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First-Time Borrower? Here’s What to Expect when Applying for a Loan with a Licensed Moneylender
5 August 2025 | Monetium Credit
If you are getting ready to apply for a loan for the first time, it can be a really overwhelming experience. Many people feel very stressed when borrowing. But most of the stress comes from not knowing enough information about borrowing and loans in general. If you are a first-time borrower in Singapore, you came to the right place. This article will give you all of the introductory information that you need to know before borrowing. You will learn about the application process, about loan types, and common terms that you should know. Maybe you’ve only heard about borrowing from a bank, and you don’t really trust moneylenders. Well, we are here to change that.
Singapore’s licensed moneylenders, just like the banks, are regulated by the government. They cannot ask you for infinite interest rates or tricky fees. It’s just an alternative to regular banks for those who want this option. We will talk about the difference between the two entities, and which one you should choose depending on what you need. But let’s start with the basic information that you need in order to fully understand this article. If you already know the fundamental information, this might be great to just make sure you know it right.
Who Are Licensed Moneylenders?
As mentioned previously, moneylenders are an alternative to banks. They offer loans to both businesses and individuals. Licensed moneylenders in Singapore are regulated by The Ministry of Law. This means that they are registered and monitored by the government. They subject to laws that protect borrowers, which means that you are not in any kind of danger. A licensed moneylender is required to disclose all information related to the loan terms to you. They cannot hide anything to try and trick you. Also, if they are mistreating you in any way, the law is on your side. If you were worried that they are less trustful compared to banks, that is not true!
Moneylenders versus Banks
Why would you choose a moneylender instead of a bank? If this is a question you have, know that’s it’s a valid one. But let’s make it clear to you why so many people prefer the first option more and more often. Banks come with extremely strict eligibility criteria that you might not be able to meet. If we are being honest, everything about borrowing from a bank is very strict. On the other hand, licensed moneylenders have more flexible and accessible options for everyone. You can apply and be approved even if you have no credit score or a low one.
If you need funds quickly, like in a day or two, a bank could never help you. But a moneylender can be the one to offer you a loan in this situation. With moneylenders, you can loan smaller amounts for shorter periods of time. Moreover, if you are self-employed or a freelancer, you might have a hard time having your loan request approved by any bank. One of the few downsides of borrowing with moneylenders is that their interest rates are usually a little bit higher than those of banks. Therefore the choice between the two depends on what you want and what you need, but also on what you can offer (e.g. a high or low credit score).
The Types of Loans You Can Get
The types of loans that you can get with moneylenders are basically the same as the ones you can get with a bank. So, if you want to apply for a loan, you need to know the specific reason you need to for. Don’t take a loan just because that sum of money sounds nice to have. You should have a purpose for every cent of that loan. Not borrowing responsibly can lead to debt, which is not something you want to do. Now that you know the reason why you want the loan, you must identify the type of loan that you need:
- Personal loan – A personal loan is the most versatile type of loan, because there are so many things you could do with it. You could cover wedding expenses, medical expenses, or pay for a holiday. Major purchases, home renovations and debt consolidation can also go in here.
- Mortgage loan – A mortgage loan is a loan that you take in order to buy a house, land or real estate.
- Renovation loan – As the name says, this type of loan is used to renovate your home.
- Payday loan – A payday loan is a short-term loan due until your next paycheck. It’s meant for urgent and important payments (e.g. bills)
- Business loan – A business loan is destined for businesses that need some help with financing their activity.
- Debt consolidation loan – While you can do this with a personal loan, there is a specific loan for debt consolidation. And it’s when you have multiple loans and you just transform them into a single loan.
The Application Process
- Credit cards are often appreciated for their instant disbursement of funds. However, that only applies if the request is approved.
- Personal loans are often believed to take up to 3 days to transfer, but that is not true. Here at Monetium Credit we know how urgent an emergency is, which
When you want to apply for a loan, you need to know how applying works. In Singapore, you need to be a resident older than 18 years old. You need to provide proof of this, like NRIC and household bills for residency proof. You also need to provide proof of your income. You can apply even if you are working as a freelancer, or if you are working part-time. Depending on the loan type and the moneylender, you might be required to provide some additional documents, but nothing suspicious. After you gather all of the documents you need, you can often apply online.
You can go to the moneylender’s office and apply in person if that’s what you want. But, online application makes the whole thing easier. If you have any information related to the application procedure, you can contact us! With us, it can take as little as an hour for you to get your answer. Applying online saves you and the moneylender lots of time. You get your answer promptly, and you can enjoy your loan quicker. Typically, the moneylender has an Application Form that you can fill out on their website.
is why we made it possible for you to get the money you need, via a personal loan, in just 24 hours. You apply today and come in the second day to pick up your money and get this – no overwhelming interest, capped taxes, and fixed monthly instalments.
Credit Score
When you apply for a loan, your credit score is of great importance. This article by Investopedia gives a more in depth explanation on what credit score is. But, to put it simply, it’s a number that represents your trustworthiness. Lenders use this number to understand how big of a risk lending money to you is. Every lender wants to make sure that they will get their money back. If you have a poor credit score, they will most likely reject you. And, if you do get approved, your interest rate will be higher than that of someone with a good credit score.
Ensuring that you are always making payments on time is the first thing you want to do. Even one late or missed payment can influence your credit score. In Singapore, the credit score ranges from 1000 to 2000. A great credit score would be anywhere between 1900 and 2000. You still have chance of your loan request being approved, but the lower it the credit score is, the higher the interest rate. The length of credit history, your payment history, types of credit that you borrowed before, and how much debt you have, all influence your credit score. Regularly check your credit score to ensure that your information is correct. The Credit Bureau Singapore tells you how you can do this check-up.
The Repayment Period
Depending on the type of loan and the amount that you borrowed, the repayment period will look different. But, typically, there is a period of time throughout which you need to make a monthly payment towards your lender. The amount that you will pay will include the money that you owe, plus the interest rate. If you are late with your payment, late payment fees will be added to that amount. Also, with every late payment, your credit score decreases. Remember that if you missed payments, licensed moneylenders are not allowed to harass you or to threaten you in any way. That is illegal, and you should contact the police in case that happens.
Your Rights as Borrower
You have a right not to be shamed if you don’t make your payments. A moneylender must respect some ethical guidelines. You also have a right to be informed about any fee, any amount of money that you need to pay, or any information related to your loan. If you have any questions, it’s your right to be answered to in a polite way. And last but not least, you have a right to privacy regarding your personal information, But, when you apply for a loan it’s not just about your rights. None of the two sides of this deal are allowed to not hold to their side of the bargain. So you must hold to your end of the promise too.
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