Guide to Choosing Licensed Moneylenders
SG Top Choice
Like this project
Posted Jun 3, 2025
Guide on choosing licensed moneylenders in Singapore and India.
Moneylender – What It Means and How to Choose the Right One
Sometimes in life, we need money fast. Whether it’s for a medical emergency, school fees, car repairs, or any unexpected expense, not everyone has savings ready. While banks are one option, their approval process can be slow and strict. That’s where a moneylender becomes helpful.
A moneylender provides short-term loans, often with faster approval and simpler rules than banks. But before you borrow, you must understand how it works, what risks are involved, and how to choose a safe and trusted lender.
In this guide, we’ll explain everything you need to know about moneylenders, especially in places like Singapore or India, where licensed moneylenders operate under strict rules.
What Is a Moneylender?
A moneylender is a person or company that lends money to borrowers for interest. In many countries, only licensed moneylenders are allowed to operate legally. They follow government rules for how much they can charge and how they collect repayments.
There are two types of moneylenders:
Licensed Moneylenders – Registered with the government and follow legal rules.
Unlicensed Moneylenders – Also called “loan sharks.” They operate illegally and often use threats or high fees.
Borrowing from a licensed moneylender ensures you are protected under the law.
Why People Use Moneylenders
Not everyone qualifies for a bank loan. That’s why many people turn to licensed moneylenders. Here’s why:
Faster Processing
Loans are often approved on the same day.
Less Paperwork
Unlike banks, moneylenders usually ask for basic documents like ID and income proof.
Flexible Credit Rules
Even if your credit score is low or you have past loan problems, many licensed moneylenders still offer you a chance.
Smaller Loan Amounts Available
Need just a few hundred or thousand dollars? Moneylenders allow small loans, while banks often require you to borrow bigger amounts.
Is It Safe to Borrow from a Moneylender?
Yes—if the lender is licensed.
Licensed moneylenders must follow rules like:
Charging no more than 4% monthly interest (in Singapore)
Giving borrowers a clear loan agreement
Explaining all fees and repayment terms
Using legal methods to collect payment
If the lender is not licensed, you may be exposed to:
Very high interest rates
Threats or harassment
Hidden charges
No legal protection if something goes wrong
So always check the official list of licensed moneylenders before borrowing.
How to Find a Licensed Moneylender
If you’re in Singapore, visit the Ministry of Law’s Registry of Moneylenders to see the latest approved list.
In other countries like India, check with the state government or local financial regulator.
A good licensed moneylender will:
Display their licence number
Have a physical office
Provide a full loan breakdown
Answer your questions clearly
What Loans Do Moneylenders Offer?
Licensed moneylenders offer different loan types based on your needs:
✅ Personal Loan
For general use—bills, travel, school fees, etc. Paid back monthly.
✅ Payday Loan
Short-term loan until your next salary. Often used to handle urgent bills.
✅ Foreigner Loan
Given to foreigners working in Singapore or other countries, with valid work passes.
✅ Business Loan
For small business owners needing capital for inventory, rent, or expenses.
✅ Debt Consolidation Loan
Helps you combine multiple debts into one loan for easier repayment.
What Documents Are Needed?
You’ll usually need:
NRIC/ID/Passport
Proof of income (payslips, CPF, or bank statements)
Proof of address (utility bills or rental agreements)
Work pass or visa (for foreigners)
Having these ready helps speed up the approval process.
What to Check Before Borrowing
To borrow safely, look for these things:
📋 Transparent Loan Agreement
Always get a written loan contract. It should include:
Loan amount
Interest rate
Monthly repayment
All extra fees
Late payment conditions
📉 Legal Interest and Fees
In Singapore, licensed moneylenders can charge:
Up to 4% interest per month
Up to 10% of loan amount as admin fee
$60 max for late payment fees per month
🔁 Flexible Repayment Options
The best moneylenders let you choose your repayment schedule: weekly, bi-weekly, or monthly. They may even allow early repayment with no extra charge.
🗣️ Clear Customer Support
A trusted moneylender should:
Explain things in simple language
Not pressure you to borrow more
Respond politely and professionally
Signs of a Bad or Illegal Moneylender
Stay away from any moneylender who:
Contacts you via SMS or social media with offers
Asks for upfront fees
Offers loans without any documents
Refuses to give a written contract
Uses threats or abusive language
These are signs of a loan scam or unlicensed moneylender.
How to Repay a Loan Without Stress
Here are some tips:
Set Reminders
Mark repayment dates on your phone or calendar.
Pay On Time
Avoid late fees and protect your credit record.
Talk to the Lender Early
If you have trouble paying, contact the lender early to ask for help or a new plan.
Keep All Receipts
Always get proof of payment—SMS, email, or printed receipts.
What If You Can’t Repay?
If you lose your job or face other financial problems:
Contact the moneylender early
Ask for a lower instalment or longer term
Never borrow from another lender to repay the first loan
Speak to a credit counsellor if needed
Licensed moneylenders will listen and try to work out a solution. Unlicensed ones may use threats—report them immediately if they do.
Final Words
A moneylender can be a helpful way to get short-term funds when you really need them. But only if you choose the right one.
To stay safe:
✅ Borrow only from licensed moneylenders
✅ Always read and understand the loan agreement
✅ Don’t borrow more than you can repay
✅ Compare 2–3 lenders before deciding
✅ Report any suspicious or illegal lenders
Borrowing is not a bad thing—borrowing smartly is what matters.