You should keep these key points in mind:

• You are legally obliged to fulfil any loan contract you enter into with a licensed moneylender.
• Consider whether you are able to abide by the contractual terms, bearing in mind your income and financial obligations. Borrow only what you need and are able to repay. Be mindful that if you are unable to meet the contractual terms, the late payment fees and interest payment will be a financial strain not just on yourself but also on your family.
• 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.
• Consider carefully before agreeing to any contractual term which allows a moneylender to lodge a caveat on the sale proceeds of your real estate property or other assets upon default of the loan repayment. When a caveat is lodged against your property or other assets, you will not be able to sell it without first repaying the moneylender in full. If the repayment is taken from the net proceeds from the sale of the property or other assets, it can wipe out all or a substantial portion of the proceeds.
• You should not rush into and commit yourself to a loan until you are satisfied with the terms and conditions.

For secured loans, you can obtain a loan of any amount. 

For unsecured loans, please refer to the table below for the total maximum amount that you may borrow at any time across all moneylenders in Singapore: 

With effect from 1 October 2015, the maximum interest rate moneylenders can charge is 4% per month. This cap applies regardless of the borrower’s income and whether the loan is an unsecured or secured one. If a borrower fails to repay the loan on time, the maximum rate of late interest a moneylender can charge is 4% per month for each month of the loan is repaid late.

The computation of interest charged on the loan must be based on the amount of principal remaining after deducting from the original principal the total payments made by or on behalf of the borrower which are appropriate to principal.

E.g. if A takes a loan of SGD10,000, and A has repaid SGD4,000, the only remaining SGD6,000 can be taken into account for the computation of interest.

The late interest can only be charged on an amount that is repaid late. The moneylender cannot charge on amounts that are outstanding but not yet due to be paid.

E.g. if A takes a loan of SGD10,000, and fails to pay for the first instalment of SGD2,000, the moneylender may charge the late interest on SGD2,000 but not on the remaining SGD8,000 as it is not due yet.

With effect from 1 October 2015, all moneylenders are only permitted to impose the following charges and expenses:

• A fee not exceeding SGD60 for each month of late repayment;
• A fee not exceeding 10% of the principal of the loan when a loan is granted; and
• Legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.

The total charges imposed by a moneylender on any loan, consisting of interest, late interest, upfront administrative and late fee also cannot exceed an amount equivalent to the principal of the loan.

E.g. if A takes a loan of SGD10,000, then the interest, late interest, 10% administrative fee and monthly SGD60 late fees cannot exceed SGD10,000.

Do not borrow from unlicensed moneylenders. Verify that a moneylender is licensed by checking the list of licensed moneylenders at https://rom.mlaw.gov.sg/information-for-borrowers/list-of-licensed-moneylenders-in-singapore/.

Notwithstanding that the moneylenders are licensed, be mindful if they:

• Use abusive language, or behave in a threatening manner towards you.
• Ask for your SingPass user ID and/or password.
• Retain your NRIC card or any other personal ID documents (e.g. driver’s licence, passport, work permit, employment pass or ATM card).
• Ask you to sign on a blank or incomplete Note of Contract for the loan.
• Grant you a loan without giving you a copy of the Note of contract for the loan and/or without properly explaining to you all the terms and conditions.
• Grant you a loan without exercising due diligence (e.g. approving a loan over the phone, SMS or email before even receiving your loan application form and supporting documents, such as the income tax assessment and payslips).
• Withhold any part of your principal loan amount for any reason

Such practices are not acceptable. If you encounter them, you should report the moneylender to the Registry of Moneylenders, with information such as the moneylender’s business name, licence and contact numbers.

Under the advertising rules, which took effect on 1 November 2011, licensed moneylenders are permitted to advertise only through these three channels:

• business or consumer directories (in print or online media);
• websites belonging to the moneylender; and
• advertisements placed within or on the exterior of the moneylender’s business premises.

All other channels are prohibited.

In this regard, the advertising rules can help you differentiate between licensed and unlicensed moneylenders. If you receive flyers, SMSes, emails or other forms of advertisements which 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. Instead, you should report the advertisements to the Registry at 1800-2255-529 or https://eservices.mlaw.gov.sg/enquiry/

Errant licensed moneylenders will be investigated by the Registry and unlicensed moneylenders will be investigated by the Police.

You are advised to seek clarifications on specific terms of the loan contract before signing up with a licensed moneylender, and not to rely solely on the content of advertisements from the moneylender.

You should ensure that:

• You understand your responsibilities as a surety;
• You receive a copy of the Note of Contract at the time that the loan is granted to the borrower;
• The moneylender has explained the terms in the Note of Contact in a language that you understand; and
• The moneylender does not keep your NRIC card or any other personal ID documents (e.g. driver’s licence, passport)
• The moneylender does not acquire any information that contains passwords to your user accounts (e.g. Singpass account, Internet banking account, email account).

Make sure the moneylender delivers to you the correct principal amount of the loan. The moneylender is only permitted an upfront deduction of a loan approval fee of up to 10% of the principal amount.

• Pay the loan instalments on time to avoid incurring late payment fees and late interest.
• Make sure the moneylender issues you a receipt every time you make any repayment towards your loan, and check it for correctness (e.g. name, amount, date).
• Make sure you receive a statement of account for all your loan (s) at least once every January and July, and check it for correctness (e.g. name, amount, date); and
• You should retain all statement of accounts and receipts of payments, as documentation and evidence of payments.

You can contact the Registry at 1800-2255-529.

Rest assured that the Registry will not disclose your details to the moneylender without your consent. To facilitate the Registry to investigate your complaint, you may need to attend an interview with our officers and provide us with all relevant information and documents related to your loan transactions and circumstances of your dealings with the moneylender. The Registry views complaints against moneylenders seriously and will investigate them thoroughly. Errant moneylenders will be taken to task.

If a moneylender has engaged in an unfair practice towards you, you can pursue the matter through the Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act. The Court also has the power to set aside loan transactions that are exorbitant or substantially unfair.