Borrowing has become more common in Singapore’s digital economy, especially as more consumers turn to licensed moneylenders for short-term financing. In Singapore’s tightly regulated lending ecosystem, the number of licensed moneylenders may seem relatively small, but their impact is growing.
As of July 2025, there are 153 licensed moneylenders operating in Singapore. And according to the Ministry of Law’s recent assessment, these lenders disbursed about S$1.9 billion in loans, with the average ticket size around S$5,300 per borrower.
Meanwhile, demand is rising: unsecured personal loans from licensed moneylenders numbered roughly 370,500 in 2023, up from 308,600 in 2021. This surge reflects how more Singaporeans are turning to non-bank credit to cover everyday needs, even in an increasingly digital and regulated environment.
Why does this matter now?
While regulation (such as interest-rate and fee caps) is strict in Singapore, rapid digitalisation and intense competition mean not all lenders offer the same level of transparency or borrower support. Even a “small” average loan of S$5,300 can impose a heavy burden if hidden fees or aggressive repayment terms are involved.
Scams remain a real threat. From January to May 2025, the Singapore Police reported 375 loan-scam cases, with victims losing at least S$2.4 million. The key defense for any borrower is not just to compare rates, but to ask the right questions to understand what they are really signing up for, how they will repay, and what their risks are.
With borrowing demand rising, regulatory expectations tightening, and scams becoming harder to detect, the responsibility placed on the borrower has never been higher. Even though licensed moneylenders operate within a strict framework, the experience can vary significantly from one lender to another.
This is where the right questions matter. They help you move beyond marketing claims and uncover whether a lender is transparent, compliant, and aligned with your financial situation. These questions also give you a clearer picture of the long-term impact of your loan, not just the upfront rate.
Below is a structured set of questions every borrower in Singapore should ask today, based on current regulations and real borrower pain points.
This is the foundation of responsible borrowing. You should verify a moneylender’s license via Singapore’s Registry of Moneylenders, which publishes up-to-date names, addresses, and license numbers for all legitimate moneylenders.
Licensing means more than just a stamp of approval. It ensures that the lender is subject to strict regulatory controls for instance, limits on interest rates, fees, and conduct. A lender who hesitates to provide or explain their license number may be signaling risk.
Ask for their license number, then cross-check it personally on the Registry. Confirm also that the business address matches what’s in the Registry.
Read more: How to Spot Loan Scams: A Guide for Borrowers in Singapore
Many borrowers focus only on the quoted monthly interest rate, but the full cost includes more components: administrative fees, disbursement fees, late charges, and whether interest is calculated on a flat or reducing basis.
In Singapore, the real cost of a loan is more than just the monthly interest rate. According to MinLaw Singapore, Licensed moneylenders can charge up to 4% interest per month, and if you pay late, they can also charge up to 4% late interest on the overdue amount. They may add an administrative fee of up to 10% of the loan amount when the loan is given, and a late repayment fee of up to S$60 per month.
Altogether, all fees and charges cannot be more than what you originally borrowed. A thoughtful lender should be ready to walk you through a breakdown of “total repayment cost” under different scenarios, including late payment or early repayment.
Ask for a cost simulation in writing. Get the lender to show what happens if payments are delayed, or if you repay early.
Missing a payment does not necessarily indicate irresponsibility. But what matters is how the lender treats it. Some licensed moneylenders strictly impose the legal caps without flexibility; others have policies for restructuring or adjusting due dates.
While the law caps the penalties (interest and late fees), how a lender operationalises payment difficulty can vary dramatically. Reputable lenders may proactively offer payment restructuring, but many do not.
When doing your due diligence, it’s a good idea to ask some straightforward questions. For example, you could ask, “What late fees and arrears interest do you charge?” to get clear on any extra costs. It’s also helpful to know if they offer any repayment support options, so asking, “Do you have programs for repayment support, like restructuring?” can give you insight into what’s available.
Lastly, it’s important to understand your options if you face financial hardship, so you might ask, “If I run into financial trouble, is it possible to adjust due dates?” These questions can help you better understand your terms and the support you can expect.
Early repayment should ideally benefit the borrower. But in practice, some lenders either do not provide rebates on unearned interest, or apply flat interest, or even impose settlement fees.
A transparent, well-run lender will have a clear written policy for early settlement, ideally with an example illustrating how any rebates are calculated.
When reviewing a loan, it’s important to clarify the early settlement terms with the lender. Ask them to provide a detailed example based on either a hypothetical loan or the actual amount you’re considering. This way, you can see exactly how much you would need to pay if you decide to repay the loan early and avoid any surprises.
Read more: Common Misconceptions About Licensed Moneylenders
Repayment structure is often overlooked, but it’s a critical factor in managing cash flow. Monthly fixed installments tied to your salary cycle (or income receipts) help maintain discipline and reduce stress.
If you’re a freelancer, you may need more flexibility. A lender who forces a rigid structure may not be ideal.
When doing your due diligence, it helps to ask a few clear questions about how repayments work. Start by asking whether the lender can customise the repayment due date, as this can make the loan easier to manage with your income schedule.
You should also check whether the payments are fixed or if they change over time, since this affects how predictable your monthly budget will be. Finally, ask if the lender supports non-standard repayment frequencies, such as weekly or bi-weekly payments, in case those options suit your cash flow better.
One of the most misunderstood aspects: licensed moneylenders do report to the Moneylenders Credit Bureau (MLCB), not to the same credit bureaus used by banks. This means your borrowing and repayment history can influence your future ability to borrow from other licensed moneylenders, though banks may not see this data directly. Good lenders are clear with borrowers about what gets reported, how, and what impact that could have on future borrowing.
Before committing to a loan, make sure to ask where your repayments will be reported, since this can influence your credit record. It’s also important to understand how both timely and late repayments might affect your future borrowing options. Being aware of these factors helps you make smarter financial decisions.
Digital onboarding has improved speed, but licensed moneylenders are still subject to verification rules. For instance, face-to-face verification at a licensed premises is mandatory, regardless if you are first-time loaner or not.
Moreover, data protection should be a priority: how they store your identity documents, how securely they process your application, and whether they share data with third parties.
Before moving forward, it’s wise to find out what the lender expects and how they manage your information. Ask which documents you must submit for the application so there are no surprises later.
Just so you know, an in-person meeting is required before any loan can be disbursed. And finally, make sure to ask how they handle, store, and safeguard your personal data to ensure your information is properly protected.
Read more: How to Improve Your Chances of Getting Your Personal Loan Application Approved
As lending goes digital, scammers have become more aggressive. In early 2025, the Singapore Police reported 375 loan-scam cases, totalling S$2.4 million in losses. Many scam offers mimic licensed lenders. Sometimes even referencing real ones and using social media or WhatsApp to lure victims.
Key risks to watch for:
Due diligence: Always verify a lender’s license. Use the Registry of Moneylenders website. Refuse any request for advance payments outside the legal framework.
In 2025, these questions matter more than ever. As licensed moneylenders enhance their digital systems, loans are faster and easier to access, but the risk of unclear or misleading terms has also grown. Many borrowers assume that regulated lending automatically means safe lending, and in doing so, they may miss important cost details.
Scams are also becoming more sophisticated, which makes knowledge one of the strongest protections a borrower has. True transparency from a lender, whether in pricing, policies, or processes, is a key marker of a responsible and trustworthy operator. With Singapore’s lending environment becoming increasingly digital, competitive, and complex, asking informed questions is not just a formality but it’s part of taking control of your financial choices.
Borrowers today cannot rely on assumptions or marketing claims. It is no longer enough to take a loan, you must understand the full implications, the lender’s conduct, and the long-term impact on your financial stability.
Choosing the right lender can make a big difference. It can mean getting short-term support without long-term stress. At Friday Finance, you get licensed and ethical lending, clear loan terms, and fair rates. Our short-term financing options usually come with interest rates ranging from 2% to 3% per month, depending on the loan type and your profile.
Click here to apply online today and receive your instant offer in minutes! Access the funds you need from Friday Finance without hidden fees or unexpected problems.
