Licensed Moneylender Interest Rate: How to Compare It?

The concept of moneylending and financing in Singapore started centuries ago. Today, licensed moneylenders in Singapore proffers a varied selection of secured and unsecured loans. These different types of loans include the licensed moneylender interest rate in Singapore and other fees.

Interest rates are essential factors that licensed moneylenders in Singapore charge their borrowers. These interest rates could either be variable or fixed and chargeable on a monthly or yearly basis. If you’re currently searching for the lowest interest rate in Singapore, you have to compare licensed moneylenders in Singapore.

Compare and finally find the best-licensed moneylender interest rates in Singapore. Here’s a comprehensive guide to assist you in navigating through the process.

Licensed Moneylenders in Singapore

Dealing with loans is a serious matter. Getting a loan is used to pay unplanned expenses, emergencies, vehicle repairs, home renovations, or academic fees. Thus, it’s essential to work with a licensed moneylender in Singapore. 

Licensed moneylenders in Singapore are famous due to their financial assistance. These businesses grant secured and unsecured loans, such as personal loans. Their popularity stems from Singapore’s competitive licensed moneylender interest rates and easy access to personal loans and other financial products.

These businesses or individuals focus on providing financial assistance to their borrowers via moneylending activities. The Ministry of Law duly regulates their moneylending operations. 

Here are crucial details to affirm the legitimacy of an accredited moneylender in Singapore: 

1. Listed on the Ministry of Law’s site:

Every licensed moneylender in the country must be registered in the Registry of Moneylenders established by the Ministry of Law. The list shares the moneylender’s business name, address, contact number, licence number, and website. 

The Ministry of Law made it a point to provide all the critical information as the details only partially establish the legitimacy of the moneylending business. It primarily assists borrowers in their quest to find legitimate moneylenders for loan applications.

A borrower must visit the Ministry of Law’s website, search for the Registry and obtain the necessary information.

2. Provide the loan contract without delay:

Upon applying for a loan, the approved moneylender will provide the contract outlining the terms and conditions associated with the loan. The contract isn’t given immediately to the borrower, as SOP has to be followed, such as:

Gathering of Information

An authorised lender will gather your information, notably your details, credit history, employment status, any outstanding debts, or income. They’ll ask you to pass documents and supporting papers like NRIC, bank statements, and payslips. 

Some details are already accessible from the Moneylenders Credit Bureau (MLCB). But certified lenders may request such information to verify the legitimacy of the documents and borrower’s background.

Licensed Moneylender Interest Rate in Singapore and Loan Proposal

As soon as the moneylender has acquired all the necessary details, they’ll prepare the proposal. It’s the preliminary document outlining the terms and conditions of the loan.

The proposal mainly comprises the loan amount, licensed moneylender interest rate in Singapore, repayment period and schedule, and other fees or charges applicable to the loan. It’s the moneylender’s legal duty to the borrowers to explain the contract as detailed and as thoroughly as possible. So the borrower won’t miss anything essential.

Borrowers can express their concerns and ask for clarifications regarding the loan proposal. The registered moneylender shall assist the borrower to their full capability to guarantee the best customer service.

The primary purpose of the loan proposal is to provide the borrower with the loan’s overview. Thus, giving them ample background and time to decide if the loan fits their financial requirements.

Loan Contract with Licensed Moneylender Interest Rate in Singapore

When the borrower and moneylender meet an agreement regarding the loan, the latter prepares the proposal. 

It’s a contract that fully outlines the loan terms and conditions. It includes the licensed moneylender’s interest rate in Singapore, fees, repayment methods, etc. It isn’t a preview but a now legally binding agreement and contract between the moneylender and borrower. 

The inclusion in the contract is parallel to the proposal. However, the specific distinctions are details on defaulting loans and their consequences, the procedure to resolve disputes, and the payment process. 

The contract shall act as a document that aims to proffer protection to both legal moneylender and borrower by guaranteeing that every detail stipulated in the loan is clear and transparent, to which both parties have legally agreed.

3. Doesn’t Engage in Intimidating Tactics or Harassment

Licensed moneylenders in the country will never engage in intimidation tactics or harassment when collecting repayments for a loan. In truth, they’ll often send reminders and notifications only. 

If a lender does act unethically towards a borrower, the latter may file a report to the relevant authorities. In particular, the Registry of Moneylenders at 1800-2255-529 and the Singapore Police Force at hotline ‘999’.

4. Licensed Moneylender Interest Rate in Singapore and Loan Transparency

Another positive characteristic a certified moneylender has is transparency, specifically regarding the upfront fee. A licensed moneylender interest rate in Singapore is also disclosed.

Some payments that the contract may include are late and early repayment fees. All of which can affect the total amount repayable by a borrower. Thus, to assist the borrower in understanding their overall dues, a legal lender opts to be transparent with all the fees and steer clear of hidden charges.

The borrower must always exercise their legal rights on every matter, including understanding these other fees. 

Moneylending Policies and Regulations in Singapore

The Singapore Parliament is working overtime to provide the best moneylending assistance to their community. To ensure the process is without fail or undesirable outcomes, the Ministry of Law established the Moneylenders Act. 

Every moneylender in the country who’s earned their licences must commit to the act. This particularly includes:

The 4% Licensed Moneylender Interest Rate in Singapore

The Moneylenders Act in Singapore is the laws and regulations that legal lenders must abide by. 

Among the most notably recognised regulation from the act is the 4% max interest rate that legal lenders may impose on all their borrowers. Authorised lenders cannot exceed the demanded interest rate whether the loan is secured or unsecured.

It’s currently the only legal limit since its activation on the 1st of October 2015. The law shall punish any attempt to increase the maximum interest rate.

10% Administrative Fees

Moneylenders in Singapore may charge an administrative fee. But, it’s only a one-time payment and is capped at 10% of the principal loan’s amount. 

It’s the only administrative fee they’re allowed to charge the borrowers. Any excuse to charge an “additional” administrative fee means a breach of the Act.

Late Payment Fees

Borrowers may sometimes fall into trouble and pay their loans later than the agreed dates. Licensed moneylenders may charge a capped $60 monthly fee for circumstances like these. 

Maximum Loan Amount

What is the maximum loan amount, and when does it apply? A licensed moneylender may disburse a lump amount sum to their borrowers. But it isn’t unlimited.

It is capped and still by the Moneylenders Act. The criteria for the max loanable amount accessible to a borrower may rely on their specific qualifications, such as:

  • Annual income classifications of less than $10,000, not more than $20,000, or at least $20,000 
  • Nationalities of being a Singaporean Citizen, Permanent Resident, and foreigner residing in the country

How do these factors affect the accessible max loan amount? A brief and concise explanation is provided in the table below for easier comprehension.

Max Loan AmountAnnual IncomeNationality
$500 & $3,000Under $10,000Foreigners in the country can get a $500 max loan amount. Singapore Citizens and Permanent residents may take a $3,000 loanable amount.
$3,000Earning a minimum of $10,000 and not exceeding $20,000Singaporean Citizens, Permanent Residents, and foreigners residing in the country are approved for a $3,000 max loanable amount.
Six times the monthly salaryMinimum of $20,000Singapore Citizens, Permanent Residents, and foreigners in Singapore obtaining a $20,000 minimum a year are permitted to acquire up to six times their monthly salary.

It’s important to understand that the max loanable amount isn’t necessarily the total amount the borrower can acquire. Additional factors may influence the total amount, like the type of loan applied for and creditworthiness. 

A borrower’s high credit score, stable employment, and favourable income may push the possibility of a borrower being eligible for a more considerable loan amount. In contrast,  individuals with lower credit scores or unstable employment backgrounds could get smaller loans. 

Comparing Licensed Moneylender Interest Rate Singapore

Are there specific changes to the interest rates an accredited moneylender may charge its borrower? To obtain the information you need, here are some details regarding interest rate comparison from a licensed moneylender in Singapore:

1. Factors Affecting Licensed Moneylender Interest Rate in Singapore

A licensed moneylender assesses and evaluates whether all their borrowers are eligible for a loan. Furthermore, the borrower’s credit history, loan amount, income, and type of loan are substantial factors that may alter the interest rate a registered moneylender can charge the borrower.

A borrower with a good credit history, stable job, and income may qualify for a lower interest rate. At the same time, those who have poor credit scores and low incomes are considered high-risk borrowers.

An additional factor is the loan tenure, as the borrower who takes a more significant loan amount is chargeable of a higher interest rate than someone who borrows smaller funds. More extended repayment periods also tend to acquire higher interest rates.

Thus, before setting up an appointment with an accredited moneylender in the country, consider these factors first. Be sure to apply only when you’ve fully understood the possible interest rates you’ll acquire to help you plan the loan process and repayment periods better.

2. Licensed Moneylender Interest Rate in Singapore for Loans

A registered moneylender in the country offers diverse classifications of loans. Among these are personal loans, payday loans, and business loans. It’s a fact that there’s a 4% maximum interest rate capping for all loans in the country.

Nevertheless, there are circumstances in which the licensed moneylender interest rate in Singapore can be lowered depending on the loan applied for

Personal Loans

Borrowers with a good to excellent credit score and accompanied by a steady income are considered low-risk borrowers. Thus, authorised lends may offer lower interest rates.

Licensed moneylenders impose an interest rate from 1% to 4% monthly.

Payday Loans

These have higher interest rates because of the shorter repayment terms and may lead to higher-risk default. Nonetheless, with a good credit background and a reliable source of income, a certified lender could propose lower interest rates.

The Ministry of Law says the maximum interest rate for payday loans is 4% monthly.

Business Loans

SMEs with solid business plans, backed with stable financials, may be granted lower interest rates. Business loans’ interest rates vary as floating or fixed. The typical range is from 3% to 10% per annum.

3. Licensed Moneylender Interest Rate in Singapore is Fixed

The Ministry of Law encourages all approved lenders to uphold the maximum monthly interest rate of 4%. It ensures that all borrowers are protected by the law when all licensed lenders follow the regulations accordingly.

But, it’s possible to earn a lower interest rate from a certified moneylender if the borrowers show good credit scores and a steady income source.

4. Licensed Moneylender’s Credibility and Reputation

Before working with an approved lender in the country, research your top picks from the Registry of Moneylenders. You may assess and evaluate these moneylending businesses’ financial service capacities to ensure you’ll acquire reasonable, legal, and fair financial assistance.

Always look for non-biased websites that provide customer reviews and testimonials to gauge the lender’s reputation and customer service capabilities. Through your research, you’ll also obtain vital information regarding the interest rates the moneylending businesses offer their clients legally.

Sample Comparison of Licensed Moneylender Interest Rate in Singapore

Can you calculate interest rates and fees from a moneylender in Singapore? Of course, you may do so. Here’s a quick and easy $10,000 personal loan max amount for 12 months: 

These comparisons are only examples. It’s to provide you with an illustration of how these would be calculated in real-time.

  • LML A:
  • The interest rate of 3.5% monthly
  • An administrative fee of 5% of the principal loan amount
  • Late payment fee of $50 monthly
  • LML B:
  • The interest rate of 3.5% per month
  • An administrative fee of 10% of the principal loan amount
  • Late payment fee of $80 per month
  • LML C:
  • The interest rate of 4% monthly
  • An administrative fee of 10% of the principal loan amount
  • Late payment fee of $60 per month

Among these examples, it shows that Lender A provides the lowest interest rate and administrative fee among the other lenders. Lender A grants the most cost-efficient terms for you. 

However, Lender B has a monthly $80 late payment fee, which is against the Act. You may complain to the Registry of Police Force regarding the matter.

Compare a Licensed Moneylender Interest Rate in Singapore For Informed Decision

Getting a loan is a legal obligation. You must understand the specific details attached to the loan to ensure you won’t have any problems in the future. 

For one, you must always choose a loan from a licensed moneylender. It’s to ensure a legal and safe borrowing experience. Consider your needs and financial situation before applying for a personal loan or other financial option. 

Analyse your total debt responsibility by comparing a licensed moneylender’s interest rate in Singapore. Remember that to become a responsible borrower, you must compare the best interest rates and fees to avoid hurting your credit score and loan opportunities. 

Now, do you need to borrow money with a fair interest rate? Apply now for a loan with the best interest rate when you click here! 

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