Bugis Credit Pte Ltd is a licensed moneylender (License No. 25/2024) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.

Licensed Money Lenders in Singapore: A Comprehensive Guide (2024)

shaking hand after signing contract

A licensed money lender is a business that is given official permission to lend money to people. This is vital in helping individuals meet their financial needs when they might not qualify for traditional bank loans.

Is this practice legal? Absolutely! Licensed money lenders operate within the boundaries of the law, providing a legitimate and often crucial service. Interest rates, however, can vary, but they range from 1-4% for personal loans.

What is a Licensed Money Lender In Singapore?

A licensed money lender in Singapore is a person or company that is legally authorized to lend money to individuals and businesses. Unlike unlicensed, ah longs, or illegal money lenders, licensed money lenders must adhere to regulations and guidelines set by the government, specifically by the Ministry of Law in Singapore.

Here are some essential aspects of licensed money lenders in Singapore:

  • Regulation: They are regulated under the Money Lenders Act and must comply with interest rates, fees, and business conduct rules.
  • Interest Rates: Their interest rates are capped, and they must follow the guidelines set by the Registry of Money Lenders.
  • Transparency: Licensed money lenders must explain the loan terms in a language understood by the borrower, ensuring transparency and understanding.
  • Accessibility: They often provide loans to individuals who may not qualify for traditional bank loans, including those with poor credit history.
  • Loan Types: Licensed money lenders offer various types of loans, including personal loans, payday loans, and business loans, usually with shorter repayment periods.

Licensed Money Lender Pros and Cons 

Borrowing from licensed money lenders has its own advantages and disadvantages. Here’s a breakdown of the pros and cons:


  • Faster Approval Time: Licensed money lenders usually offer quicker approval times, often within hours, compared to traditional banks. This can be particularly helpful in emergencies.
  • Flexible Loan Terms: Some licensed money lenders may offer more flexible tenure and loan amounts, making it easier to tailor a loan to specific needs.
  • Access for Those with Poor Credit: Licensed money lenders usually allow borrowers to take loans with low or insufficient credit history as they base their eligibility on their minimum income requirements.
  • Clear Regulation: Licensed money lenders are regulated by government authorities, providing a legal framework that safeguards consumers.
  • Personalized Service: Smaller moneylending operations may offer more personalized service and a human touch.


  • Higher Interest Rates: Generally, licensed money lenders may charge higher interest rates compared to traditional banks. The rates are regulated, but they might still be more costly.
  • Limited Loan Amounts: Compared to banks, loan amounts being offered by lenders are smaller. Plus, depending on the borrower’s income and the lender’s policies, the loan amounts might be limited, particularly for unsecured loans.
  • Shorter Repayment Periods: Legal lenders may offer shorter repayment periods from 6-12 months, which could lead to higher monthly payments.
  • Potential Impact on Credit Score: If the borrower fails to comply with the terms, it may negatively affect the credit score, just as it would with a traditional bank loan.Fees and Charges: Same with banks, additional fees and charges might apply, and these can add up. It’s important to understand all the costs involved in the loan.

Banks Vs. Licensed Money Lenders

Now that the difference between licensed and illegal lenders is clear, understanding the differences between borrowing from legal lenders and banks can help guide your financial decisions. Here’s a comparison:

Criteria Licensed Money Lenders Banks
Minimum Age Requirements 21 years and above 21 years and above
Interest Rates 1-4% per month 3.5-11% per annum
Repayment Period Up to 12 months (smaller loans) Up to five years (bigger loans)
Application Approval Time Less than 30 minutes 3-5 working days

In a nusthell, if you need a smaller loan with a quick and less stringent approval process, a licensed money lender may be the way to go. 

A bank might be the better choice if you’re looking for a larger loan, have a good credit score, and don’t mind a more extended approval process.

Types of Loans You Can Borrow From Licensed Money Lenders

Here are the different types of loans that individuals can borrow from licensed money lenders in Singapore. 

Type of Loan Minimum Income Eligibility Loan Amount  Interest Rate Repayment Period
Personal Loan $2,000 At least 21 years old Up to 6x 1-4% Up to 12 months, subject to agreement
Foreigner Loan $3,000 At least 21 years old Up to 6x 1-4% Up to 12 months, subject to agreement
Payday Loan $2,000 At least 21 years old Up to 1x 1-4% Within 1 month or on the next payday
Monthly Loan $2,000 At least 21 years old Up to 6x 1-4% Up to 12 months, subject to agreement
Business Loan No minimum salary At least 21, min turnover $60,000, business operating for at least 1 year Up to $200,000 5-15% Up to 24 months, subject to agreement
Bridging Loan $2,000 At least 21, must exercise the Option to Purchase (OTP) Up to 6x 1-4% Up to 1 month or until property’s completion date

Applying for the Best licensed Money Lenders in Singapore

Eligibility Requirements

singaporeans and PR

For Singaporeans/PR:

  • Minimum Age: 21 years or older
  • Minimum Income: $2,000
  • Loan Amount:
    • Less than $10,000: $500 loan
    • $10,000 to $19,999: $3,000 loan
    • $20,000 or more: Up to 6 times your monthly salary
  • Documents Required:
    • Identity card
    • Proof of residence (utility bill, a letter addressed to you, and or tenancy agreement)
    • Proof of employment (certificate of employment or recent 3 months payslip)
    • SingPass ( to log into CPF, HDB, IRAS website)

For Foreigners:

  • Minimum Age: 21 years or older
  • Minimum Income: $3,000
  • Loan Amount:
    • Less than $10,000: $500 loan
    • $10,000 to $19,999: $3,000 loan
    • $20,000 or more: Up to 6 times your monthly salary
  • Documents Required:
    • Identity card
    • Proof of residence (utility bill, a letter addressed to you, and or tenancy agreement)
    • Proof of employment (certificate of employment or recent 3 months payslip)
    • SingPass ( to log into CPF, HDB, IRAS website)

Application Process

Apply In-Person or Online:

Steps 1: If you apply online, you’ll receive a call to schedule an appointment.

Steps 2: Visit the lender’s office with all required documents.

Steps 3: Loan officers will explain the process and evaluate your application.

Steps 4: Sign the Loan Contract:

  • Loan terms will be explained thoroughly.
  • Make sure to understand all details before signing.

Steps 5: Receive the Loan. You will get the funds instantly in cash 

Questions You May Still Be Looking For Answers (FAQ)

1. What Should I Consider Before Borrowing?

  • Consider other options before reaching out to a licensed money lender. For instance, Government agencies also offer financial assistance schemes. You can contact these agencies to learn more about these options.
  • You are bound by law to fulfill your debt obligations as stated in the loan contract. That said, carefully read the terms and conditions of the loan agreement.
  • Will you be able to fulfill the contractual terms? When taking out a loan, consider your income and financial capacity to repay the debt. That said, borrow only the amount you need and what you can repay. Any late payment will lead to more interest and payment fees, resulting in more financial strain.
  • Licensed moneylenders must clearly explain the terms of a loan including the repayment schedule, the interest rate charged, and all the applicable fees. The law requires them to make sure that borrowers understand the loan terms before signing the contract. Lastly, licensed moneylenders must also provide you with a copy of the loan contract.
  • Read carefully the terms and conditions of the loan contract. For example, the contract may allow the licensed money lender to lodge a caveat on the sale proceeds of your real estate property. This means you can’t sell your property without first repaying your debt in full. 
  • Don’t immediately sign a loan contract with the first money lender you talk to. Get quotes from different legal money lender and compare which one has the most favorable terms. Lastly, ask questions and negotiate until you are satisfied with the terms and conditions.

2. How Much Can I Borrow?

Please take a look at the table below for the total maximum amount you can borrow at any time from all legal money lenders in Singapore:

Borrowers’ annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than $10,000 $3,000 $500
At least $10,000and less than $20,000 $3,000
At least $20,000 6 times monthly income 6 times monthly income

Note: For secured loans, you can loan any amount.

3. What Are the Interest Rates Money Lenders Can Charge?

The maximum interest rate that licensed money lenders can charge is 4% per month effective on October 1, 2015. It doesn’t matter whether you have applied for a secured or unsecured loan – the rate will remain the same.

4. What Are the Fees That Money Lenders Can Charge?

The law allows all licensed moneylenders to impose the following fees and charges:

  • A late repayment fee not exceeding $60 per month.
  • A one-time, upfront administrative fee not exceeding 10% of the principal loan amount when a loan is granted.
  • Legal costs incurred by the licensed moneylenders for the recovery of the loan.

The total charges imposed by the licensed moneylenders must not exceed an amount equivalent to the principal of the loan.

For example, if you take a loan of $20,000, then the interest, late interest, 10% administrative fee, and monthly $60 late fees must not exceed $20,000.

5. How can I Verify if a Money Lender is Licensed?

Borrowing from unlicensed moneylenders can lead to serious legal and financial troubles. Always ensure that you are dealing with a legitimate, legal money lender by checking the official list of licensed moneylenders.

This list of licensed moneylenders is maintained by the Ministry of Law, and it’s updated regularly. 

6. How to Spot Unlicensed Money Lenders? How to Know if a Money Lender is Illegal? 

Spotting illegal or unlawful money lenders is crucial to safeguarding financial security and avoiding potentially harmful situations. Here are some signs and tips to help you recognize illegal lenders:

  • No License: Check the Ministry of Law’s website to verify if a money lender is licensed. If the money lender isn’t on the list, they’re likely an unlicensed money lender.
  • High-Pressure Tactics: Illegal money lenders may use aggressive and high-pressure sales tactics to rush you into a decision.
  • Unusual Interest Rates: Illegal money lenders may charge exorbitant interest rates that far exceed the legal limits set by the government.
  • No Contract or Unclear Terms: A licensed money lender will always provide a clear and understandable contract that outlines the terms of the loan. If this is absent or vague, it could be a sign of an unlicensed money lender.
  • Request for Personal Information: If they ask for personal passwords or PINs to bank accounts or other personal information that isn’t typically required, be cautious.
  • Unprofessional Behavior and Advertising: Watch out for informal and unprofessional advertising through platforms like WhatsApp or flyers. Legal money lenders are restricted in how they can advertise.
  • Upfront Fees: If the money lender demands fees before processing the loan, it’s a red flag. Licensed moneylenders will typically include any fees in the contract and not request them upfront.
  • No Physical Office: A licensed money lender should have a registered physical office. Be wary of money lenders who only operate online or provide vague or false address information.
  • Unsolicited Offers: Be cautious if you receive an unsolicited offer, as licensed moneylenders are not allowed to send unsolicited marketing or sales messages.
  • Ignoring Borrower’s Ability to Repay: Licensed moneylenders are expected to assess a borrower’s ability to repay. If a money lender is ignoring this and willing to lend money without any consideration of your income or financial situation, it’s a warning sign.Harassment: If you face threats, abusive language, or harassment, it’s a clear indication that the lender is not operating within the bounds of the law.

Remember, dealing with unlicensed money lenders can lead to serious legal and financial problems. Always verify the credentials of a money lender, understand the terms of the loan, and trust your instincts. If something feels off, it probably is, and it’s best to consult with a professional or choose another lender.

illegal money lender hide identity with mask

7. How to Report Unlicensed Money lenders?

To report both errant licensed moneylenders and unlicensed moneylenders in Singapore. Here’s how you can do so:

Reporting Errant Licensed Moneylenders: If you encounter a licensed money lender who is not adhering to the legal practices and guidelines, you can report them to the Registry of Moneylenders, a department under the Ministry of Law in Singapore. You may do this:

Reporting Unlicensed Moneylenders (Loan Sharks): If you come across or accidentally borrowed from an illegal money lender or suspect illegal moneylending activities, report them directly to the Singapore Police Force. You can do this:

8. What Happens if I Default on my Loan?

If you find yourself unable to make a repayment, it’s essential to communicate with the moneylender as soon as possible. Many moneylenders may be willing to negotiate a revised payment plan or find a solution that helps you meet your obligations without resorting to legal action.


Understanding the role of licensed moneylenders and the types of loans they offer can help individuals make informed financial decisions and choose the best option that suits their needs and financial situation. As with any financial decision, it’s crucial to read and comprehend the loan terms and assess one’s ability to fulfill the repayment obligations before proceeding with a loan application.

Key Takeaways:

  • Licensed moneylenders operate legally within the boundaries set by the government. They provide a legitimate and regulated service, ensuring transparency and understanding of the loan terms.
  • Compared to traditional banks, licensed moneylenders often offer quicker approval times and provide loans to individuals with poor credit history, offering access to funds for those who may not qualify elsewhere.
  • Look for reviews and testimonials from previous borrowers. Genuine feedback can provide insights into the moneylender’s reputation and service quality.

If you need financial assistance and seek a trusted licensed moneylender in Singapore, look no further than Bugis Credit Pte Ltd. With a stellar reputation and hundreds of 5-star ratings on Google reviews, Bugis Credit has served the community since 2007, providing reliable and transparent loan options.

Visit our website or call us today to explore the best loan options tailored to your needs.

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