Guide · Money and debt · 3 min read
Borrowing from a moneylender
What a licensed moneylender must give you, limits on interest, and what the law says about unlicensed lenders.
In plain English · by laws.sg · not legal advice· Law as at 30 Sep 2026
On this page · 6 parts
The short answer
A person must not carry on the business of moneylending in Singapore unless they are licensed, or are an excluded or exempt moneylender.
A loan contract made by an unlicensed moneylender, and any guarantee or security given for such a loan, is unenforceable, and money the unlicensed moneylender paid under it cannot be recovered in any court, subject to a narrow exception the Act sets out.
Before you borrow
Before granting a loan, a licensed moneylender must inform you in writing of the terms and conditions of the loan that are prescribed, and have you or your agent sign that information with a written acknowledgment that you were informed.
If a loan is granted without this, the moneylender is not entitled to enforce payment of the interest, late interest and permitted fees under the contract, or any guarantee or security to recover them. Any of those amounts already paid can be recovered as a debt due to the borrower or surety, and if not recovered, is set off against what is owed on the loan.
The note of contract
Except for revolving credit, a licensed moneylender's loan contract, and any guarantee or security for it, is not enforceable unless:
- A note of the contract in the prescribed form is signed by the parties or their agents
- If a party does not understand English, the moneylender or its agent explains the terms of the note in a language that party understands before anyone signs it
- A copy of the note, signed by the moneylender or its agent, is delivered to the borrower and any surety, or their agents, before or when the loan is paid out
Interest
A licensed moneylender must not enter into a loan contract under which the interest or late interest charged exceeds the maximum rate the Minister prescribes.
A contract made in breach of that is unenforceable against the borrower or any surety, the moneylender cannot enforce any guarantee or security for it, and money it paid under the contract cannot be recovered in any court.
When a licensed moneylender sues to recover a loan, and the court is satisfied that the interest or late interest charged is excessive and the transaction is unconscionable or substantially unfair, the court is to reopen the transaction and take an account between the moneylender and the person sued.
A borrower, a surety or another person liable to repay the loan can also bring proceedings for this relief, even before repayment is due.
Statements and receipts
While your loan contract subsists, a licensed moneylender must send you, free of charge, a statement of account in English at least once every half year ending on 30 June or 31 December, not later than 21 days after that date.
When a licensed moneylender receives a cash payment for a loan, it must immediately issue the payer a receipt in English that sets out its business name, address and telephone number, and the amount and date of the payment.
Unlicensed moneylending
Anyone, other than an excluded moneylender, who lends a sum of money in return for a larger sum being repaid is presumed to be a moneylender until the contrary is proved.
Subject to the rest of section 19, a person who contravenes section 5(1), or assists in contravening it, is guilty of an offence. Collecting or demanding payment of a loan for someone you know, or have reasonable grounds to believe, is an unlicensed moneylender counts as assisting.
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