related regulations:

• Abusive or threatening behaviour: Lenders cannot harass, intimidate, or verbally abuse you under any circumstances.
• Withholding personal documents: Your NRIC, passport, employment pass, or ATM card must never be retained by the lender.
• Requesting Singpass login details: It is illegal for any lender to demand your Singpass ID and password.
• Incomplete contracts: You should never be asked to sign blank or partially filled forms.
• Improper loan approvals: A licensed lender must review your documents and verify your identity in person before issuing any loan approval.

If any of these red flags occur, walk away immediately. A reputable, licensed lender will always conduct business professionally and transparently, ensuring you fully understand the terms of the Note of Contract and all loan terms before you sign.

The Act empowers borrowers to report misconduct without fear of retaliation. You can contact the Registry of Moneylenders or even the Police if you believe your rights have been violated.

By upholding these ethical standards, the Moneylenders Act not only punishes rogue operators but also fosters trust between borrowers and legitimate financial service providers — a cornerstone of Singapore’s well-regulated credit landscape.

Why the Moneylenders Act Matters Today

In an era when online scams, WhatsApp loan offers, and social media impersonations are becoming increasingly prevalent, the Moneylenders Act has never been more relevant in Singapore. It’s the legal shield that separates safe borrowing from financial exploitation.

Every rule — from interest caps to advertisement restrictions — exists for a reason. They were built upon years of public feedback, real-life case studies, and enforcement experience. Together, they ensure that borrowers can access short-term credit safely, without fear of hidden fees or harassment.

Ultimately, the Act strikes a delicate balance: enabling access to credit for those who might not qualify for bank loans, while maintaining accountability and transparency in the private lending sector.

Final Thoughts

The Moneylenders Act Singapore is more than just a piece of legislation — it’s a safety net woven into the country’s financial system. It keeps borrowing legitimate, transparent, and fair.

If you ever find yourself in need of a personal loan, take a moment to verify your lender’s credentials, understand your rights under the Act, and avoid any offers that seem too good to be true.

At Prosper Credit, we’re proud to operate fully under the regulations of the Moneylenders Act. With years of experience and a commitment to integrity, we provide low-interest, flexible loan solutions tailored to your needs — always with fairness and transparency.

Apply now or reach out to our friendly team today to learn more about how we can help you achieve your financial goals safely and responsibly.