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What to Know Before Taking a Loan from a Singapore Licensed Moneylender
21 Jul 2025 | Monetium Credit
Many Singaporeans find themselves in need of cash, fast. When that happens, the most common course of action is to take a loan. The institutions that can lend you money are the banks, the moneylenders and the unions. Among these, moneylenders are probably the most common option, because unlike banks and unions, our terms are a lot more flexible and versatile.
People borrow from moneylenders all the time, but if you’ve never done it before, then there are some things you should know beforehand, so that you can get the best borrowing experience.
In this article, we are going to look over the main concepts regarding the topic, we’re going to analyze the eligibility criteria for a loan and also address some of the important questions to ask before signing a loan.
What’s the Difference Between a Licensed Moneylender and an Unauthorized Moneylender?
A licensed moneylender is a financial institution that has been approved by the Ministry of Law to operate under the Moneylender Act. Monetium Credit is a licensed moneylender, and that means our activity is strictly regulated and monitored by the Ministry of Law. For you, as a client, that means that:
- The interest rate cannot go above 4% per month
- Late interest cannot go above 4% per month
- Late fees cannot exceed $60 per month
- The administrative fees cannot exceed 10% of the principal loan
This is all done in order to protect you, the borrower, and ensure correct borrowing and lending practices. When collaborating with a licensed institution, you can also report any issues to the Registry of Moneylenders, your interest and fees are all capped, and you get to enjoy a safer, not to mention legal, experience.
A licensed institution will never approach you via SMS, Social Media texts or phone calls. The law requires us to meet the borrower face to face to further ensure the safety of the borrower. With a legal institution, you will never be asked to transfer any “processing fees” or other types of pre-disbursement money.
Unauthorized moneylenders (UML) are what it’s generally referred to as “loan sharks” or “Ah Longs”. They are predatory scams that do not operate under the Moneylender Act, they are not authorized by the Ministry of Law and they do not respect any responsible measures. These loan sharks have no limit in terms of the rates they impose and they conduct no analysis to determine your capability to pay off the loan. The Police of Singapore advises that their practices often involve violence and harassment tactics.
We are not going to dwell more on the topic of unauthorized moneylenders, because there is plenty of information on that topic on the internet and you’re here to find out what you need to know before borrowing from a licensed institution.
What Is the Eligibility Criteria to Borrow from a Singapore Licensed Moneylender
The eligibility criteria may differ from place to place, but we can confidently say that here at Monetium Credit we offer some of the most flexible eligibility criteria. We do that because we consider every individual deserves at least the right to access this money and we understand that, when you need money, being told you don’t qualify can be a very frustrating and disheartening experience.
Our eligibility criteria will differ from credit to credit, simply because the particularities of each one require different forms of justification, but what you should know is that it is mandatory that you’re over the age of 21 before trying to contract any loan, you will need some form of identification, a NRIC number or a passport, you will most likely need some sort of proof of income (you can go for a computerized slip or a bank statement) and you might also need proof of residency (you can use any household bills for that).
In addition to these, we might ask you for other documents, just to make sure that we’re offering you the best option you can get. This loan approval process can be tedious, but it is like that for your own benefit and here at Monetium Credit we are very thorough with our processes in order to offer you the best experience possible.
Questions to Ask Before Signing a Loan Agreement
It is crucial that you address any questions before signing an agreement. Did you know that an authorized institution is required by law to explain to you everything you might want to know, for as many times as you need? Not only that, but we are also obliged to use easy-to-understand vocabulary so if you ever feel like you don’t understand something, do not refrain from asking as many questions as needed to sort things out.
- Question No. 1: What is the total repayment amount, including every fee, tax and interest? We always make sure the borrower is aware at all times of the amount of money owed, but not every moneylender out there is as thorough in this matter.
- Question No. 2: Can the loan terms be structured later on? Here at Monetium Credit we are very flexible and our consultants will try to come up with solutions that best fit your interests.
- Question No. 3: How will this loan affect my credit? Every moneylender is required by law to report your details to the MCLB. You might want to ask about the ways in which this report will influence your credit score.
Conclusion
Borrowing from a Singapore licensed moneylender can be a great financial decision if you know what to expect from the interaction. Remember to never loan from unauthorized moneylenders, always ask any questions you might have, get informed about the contract and contact your moneylending institution of choice for more information. If you want to learn more tips and tricks, how to be more prepared for a loan application or what types of loans you can get from us, you can always visit our page or contact our advisors for more information.
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