JR Credit Pte Ltd

Best Licensed Money Lender in Singapore

Regarding borrowing capital from licensed money lenders in Singapore you can be shocked by the strict rules that are set in this area. However, although these regulations are intended to shield borrowers from abusive lending practices, they appear to be too stringent or even ridiculous to some people. This article will examine nine policies that regulate the activities of moneylenders in Singapore that are really surprising.

Rule #1: Strict Licensing Requirements

Regulations by the Ministry of Law

To follow the law in Singapore, moneylenders should possess a permit issued by the Ministry of Law. The process is outlined and all entrepreneurial candidates are expected to meet these criteria, which include submission of detailed business plans, background checks and also financial stability.

Hefty Fees and Stringent Criteria

Applying for a moneylender’s license in Singapore is a task that is not inexpensive. A $3000 deposit is to be paid by each candidate, while an additional annual license fee of $20,000 is to be paid by all places of business. Secondly, they must meet certain requirements, like investing a minimum of $500,000 in their capital and conducting business from a well-established office.

Rule #2: Interest Rate Caps

The Borrowing Cost Cap

The lenders in Singapore are subject to a rule on the borrowing costs which should not exceed the cap. Moneylending cannot be done in a commercial way by people who do not have a license and they cannot charge any more than 4% per month in interest and fees for loans. Therefore, if you are given $1,000 in this case, the most amount that will be given to you in interest and fees for the one-month loan cannot exceed $40.

The Late Interest Rate Cap

Lenders can charge if you fail to repay the loan on time. The rate of late interest does not exceed 4% per month when the interest and principal amount left unpaid are considered.

Rule #3: Advertising Restrictions

No Misleading or False Advertising

There should be no misleading or dishonest advertising.

The lenders in Singapore are not allowed to advertise the loan using means that are false or misleading; hence, the advertisement is not distorted. This implies that they are not allowed to provide their customers with disproportionate claims or mislead them by giving fake interest rates or fees.

Limitations on Advertising Channels

Moneylenders encounter the issue of limited advertising channels available to them. Take, for example, their inability to send a text message or an unsolicited phone call to advertise, which is perceived as an intrusion into people’s privacy.

Rule #4: Debt Collection Protocols

Prohibited Harassment Tactics

The moneylenders in Singapore are legally limited in the way they can pursue debts. The guidelines are quite clear. These approaches are outlawed, as they can include the use of abusive language, issuing threats, and or any kind of physical intimidation.

Strict Guidelines for Debt Collectors

Institutions charging loanable funds should also make sure that their debt collectors comply with specific rules. This is achieved by banning debt collectors from contacting their debtors at any unreasonable time, not disclosing their debtors’ sensitive information to third parties, and not engaging in any sort of excessive pressure or coercion.

Rule #5: Mandatory Documentation

Loan Agreement Requirements

There is no money loan agreement that is done without the process of documenting the agreement in writing in Singapore. The contract needs to be drawn in a way that plainly states the principal amount, the interest rate, the fees, and the repayment schedule as well as other essential details.

Disclosure of Key Facts

Besides disclosing necessary information like interest rates to the borrowers before they sign a loan agreement, money lenders are required to do so. Among these are the overall interest rate, the annual percentage rate (APR), and the credit rating, which is adversely affected by defaulting on the loan.

Rule #6: Cooling-off Period

Right to Cancel the Loan

Singapore consumers who have borrowed money from moneylenders have cancellation rights within the given period of time. In this stage, the borrower pays off the loan during the period of 5 to 7 calendar days, with the loan amount being the main determinant.

Refund of Fees and Interest

The lender will have to refund the entire sum of the fees and interest charged by the borrower, except for an insignificant processing fee, if the borrower decides to rescind the borrowing during the cooling-off period.

Rule #7: Borrowing Limits

Caps on Loan Amounts

In order to prevent borrowers from taking up longer credit lines, moneylenders in Singapore are bound to set limits on the amount of loans they may provide. In this regard, the maximum loan amount for low-income borrowers with annual earnings less than $20,000 is $3,000.

Restrictions Based on Income

Besides, providers of money loans have to consider a borrower’s earnings while calculating loan amounts. The maximum loan from any moneylender per annum cannot exceed 24 times the borrower’s annual income for those earning less than $20,000 or 32 times for those earning $20,000 per annum.

Rule #8: Repayment Schedules

Minimum Repayment Periods

The minimum repayment period that is provided by moneylenders in Singapore is set in a manner that reflects the sensitivity to the loan amount. For loans that amount to $3,000, you can be able to repay them for four months, and $3,000 to $10,000 takes six months of repayment.

Prohibited Rollover Practices

While that, the moneylenders are also banned from the possibility of rollover arrangements where the loan is continued by rolling over into a new loan with additional fees and charges. This act is regarded as one of the most unethical practices that are not allowed.

Rule #9: Responsible Lending Obligations

Assessing Borrowers’ Creditworthiness

Before agreeing on a loan, moneylenders in Singapore are responsible for doing the complete test of a borrower’s creditworthiness. Among the factors to be verified are the borrower’s income, work status and the amount of existing debt to be repaid.

Ensuring Affordability of Loans

It is important that lenders make sure that the loans they provide are not more than what borrowers can pay. That entails an assessment of the borrower’s income, expenses, and total financial position to ensure that the repayments do not make the life of the borrower more difficult.


However, some of these regulations may look too severe or even foolish to some borrowers. The rules are designed to protect citizens from unreliable and unethical lending practices and maintain a clean, fair and responsible credit industry in Singapore. The regulations that govern domestic finance and how firms like JR Credit run their businesses ensure a fair and ethical financial environment for customers who rely on short-term loans.