22 April 2020

Life can get pretty unpredictable. Sometimes, you might find yourself in need of quick cash, but your savings is not enough. You may have thought about taking up a loan from the bank, but what if you can’t get across the red tape? The paperwork, the waiting period, and the anxiety of not knowing whether or not your application has been approved… Don’t worry, though. Licensed money lenders in Singapore are a viable alternative that you can consider. 

The process of obtaining a loan can be faster and more seamless with a licensed money lender. But with money lenders in Singapore sometimes being associated with “ah longs”, how to differentiate a licensed money lender from an illegal one? What makes a money lender licensed? 

Here are all the differences between a licensed and an unlicensed money lender in Singapore that you need to know. 

Infographic on the differences between licensed and unlicensed money lenders in Singapore
Be sure to look out for these things to ensure you’re borrowing from a licensed money lender

Differences Between A Licensed And An Unlicensed Money Lender In Singapore 

Before you jump into applying for a loan, be sure to consider these 5 factors. 

Transparency

Licensed Money Lenders

Transparency, in this case, refers to the unambiguous terms that should be stated in the loan contract offered to you. 

Firstly, all licensed money lenders in Singapore are required to explain to you the terms and conditions of the loan in a clear and succinct manner. 

They are also required by law to provide you with a loan contract, and state all the loan terms and conditions in it. These include the repayment period, payment method options, the interest rate charged to your loan, and any other details that may affect your loan in the long term. 

Unlicensed Money Lenders

On the other hand, unlicensed money lenders often don’t provide you with a contract with these terms. 

In addition, be wary of unlicensed money lenders who may send you PDF documents for ongoing loan processes

These files are often sent by SMS or WhatsApp, supposedly from the Money Authority of Singapore (MAS) or the Ministry of Law (MinLaw) stating that you have to pay a deposit and GST before the loan is approved. 

Such documents are part of loan scams. Keep in mind that you’re not required to pay any fees before the loan is approved. 

Interest Rate

Licensed Money Lenders

As regulated by MinLaw, licensed money lenders can only charge up to 4% per month for their loans. 

On top of this cap, the interest rate charged by a licensed money lender is usually based on its assessment of your creditworthiness.

For late payments, licensed money lenders can only charge a late interest rate of up to 4% per month. This late interest rate is only applicable to the remaining amount that you haven’t paid yet. 

For instance, if you take a loan of S$50,000 and have paid S$40,000, the late interest rate is only charged on the remaining S$10,000. 

Unlicensed Money Lenders

Conversely, unlicensed money lenders can charge a ridiculously high-interest rate and late interest rate, often well above 4% per month. 

Moreover, many of them may choose to include other implicit costs, such as processing fees and other miscellaneous payments. 

Fees

Licensed Money Lenders

Licensed money lenders in Singapore are only permitted to impose certain charges and expenses when you take up a loan from them. 

With effect from 1 October 2015, licensed money lenders can only charge the following fees:

  • A fee not exceeding S$60 for each month of late repayment
  • A fee not exceeding 10% of the principal of the loan when a loan is granted
  • Legal costs ordered by the court for a successful claim by the licensed money lender for the recovery of the loan

One very important thing to note here is that a licensed money lender cannot impose total charges that exceed the principal amount of the loan. The total charges include interest, late interest, upfront administrative fee, and late fees. 

For example, if you were to take up a loan of S$50,000, then the interest, monthly S$60 late fees, late interest, and 10% administrative fee cannot go beyond S$50,000.

Can’t keep up with your payments? Learn what licensed money lenders can and cannot do when collecting debts. 

Unlicensed Money Lenders

Recently, unlicensed money lenders in Singapore have been in the spotlight for asking people to pay money even before the loan is granted to them. As part of the scam, they send out SMSes and WhatsApp messages to offer loans to people. 

Besides, they instruct people to pay a deposit amount and GST for the loan processing fee. And when people decide not to pay or cancel the loan, they would be harassed and told that they’d need to pay to cancel it. 

If you encounter this kind of situation, chances are you’re dealing with an unlicensed money lender. 

Keep in mind that a licensed money lender in Singapore will not ask for payment before your loan is processed. They can only charge the processing fee after your loan has been granted.  

A woman looking at her phone
Licensed money lenders in Singapore are not allowed to advertise loans via text messages

Advertisement

Licensed Money Lenders

As of 1 November 2011, under the advertising rules, licensed money lenders in Singapore are only permitted to advertise through these 3 channels:

  • Business or consumer directories (in print or online media)
  • Websites belonging to the licensed money lender 
  • Advertisements placed within or on the exterior (the side of the wall, door, shutter, gate, and window) of the licensed money lender’s business premises

Unlicensed Money Lenders

In the same vein, the advertising rules are your best bet at determining whether or not a money lender is licensed. 

If the advertisements come in other channels such as flyers, text messages, emails, and any other media forms, it’s important to note that they’re not permitted under advertising rules. This means that they are either licensed money lenders who have violated the law, or unlicensed money lenders.

If you ever encounter any of these advertisements, don’t respond to them. Instead, report these advertisements to the Registry of Moneylenders at 1800-2255-529 or via MinLaw’s website. 

Loan Amount

Licensed Money Lenders

If you were to opt for a secured loan, you could get a loan of any amount from a licensed money lender. 

For unsecured loans in Singapore, such as personal loans, there’s a limit to how much you can borrow. This will depend on your annual income. When borrowing from a licensed money lender, they’ll request for relevant documents such as your payslip.  

Here’s a table to illustrate the maximum amount that you can borrow from a licensed money lender in Singapore. 

Annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than S$10,000 S$3,000 S$500
S$10,000 – S$20,000 S$3,000 S$3,000
S$20,000 and above 6 times of monthly income 6 times of monthly income

Wondering how does a personal loan work? Learn more about it here. 

Unlicensed Money Lenders

On the contrary, there’s no limit to how much you can borrow from an unlicensed money lender. This means that you can borrow as much as you want from them, although doing so comes with several caveats. This includes being charged with hidden fees and interest rates way above 4% per month. 

In Summary

Essentially, licensed money lenders are governed by MinLaw. If you’re unsure about the status of the money lender you’ve come across, you can refer to the list of licensed money lenders published on MinLaw’s website

If you suspect that you’re dealing with an unlicensed money lender, you can do the following: 

  • Call 1800-722-6688 to get scam-related advice.
  • Check for related news from www.scamalert.sg to know how to protect your financial and personal information.
  • Call the police at 1800-255-0000 to report any illegal activity related to unlicensed money lenders.

Here are some tips to help you protect yourself from unlicensed money lenders: 

  • Do not disclose any sensitive information such as SingPass, NRIC, and bank account details even when you’re not applying for a loan.
  • Do not sign a contract if it lacks important information such as late repayment fees or the type of loan extended to you.
  • Do not act as a guarantor for any illegal loans.
  • Report any hostile treatment to the authorities.
  • If you are in debt or are tight with your finances, consider approaching a social service agency. They can offer you general credit management information, credit counselling, and negotiate a debt repayment plan with creditors.

Thinking of applying for a loan from a licensed money lender? Get started with Crawfort. 

Hungry for More Articles?

Company News
Leveraging On Digitalisation To Simplify Loan Application

Singapore — (19 May 2020) — Staying ahead of the digital economy, we at Crawfort, the consumer loan subsidiary of Capital C Corporation, have incorporated digitalisation strategy to introduce a new loan platform with an improved user interface and experience on our website, alongside a new brand name and logo. In line with our goal […]

Media
The Entrepreneur 2019

Celebrates the achievements of 10 businessmen and women who prove to have what it takes to break boundaries and emerge as winners of Singapore’s Entrepreneur of the Year Awards (EYA).

Blogs and Opinions
Personal Loan In Singapore: What’s A Debt Consolidation Plan?

With the lure of credit cards and their rewards (think airmiles, cashback, free luggage), many Singaporeans end up with large credit card debt. Swiping the card is so easy and convenient, that many fall into the endless debt trap. If you find yourself struggling to make timely credit card and personal loan repayments in Singapore, […]

Personal Loan
Financing Options For Your Home Renovation: Personal Loans In Singapore, Renovation Loans And More

Just collected the keys to your new house? Buying a house is most likely the largest purchase in your life. After getting the keys, you’ll want to renovate it to make it your dream home. But before you can renovate it, you’ll need to ensure that you have enough money for it. In this article, […]

Personal Loan
The 2 Types Of Personal Loans In Singapore To Consolidate Your Debt 

Besides being symbolic of financial independence and adulting, owning a credit card is a great way to earn rewards and cashback on your spending as long as you pay your bills dutifully every month. But what if you’re unable to pay your bills on time? With sky-high interest rates and a few late payment fees, […]

Blogs and Opinions
10 Travelling Tips For Your Next Trip And How A Personal Loan In Singapore Can Help

In a world where everything has its price, your dream of travelling the world can seem far and out of reach. Especially when you have daily expenses to account for and pressing bills to pay. Travelling can be expensive. However, the experiences you gain and memories forged from travelling is oftentimes invaluable. Though travelling can […]

Blogs and Opinions
Should You Take A Personal Loan In Singapore For Your Wedding?

Most of us dream of having the perfect wedding with our significant other. We want to make the day perfect to celebrate our love for our partner with our family and friends. However, planning a wedding can be stressful. Not only do you have to decide on the location, settle the most minute details, and […]

Blogs and Opinions
When Should You Consider Taking A Personal Loan Over A Renovation Loan In Singapore?

Now that you’ve collected the keys to your new home and browsed countless web pages for decor inspiration, it’s time for the next step. Imagine, after a long day at work, going back to a home that’s furnished and personalised just the way you like it. Isn’t that exciting? That is until you realise the […]

Personal Loan
Should You Take A Personal Loan In Singapore For Your Vacation?

Have you been toying with the idea of taking a good break for a while? And when we mean a break, we mean a good, quality break that’s going to give you a good reset. Maybe it’s been something on your mind for a while now but you haven’t gotten around to it because it’s […]

Personal Loan
Why You Should Upgrade Your Skills And How A Personal Loan In Singapore Can Help You With That

According to Robert Kiyosaki, a successful businessman and author of Rich Dad Poor Dad, continuous learning is the key to getting rich. If you want to be successful in life, you need to have the right attitude, the right mentality, and seek continuous learning. Even after graduating, you should continue to upgrade your skills, which […]

Personal Loan
3 Ways To Reduce Your Wedding Costs And How Getting A Personal Loan In Singapore Can Help

Your wedding day is undoubtedly one of the most important days of your life. If you’ve been saving diligently after meeting “the one”, kudos for planning in advance! However, it may be the case that your savings still aren’t enough to cover the costs of your dream wedding.  To help you along on your journey, […]

Personal Loan
Renovation Loan Vs Personal Loan In Singapore For Home Renovation: What’s The Difference?

The priciest thing you can buy in Singapore is probably your home. Even if you don’t mind a rugged aesthetic, minimalistic, or industrial look, basic renovation is still necessary for installation of electrical endpoints, tilework, paintwork, and so on.  If you’ve done the maths, you’ll realise that renovations can cost an arm and leg. However, […]

Personal Loan
Personal Loan In Singapore: How Can It Help With Wedding Expenses?

Your wedding day is probably the most significant milestone as a couple. It’s a momentous and joyous occasion, where family and friends come together to celebrate the love and union between the two of you. How would taking out a personal loan in Singapore come into the picture? Well, every couple dreams of having that […]

Personal Loan
2 Types Of Personal Loans In Singapore To Consider In Times of Emergency

It’s always good when we receive a heads up before something happens, so that we can prepare for it.  But that doesn’t happen all the time. You can never predict when something unexpected crops up, and when you need extra cash urgently. In such times, a personal loan can be a viable option.  Types Of […]

Personal Loan
How Personal Loans In Singapore Can Be Useful For Grab And Taxi Drivers

The past few months have been difficult for many people in various industries. Most businesses, especially in the service industry, have been badly affected by the COVID-19 social distancing measures. Taking a personal loan in Singapore is one option to get through this tough time.  Ever since the outbreak began, less people have been going […]

Personal Loan
When Should You Take Out A Personal Loan In Singapore To Upgrade Your Skills?

We’re often told to continuously upgrade our skills because we need to stay relevant in times of changing needs. And one way to do that is through taking up courses. Plus, doing so can be helpful when we choose to switch careers. But taking up courses in Singapore can be quite expensive. For instance, a […]

Blogs and Opinions
8 Things That Bring Down Your Credit Score In Singapore

Looking to purchase a home, car, or paying for that dream wedding? High costs of living in Singapore can make that hard to achieve. In fact, taking on loans to make those dreams a reality is not uncommon. Before applying for a loan, you should look at a few key considerations banks and financial institutions […]

Blogs and Opinions
7 Things You Didn’t Know About Licensed Money Lenders In Singapore

Getting married, buying a home, or furthering your studies are major milestones in life. And these milestones usually come at a hefty price. Remaining debt-free becomes increasingly difficult as you move up the different stages of life; the last thing you want is to be trapped in a financial emergency. Turning to loved ones or […]

Blogs and Opinions
Licensed Money Lender In Singapore: How Much You Can Borrow And What You Must Note

The cost of living is high in Singapore. There are times where we inevitably run into money problems and need cash to tide over difficult periods. For some, it could be money needed to last until their next payday, more money for their wedding, home renovation, or for a financial emergency. According to the Credit […]

Personal Loan
Secured Vs Unsecured Personal Loan In Singapore: Which To Choose?

If you’re facing some kind of financial difficulty, getting a personal loan in Singapore could help improve your situation. Whether you choose to borrow from a bank or a licensed money lender in Singapore, you have a decision to make: you’ll need to decide whether to take a secured loan or an unsecured loan. But […]

Blogs and Opinions
Licensed Money Lenders In Singapore: What Are Your Options If You Can’t Repay Your Loan?

Some of us encounter financial difficulties at different junctures in life. In such situations, borrowing from lenders like banks or licensed money lenders in Singapore would be among the available options to help get you back on your feet. Whether you borrow from a bank or licensed money lender, you’re of course obligated to make […]

Blogs and Opinions
4 Things To Consider When Borrowing From A Licensed Money Lender In Singapore

Whether it’s taking out a loan to renovate your brand new home or financing an unexpected medical emergency, there may come a time when you need some financial assistance. Taking out a personal loan to fund such expenses is a common option.  As a borrower, you’re usually faced with 2 main options: a bank or […]

Personal Loan
5 Reasons Why Your Personal Loan Application In Singapore Was Rejected

Perhaps it’s a time right now when you require extra financial support for your needs—for an emergency, for a dream vacation for you and your partner, or even for a plan to move forward and venture out of your comfort zone. However good your reasons may be, you may have faced problems having your personal […]

Personal Loan
Are You Eligible For A Personal Loan In Singapore?

When we’re short on cash, most of us will consider borrowing from friends and family members. However, if you don’t want to trouble them, how about taking a personal loan instead? A personal loan is a lump sum of money borrowed from a bank or licensed money lender. You’ll need to pay it back over […]

Blogs and Opinions
5 Ways To Improve Your Credit Score At The Credit Bureau Singapore

Ever wondered what affects your loan applications? Or why some of your credit card applications were rejected?  It’s likely because of your credit score. A bad credit score can affect your applications for personal loans and credit cards. But what’s a credit score? How do you check it, and how can you improve your credit […]

Blogs and Opinions
6 Things A Licensed Money Lender In Singapore Can’t Do When Collecting Debts

Getting a loan from a money lender in Singapore might be nerve wracking for some. When most think of money lending, they think of a pig’s head hanging by their door or that ‘O$P$’ red paint on the corridor.  However, loan sharks and licensed money lenders in Singapore operate very differently.  Let us look at […]

Blogs and Opinions
Ultimate Guide To Borrowing From Licensed Money Lenders In Singapore

Paying off bills and expenses without any assistance can be really challenging, especially when you’re living in one of the most expensive cities in the world — Singapore. Things like medical bills and wedding costs, for instance, can easily cost thousands of dollars in Singapore.  When there’s not enough money to pay off these expenses, […]

Blogs and Opinions
Borrowing From A Licensed Money Lender In Singapore Vs A Pawnshop: What’s The Difference?

Something sudden happens and you find yourself in urgent need of cash. You might be considering borrowing from the bank, but they might take a long time to approve your loan. So, you start looking for alternatives to get a fast loan in Singapore. When it comes to getting quick cash, 2 options come to […]

Personal Loan
6 Reasons Why You May Need A Personal Loan In Singapore

Have you ever found yourself stuck against a wall financially? When you have so many bills to pay, then suddenly, you or someone you know gets into an accident or gets sick. You are then overwhelmed with bills and the debt you need to pay, and the money you’ve saved or earned just isn’t enough […]

Personal Loan
4 Types Of Personal Loan In Singapore You Should Know

It is tough sometimes when we land ourselves in unexpected situations that require immediate financial assistance, such as medical emergencies or investment opportunities. At times like this, taking out a personal loan in Singapore could be a viable option to ease your financial burden.  A personal loan is a type of unsecured loan that does […]

Personal Loan
Personal Loans In Singapore: What To Consider When Applying

Personal loans can seem like a mystery. What are they? When should you take them? How do you go about applying for personal loans in Singapore? A personal loan is a lump sum of money borrowed from a bank or licensed money lender, which you have to pay back in instalments (fixed payments) over a […]

Personal Loan
How To Get A Personal Loan In Singapore Even With A Bad Credit Score

Whether it’s to buy a first home or pay for education, most of us probably need to take a loan at least once in our life. However, not all loan applications can turn out successful. If you’ve applied for a personal loan in Singapore before but it got rejected, it could be due to your […]

Personal Loan
Personal Loan In Singapore: Should You Take One?

2020 is the start of a new decade and many of us are setting goals and striving towards them. A few things that can help you reach your goals include having sufficient money and knowing how to budget wisely. And taking a personal loan in Singapore might just be something worth considering.  Before diving into […]

Personal Loan
Personal Loan In Singapore: What It Is And How To Apply

Whether you need a helping hand to achieve a resolution you’ve set for the year, or you’re in urgent need of money, getting a personal loan in Singapore may come in handy.  But before you apply for a personal loan in Singapore, here are some important things that you need to know. What Is A […]

Blogs and Opinions
Licensed Money Lender In Singapore Vs Bank: What’s The Difference

Getting married and buying a home are some of the most significant milestones and expenses you’ll incur when adulting. The last thing you want is to be strapped for cash. When that happens, most people think of borrowing money to tide them through the rough patch. You’re usually faced with two choices – should I […]

Personal Loan
5 Myths About Taking Personal Loans From Money Lenders In Singapore

It’s pretty common to take up a car loan and/or a housing loan, especially since it’s costly to own a car and a home in Singapore. But when it comes to taking a personal loan in Singapore, it’s usually perceived as the result of poor financial management.  Depending on the circumstances, taking a personal loan […]

Company News
Advisory on COVID-2019

In light of the COVID-19 situation, Crawfort Singapore has stepped up and implemented additional precautionary measures at our outlet.

Media
单枪匹马赴菲“拓荒”寻商机

一般人对菲律宾的印象,总停留在治安欠佳和交通拥堵。然而,不能忽视的是,菲律宾有上亿人口,而近年经济增长也保持强劲,可谓商机处处。Crawfort正是看到了这个商机,希望能够为那些懂得数据科技,却无法充分从传统金融机构获取服务的消费者提供服务。

Company News
Crawfort Is Awarded
ISO 9001 : 2015

Crawfort is proud to be awarded the TUV ISO 9001 mark of quality, and will continue to provide excellent quality of services.

Media
10 Business Leaders Recognised As Entrepreneur Of The Year

From training aspiring pilots to lending money, 10 local entrepreneurs received the Entrepreneur of the Year Award (EYA) 2019.

Media
The Breakfast Huddle

Find out how we can help F&B SMEs scale their businesses.

Media
CEO Conversation: Transforming Into A Digital Financial Services Provider

Find out how our Group is leveraging technology to serve underbanked customers in the region.

Media
The Case For Alternative Lending

In the last decade, we have witnessed rapid growth in the alternative lending space, with the creation of new business models opening up the range of alternative lending products available.

Media
How Fintech Is Driving Innovative Lending?

In Singapore, SMEs account for around two-thirds of the workforce and a large chunk of GDP growth. And if these firms can’t get funding, their failure to thrive has a dampening effect on the larger economy.

Company News
Crawfort Joins Singapore’s Fastest Growing Businesses

Crawfort rewrites the rules when it comes to moneylending solutions.

Media
Crawfort: Breaking Stereotypes Through Innovation

Innovative business Crawfort is rewriting the rules when it comes to moneylending solutions

8 Minutes is All You Need

Get Your Loan
Approved by
Tomorrow