Check the lender before you check the contract
A well-written contract from an unlicensed lender is still an illegal loan, so the first step has nothing to do with the paperwork.
Look the lender up on the Registry’s list of licensed moneylenders. Confirm that the business name, licence number and business address all match. The address matters more than people expect, because that is where you will have to go in person before any loan can be granted.
Think about how you found them. Licensed moneylenders may only advertise through business or consumer directories, their own website, and their business premises. If you were approached by SMS, WhatsApp, a flyer or a cold call, treat it as a red flag.
The terms that decide what you actually pay
Principal
The amount you are borrowing. Every other figure in the contract is calculated from it, including the legal ceiling on what you can be charged.
Check the amount you will actually receive. A licensed moneylender may deduct a loan approval fee of up to 10% of the principal upfront, so the cash in your hand can be lower than the principal. That is the only deduction allowed. A lender that withholds any other part of the principal, for any reason, is breaking the rules.
Interest rate
Interest is capped at 4% per month, regardless of your income or whether the loan is secured. The contract should state your rate clearly. If it shows only an instalment amount, ask for the rate in writing, and check whether it is quoted monthly or annually.
Interest must be calculated on a reducing balance: only the principal still outstanding, after deducting what you have repaid towards principal, can be used to work out interest. If you borrow $10,000 and have repaid $4,000 of principal, interest can only be charged on the remaining $6,000. A clear repayment schedule shows how each instalment splits between principal and interest. If yours shows a single figure per instalment, ask for the breakdown.
Tenure and repayment schedule
How long the loan runs, how many instalments you will make, how much each one is, and when each falls due.
Read the schedule against your payday. A due date two days before your salary arrives is a late payment waiting to happen, and it is far easier to change before signing than after.
Total repayable
The single most useful figure in the contract: everything you will pay if every instalment is on time. Monthly instalments are designed to sound manageable. The total tells you whether the loan is worth taking. If the contract does not state it plainly, add up the schedule yourself or ask the lender to do it in front of you.
The only fees a licensed moneylender can charge
The Registry permits exactly three kinds of charges beyond interest:
| Charge | Legal limit |
|---|---|
| Loan approval fee | Up to 10% of the principal, when the loan is granted |
| Late fee | Up to $60 for each month of late repayment |
| Legal costs | Only those ordered by a court in a successful claim to recover the loan |
There is also an overall ceiling. Interest, late interest, the loan approval fee and late fees together cannot exceed the principal. Borrow $5,000, and everything you can be charged on top is capped at $5,000, however long the loan runs.
If your contract includes any charge outside that list, whether it is called a processing fee, a documentation fee or an early repayment fee, it is not one the Registry permits. Ask what it is, and do not accept “it’s standard” as an answer.
What the contract says about late payment
Late interest is capped at 4% per month, and only on the amount that is overdue, not on your whole outstanding loan. If you borrow $10,000 and miss a $2,000 instalment, late interest can be charged on that $2,000, not on the $8,000 that is not yet due. The $60 monthly late fee is separate.
Missed payments also follow you outside the contract, because licensed moneylenders report loan information to the Moneylenders Credit Bureau.
What a licensed moneylender must do before you sign
Meet you in person and check your original ID. Before granting a loan, a licensed moneylender must meet you face to face at its approved place of business and physically verify your identity against your original identification document. A loan granted entirely online is not permitted, and a lender that approves a loan over the phone, SMS or email before receiving your application and supporting documents is not exercising the care the rules require.
Explain the terms in a language you understand. If English is not the language you are most comfortable with, ask for the contract to be explained in one you are.
Give you a copy of the Note of Contract. Keep it. You will need it if anything is ever disputed.
Stay within your borrowing limit. For unsecured loans, the total you can borrow across all licensed moneylenders is capped by your income and residency status. A lender willing to go well beyond that is a concern, not a favour.
What a licensed moneylender cannot do
Any of these is a reason to stop:
- Keeping your NRIC, passport, work pass, driver’s licence or ATM card
- Asking for your Singpass user ID or password
- Asking you to sign a blank or incomplete Note of Contract
- Withholding any part of the principal beyond the loan approval fee
- Charging anything outside the permitted fees, or above the caps
- Using abusive language or threatening behaviour
The cooling-off period: three business days to change your mind
For unsecured loans (other than business loans) disbursed on or after 15 September 2026, you have a cooling-off period of three business days after disbursement. The day of disbursement does not count, and neither do weekends or public holidays.
If you cancel within that window, you repay the principal you received plus part of the loan approval fee: no more than $50 on loans of $5,000 and below, or no more than 3.5% of the principal on larger loans, and never more than the fee you actually paid. No interest is charged.
The Registry’s own example: on a $10,000 loan with a $1,000 fee deducted upfront, you receive $9,000. Cancel during the cooling-off period and you repay at most $9,350.
A licensed moneylender must let you cancel if you meet the requirements. Refusing is a breach you can report to the Registry. Once the three business days pass, the contract continues on its original terms.
After you sign: the records you should receive
A receipt for every repayment. Check each one for your name, the amount and the date, and keep them all.
A statement of account every January and July. It shows the charges imposed, the payments recorded and your outstanding balance. Check it against your receipts and schedule, and raise any discrepancy straight away.
A checklist for the signing
- The lender’s name, licence number and address match the Registry’s list
- You are signing in person at that address, and your original ID has been checked
- The amount you will receive is the principal minus only the loan approval fee
- The interest rate is stated, and is no higher than 4% per month
- The schedule shows how each instalment splits between principal and interest
- Every fee appears on the Registry’s list of permitted charges
- The total repayable is stated, and you have checked it against the schedule
- The due dates work with your payday
- Everything has been explained in a language you understand
- You are leaving with a copy of the Note of Contract and all your own documents
If something doesn’t match
Do not sign while you are unsure. A legitimate lender will wait while you ask questions or take the contract home to read. Pressure to sign immediately is itself a signal.
If you believe a licensed moneylender has breached the rules, report it to the Registry of Moneylenders at 1800-2255-529. If you suspect the lender is not licensed at all, or you receive loan offers by SMS, report it to the police.
Common questions
Can I get a loan from a licensed moneylender entirely online? No. You can start an application online, but the loan can only be granted after you attend the lender’s approved place of business and your identity is verified against your original ID.
Can I repay early? Ask before signing. The Registry permits only the three charges listed above, and an early repayment fee is not one of them.
Where can I find the official rules? The Registry of Moneylenders publishes its FAQs on borrowing from licensed moneylenders on the Ministry of Law’s website. It is the authoritative source, and the one to rely on if anything here falls out of date.
