Moneylending and Credit
Written in plain language for general understanding. This is educational content, not legal advice. Based on Singapore Acts of Parliament, subsidiary legislation, and official government guidance.
Singapore National Law
What is this right?
Singapore regulates moneylending to protect borrowers from predatory practices:
- Licensed moneylenders: All moneylenders (other than banks and finance companies) must be licensed by the Ministry of Law. Check the list of licensed moneylenders on the MinLaw website.
- Interest rate cap: Maximum 4% per month for all loans from licensed moneylenders (regardless of income).
- Late interest cap: Maximum 4% per month on overdue amounts.
- Fee cap: Administrative fees capped at 10% of the loan principal.
- Aggregate cap: Total interest, fees, and late charges combined cannot exceed 100% of the loan principal. If you borrow $1,000, you can never owe more than $2,000 in total.
- Loan limit: Borrowers earning less than $20,000/year can borrow a maximum of $3,000 from each moneylender.
When does it apply?
- You are borrowing from a licensed moneylender in Singapore.
- You suspect you have borrowed from an unlicensed lender (loan shark / "ah long").
What should you do?
- Always verify the lender is licensed — check MinLaw's list before borrowing.
- Read the loan contract carefully — the lender must explain all terms before you sign.
- If you have difficulty repaying, negotiate a repayment plan directly with the lender or seek help from Credit Counselling Singapore (CCS).
- If harassed by unlicensed moneylenders (loan sharks), report to the police immediately — call 1800-255-0000 (police hotline).
What should you NOT do?
- Don't borrow from unlicensed moneylenders — it is an offence for them to lend, and you will not be protected.
- Don't hand over your Singpass, NRIC, or ATM card — legitimate lenders never ask for these.
- Don't ignore debt — this leads to snowballing late charges. Seek help from CCS early.
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