Singapore is one of the top financial hubs in the world. People can require money for several many purposes and yes, you can get loan easily in Singapore. Recently you have read the news that money lending procedures and regulations has been changed with effect from OCT, 2015. There are changes in law how licensed money lenders have to manage their borrowers.  Under these new rules government has tried to protect both lenders and the borrowers.

Money lending rules

  • First of all you are obliged by law legally to fulfill the loan agreement with only licensed lenders in Singapore. You have to read the printed terms and condition and ask the officer to explain terms and condition of loan agreement to you.
  • Consider any existing loan and debt like recurrent fee. You have to be smart about the contract agreement and should have calculated the interest payment and late fees.
  • It is legal responsibility of the money lender (licensed) to let you know about each and every term and condition in language that you can easily understand. Moreover, you have to be given a copy of loan agreement.

How much loan can you take?

The licensed money lending companies are allowed to offer unsecured loan as well. You can take it on following basis:

  • You can take 3000 dollars if your annual income < 20000 dollars
  • If your income level is less than 20000 dollars or more but less than 30000 dollars, you can take up to two months of income loan
  • 4 month loan if your income level is between 30000 dollars to 120000 dollars
  • You can take loan of any amount if your income is equal or greater than 120000 dollars

What would be the rate of interest charged by licensed money lenders?

According to law, the contract that is agreed between June 2012 – Sept 2015, the licensed lenders are obliged to calculate and reveal (EIR) effective interest rate before grating the loan. If the income level of the borrower is less than 30000 dollars, the licensed money lenders could charge interest rate capped 20% (EIR) on the unsecured loans.   If the income level of the borrower exceeds 30000 dollars limit, the EIR is not applicable and it has to be agreed between both parties that is borrower and lenders. According to changes in law after 2015, the licensed money lenders are allowed to charge 4% interest rate each month maximum.  The interest rate cape is applied no matter what the income level of the borrower is and regardless if the loan is secured or unsecured. If the borrower of the money is unable to pay back the amount of loan, the maximum percentage of interest is capped at 4%.


With such rules, the money lenders are having better structure and yes these rules would help them to make good name in the market.  Government is taking hard steps against the unlicensed lenders and it allows people to get loan from licensed money lenders in Singapore.