Transparency

Licensed Money Lenders

Firstly, all licensed money lenders in Singapore are required to explain to you the terms and conditions of the loan in a clear and succinct manner.

The law requires moneylenders to explain the terms of a loan to you in a language you understand and to provide you with a copy of the loan contract. Make sure you fully understand the terms of the contract, in particular, the repayment schedule, the interest rate charged and the fees applicable.

Unlicensed Money Lenders

Unlicensed money lenders would like to speed up the process of the loan and avoid as much paperwork as possible. They will also often skip the step of meeting up on an official premise.

Interest Rate

Licensed Money Lenders

Licensed lenders will only give you an interest rate up to 4% per month as this is mandated by law. The terms and conditions of the loan agreement are very transparent and should be validated by a legal officer.

Unlicensed Money Lenders

Conversely, unlicensed money lenders can charge a ridiculously high interest rate and late interest rate, often well above 4% per month.

Moreover, many of them may choose to include other implicit costs, such as processing fees and other miscellaneous payments.

Advertisement

Licensed Money Lenders

Under the advertising rules, licensed money lenders in Singapore are only permitted to advertise through these 3 channels:

  • Business or consumer directories
  • Websites belonging to the licensed money lender
  • Advertisements placed within or on the exterior of the licensed money lender’s business premises

Unlicensed Money Lenders

The advertising rules can help you differentiate between licensed and unlicensed moneylenders. If you receive flyers, SMSes, emails or other forms of advertisements that 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. you should report the advertisements to the Registry at 1800-2255-529 or via our website.