There is a significant distinction between licensed and unlicensed money lenders. When most people think of unlicensed money lending, they think of loan sharks. 

It is important to note that licensed money lenders do not operate similarly to loan sharks. Here are a few pointers to help you distinguish between licensed and unlicensed money lenders.

Documentation following the law.

Licensed moneylenders are registered in the Moneylenders Registry Singapore and follow the Moneylenders Act. They’re doing business illegally if you can’t find their license number on the Registry.

Method of Debt Collection.

When it comes to not paying on time, most illegal moneylenders will frequently harass their clients. 

Some people would wake up to find their house walls splattered with paint. Others would face harassment via social media and mobile phones.

The contract appears to be too good to be true.

Read and comprehend all of the documents that will be presented to you. Do not sign anything until you know everything is clear to you.

Think twice before signing a contract, and trust your instincts. If the offer you receive seems too good to be true, you are most likely dealing with an illegal lender.

Remember that unlicensed lenders will only make your debt worse, and it is critical that you know whether they are following the law or not. They will always find a way to persuade you with their sweet words and irresistible offers.

They will do anything to entice you into applying for a loan, even if you are unaware that you will be in big trouble in the future.

Loan terms and conditions

The Registry of Moneylenders requires Singapore lenders to use simple terms and clearly explain their loan contracts. They also require all licensed Singapore lenders to answer any borrower’s questions.

Not included, but not limited to, answering any questions you may have about your loan, such as the interest rates, as well as clarifying the interest rates of the penalties, the settlement timeframe, and the various payment options.

Signature required on contract

Licensed moneylenders are required by law to draft a contract for their borrowers to sign. 

A legal professional must write this contract and include information about the loan, such as interest rates, late repayment penalties, loan maturity, and other details.

Do not accept a loan offer from someone or a company that talks to you about taking a loan with no contract or asks you to sign a bare or unfinished contract. 

Because this is not how licensed moneylenders operate, it is possible that you are dealing with an unlicensed moneylender.

On the other hand, an unlicensed money lender in Singapore may simply give you terms and conditions that are riddled with difficult-to-understand money lender jargon.

They will not even bother to explain their terms, lowest-interest personal loans, and penalty interest rates. They may also be unwilling to respond to your questions.

Office space.

All licensed moneylenders are required by law to have a physical office. The application can be made online at their website, but the contract must be signed at the registered office of the lender in Singapore.

As a result, if you come across an individual or a company that claims to be a money lender with low-interest rates but only operates online and cannot provide an address, they may be unlicensed.


Some money-licensed money lenders and debt consolidation companies are trustworthy and operate legally to provide borrowers with the best loans. 

If you followed the advice above and discovered you were speaking with an unlicensed money lender, you should walk away and not do business with them.