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How to Identify a Genuine Licensed Moneylender in Singapore?

Genuine Licensed Moneylender in Singapore

With the recent changes in regulations, consumers need to be informed on protecting themselves from falling into a trap. Borrowers planning to borrow from money lenders should safeguard themselves and make more informed choices. These general guidelines will help you identify a genuine licensed moneylender on the moneylender list.

The Singapore government enacted the Moneylenders Act (Chapter 186) in 1993 and took effect from July 1, 1994, which reformed Singapore’s money-lending system. This bill created two categories of licensed moneylenders: “Licensed Money Lending Agencies” and “Licensed Moneylenders.” 

Key Differences Between Licensed Moneylenders and Money Lending Agencies

A distinction is made between these two entities as Licensed Money Lenders are not subjected to as stringent regulation as Licensed Money Lending Agencies.


Licensed money lending agencies on the moneylender list offer a more comprehensive range of services than licensed moneylenders. The services include loan products such as hire purchase agreements, installment sale agreements, and deferred payment sale agreements. 

They may also take security over other assets apart from immovable properties to facilitate their loans. 

On the contrary, licensed moneylenders can only lend up to S$2,000 for personal debt consolidation purposes or S$3,000 for commercial debt consolidation purposes.

Capital Requirements

Licensed money lending agencies required to have a minimum of S$5 million in paid-up capital, while licensed moneylenders are not subject to this requirement.

Bond Requirement

Licensed money lending agencies required to post a bond of S$100,000 with the Registry of Moneylenders. While licensed moneylenders must post a bond of only S$50,000. 

As such, agents cannot tell consumers that they can get bonded less if they go with an unlicensed lender or do their own financing payday loans themselves. This is illegal. 

It is good practice for every consumer financing any major purchase to take an independent view of the transaction, separate from their vendors.

Capital Gain Tax Exemption

Licensed moneylenders exempted from paying a capital gains tax of 30% on profits earned. If they dispose of their properties within three years after the loan date. Licensed money lending agencies do not enjoy this tax exemption.  

Loan Limits

Licensed moneylenders limited to lending up to S$3,000 under one loan agreement or a total of S$10,000 for multiple loans given at the same time to the same borrower during a period not exceeding 12 months. 

In contrast, licensed money lending agencies are not subject to such limits. Borrowers must know how much they are borrowing to set their expectations correctly.


Licensed money lending agencies can charge a minimum of 1% per month interest rate on loans, with an additional service fee not exceeding 5% for credit assessment and arrangement fees. 

Licensed moneylenders also allowed to charge a 1% per month interest rate. But they may not charge any service fees if their charges amount to more than 3% of the loan amount or S$50, whichever is higher. If it does not exceed 3%, lenders can charge no service fee apart from GST.

Other Fees

You cannot tell whether a moneylender is genuine by looking at how much commission they charge you, which could be as high as $300. 

Licensed moneylenders not allowed to charge specific fees. Such as upfront and arbitrary administrative fees, cancellation fees, and processing fees which licensed money lending agencies may charge. However, you should always ask for a breakdown of the charges if they are trying to mislead you.

Business Locations 

Licensed moneylenders only allowed to conduct business activities from their registered places of residence or their offices. On the contrary, licensed money lending agencies can conduct business activities at any place, including residential premises.


Licensed moneylenders subject to much more stringent regulations, which go beyond what mentioned above.