You should keep these key points in mind:
For secured loans, you can obtain a loan of any amount. For unsecured loans, please refer to the table below for the total maximum amount that you may borrow at any time across all moneylenders in Singapore:
|Borrower’s annual income||Singapore Citizens and Permanent Residents||Foreigners residing in Singapore|
|Less than $10,000||$3,000||$1,500|
|At least $10,000 and less than $20,000||$3,000|
|At least $20,000||6 times monthly income||6 times monthly income|
With effect from 1 October 2015, the maximum interest rate moneylenders can charge is 4% per month. This cap applies regardless of the borrower’s income and whether the loan is an unsecured or secured one. If a borrower fails to repay the loan on time, the maximum rate of late interest a moneylender can charge is 4% per month for each month the loan is repaid late.
The computation of interest charged on the loan must be based on the amount of principal remaining after deducting from the original principal the total payments made by or on behalf of the borrower which are appropriated to principal. [To illustrate, if X takes a loan of $10,000, and X has repaid $4,000, only the remaining $6,000 can be taken into account for the computation of interest.]
The late interest can only be charged on an amount that is repaid late. The moneylender cannot charge on amounts that are outstanding but not yet due to be repaid. [To illustrate, if X takes a loan of $10,000, and fails to pay for the first installment of $2,000, the moneylender may charge the late interest on $2,000 but not on the remaining $8,000 as it is not due yet.]
With effect from 1 October 2015, all moneylenders are only permitted to impose the following charges and expenses:
Do not borrow from unlicensed moneylenders. Verify that a moneylender is licensed by checking the list of licensed moneylenders. “Click here to access the list of licensed moneylenders.”
Notwithstanding that the moneylenders are licensed, be mindful if they:
Under the advertising rules, which took effect on 1 November 2011, licensed moneylenders are permitted to advertise only through these three channels: (a) business or consumer directories (in print or online media); (b) websites belonging to the moneylender; and (c) advertisements placed within or on the exterior of the moneylender’s business premises. All other channels are prohibited.
In this regard, the advertising rules can help you differentiate between licensed and unlicensed moneylenders. If you receive flyers, SMSes, emails or other forms of advertisements which are not permitted under the rules, these would be from either licensed moneylenders operating in violation of the rules, or unlicensed moneylenders. Hence, you are advised not to respond to such advertisements. Instead, you should report the advertisements to the Registry at 1800-2255-529 or via our website. Errant licensed moneylenders will be investigated by the Registry and unlicensed moneylenders will be investigated by the Police.
You are advised to seek clarifications on specific terms of the loan contract before signing up with a licensed moneylender, and not to rely solely on the content of advertisements from the moneylender.
You should ensure that: