10 Things Licensed Moneylenders Can’t Do in Singapore

Are you prepared for a shocking revelation? Brace yourself, because today we’re about to uncover the mind-boggling truth about what those moneylenders just can’t do in Singapore! Imagine this: You’re in need of some fast cash, and licensed moneylenders appear to be the perfect solution. But hold on tight! There are regulations in place that tightly restrict their actions. Prepare to be amazed as we unveil the incredible lineup of activities that these moneylenders are absolutely prohibited from engaging in.

1. They Can’t Charge Excessive Interest Rates  

Imagine you’re considering a loan from a licensed moneylender in Singapore. Good news: they can’t charge you more than 4% interest per month. For example, if you borrow $1,000, the maximum interest they can charge is $40 per month. This rule protects you from being burdened with sky-high interest rates that can trap you in a never-ending cycle of debt.

2. Prohibited Use of Abusive Language or Behavior

When you deal with licensed moneylenders in Singapore, you deserve to be treated with utmost respect and professionalism. It’s their duty to uphold these standards. That means they can’t hurl abusive words your way or make you feel threatened. 

Imagine this scenario:

Borrower: “I need to discuss the repayment schedule for my loan.”

Moneylender: “You better pay up or else I’ll ruin your life! You’re worthless!”

Whoa, hold on there! That moneylender has clearly crossed the line. They are not allowed to use abusive language or engage in any behavior that makes you feel scared or belittled. It’s essential to remember that you have rights, regardless of your financial circumstances.

3. No Unsolicited Advertising Messages or Calls

Ever had those annoying messages or calls from moneylenders pushing their services on you? Well, licensed moneylenders here in Singapore can’t do that. They’re not allowed to bombard you with unsolicited texts, WhatsApp messages, or random phone calls just to promote themselves. Picture this:

Example 1

Hey there! Need some quick cash? 

✔️ We’ve got reasonable rates 

✔️ Flexible repayment plans

✔️ Super-fast documentation process

✔️ Re-loan options available

Call Ben @ 8206 XXXX

Example 2

Looking for financial assistance? Act now! ❗❗❗ 

10k – 190 payments over 60 months

20k – 360 payments over 60 months

30k – 570 payments over 60 months

40k – 760 payments over 60 months

50k – 950 payments over 60 months

WhatsApp: Rance @ 8245 XXXX

This rule exists to shield you from unwanted ads and ensure you’re free to seek financial help without any pressure. It’s all about protecting your peace of mind.

4. Informal Loan Contracts Are Not Accepted

When you’re diving into the realm of licensed moneylenders in Singapore, it’s time to put the spotlight on proper loan contracts. These written agreements are non-negotiable when it comes to your financial safety. They lay out the whole shebang: interest rates, repayment schedules, fees, and all the essential details. It’s an absolute must for licensed moneylenders to hand over this contract to borrowers, with no exceptions allowed.

But hold your horses, because here’s where it gets interesting. If a moneylender passes you a hollow or incomplete contract to sign, brace yourself for a potential money maze. This is a flashing neon sign of caution. 

Picture this wild scenario: You need some quick cash to handle those unexpected medical bills. The moneylender hands you a contract, but it’s nothing but your name and loan amount. Zilch on the interest rate or repayment timeline. It’s like signing an invisible check with no clue about the charges or the payback period.

5. No Retention of Personal Identification Documents

When it comes to licensed moneylenders in Singapore, they understand the importance of keeping your personal identification documents safe and secure. They can’t hold onto your original papers like passports, work permits, or NRIC cards. They can make copies to verify your identity, but they have to give back the real deal right away. This rule is in place to prevent any shady business with your personal info, like identity theft or unauthorized use. So, remember to protect your ID documents like a hawk and ensure they’re promptly returned once the checks are done.

6. Prohibition of Abusive Debt Collection Practices

Money troubles can really weigh you down, but here’s some good news: licensed moneylenders in Singapore strictly prohibit resorting to abusive or unfair debt collection practices. They cannot stoop to low levels and use tactics that would make your life even more miserable. Let’s take a look at what these licensed moneylenders are not allowed to do when it comes to collecting debt:

  • Harass, threaten, or intimidate you 
  • Stalk you like a creepy detective 
  • Inflict any form of physical harm on you 
  • Vandalize your property, because it’s just plain wrong 
  • Seize control of your belongings or damage them in any way 

7. Neglecting Borrower’s Ability to Repay

When it comes to borrowing money, responsibility is crucial here on our sunny island. Our authorities have established some strict regulations for licensed moneylenders, ensuring that you’re able to fulfill your repayment obligations. But let’s delve into the world of unlicensed moneylenders, those shadowy characters who operate by their own rules.

Picture this: Unlicensed moneylenders are like those dubious characters in the shadows, tossing out loans to anyone who can tap a few buttons on their smartphone. They don’t bother with your financial well-being or whether you can actually afford to repay the borrowed sum. It’s a dangerous gamble that can have severe consequences for vulnerable individuals. Let’s take a closer look at what these moneylenders can’t be bothered to do:

  • They don’t bother checking your income or financial stability.
  • They couldn’t care less about your existing debts or repayment commitments.
  • They don’t take the time to assess your ability to repay the loan.
  • They focus solely on whether you can navigate the online world or send a text message.
  • They prey on those in desperate need, offering quick cash without considering the long-term impact.

In the realm of borrowing money, responsible lending practices are crucial. Licensed moneylenders are required to evaluate your ability to repay the loan, ensuring that you’re not burdened with excessive debt or caught in a cycle of never-ending payments. 

8. Advertising Restrictions to Prevent Misleading Claims

Picture this: You’re browsing through the web, and you stumble upon an enticing ad promising quick cash with no strings attached. It sounds too good to be true, doesn’t it? Well, that’s where licensed moneylenders stand apart. They have a set of strict rules guiding their advertising practices, ensuring they don’t mislead borrowers like you.

In Singapore, moneylenders are prohibited from resorting to deceptive or false advertising tactics. They can’t make claims that might trick or confuse you. It’s all about transparency and providing accurate information, so you can make smart decisions about your finances.

Let’s say you spot an advertisement promising “Instant Loans with Zero Interest Rates!” It catches your eye, but remember, licensed moneylenders can’t do that. They can’t offer loans without any interest charges. 

So, before jumping into any offer, take a moment to exercise caution and gather additional information. Seek clarity and ensure that the claims align with what licensed moneylenders can actually do.

9. No Loans to Underage Borrowers

Licensed moneylenders cannot provide loans to individuals who haven’t reached the age of consent, which is 18 or 21 years old, in order to protect the vulnerable. The purpose is to ensure that minors do not become entangled in financial obligations that may be overwhelming or confusing for them. Therefore, if you are still young, it is advisable to seek guidance from a responsible adult or guardian when managing your finances.

10. Operating Outside a Licensed Place of Business

When it comes to licensed moneylenders in Singapore, the walls of their designated business premises bind them. This rule keeps them in check, ensuring that they operate in a regulated setting where authorities can easily monitor and scrutinize their actions. By dealing with moneylenders who maintain a genuine physical presence, you can avoid dodgy schemes and deceitful practices that might jeopardize your financial well-being.

Example: Picture this – you walk into a licensed moneylender’s office, and their premises exude an air of professionalism and trustworthiness. The neatly arranged desks and friendly staff create an atmosphere that makes you feel secure about borrowing money. This sense of legitimacy is what you deserve when seeking financial assistance.

The Bottom Line

When it comes to borrowing money, it’s crucial to understand the limitations placed on licensed moneylenders in Singapore. By knowing what these moneylenders can’t do, you gain the knowledge to protect yourself and make informed decisions. Remember, choosing a reputable institution like Accredit Moneylender is key. They not only adhere to the regulations but also offer a positive borrowing experience, ensuring your financial well-being. So, keep in mind what moneylenders can’t do, and make the right choice for your financial needs.

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