What Licensed Moneylenders in Singapore Cannot Do When Collecting Debts

Key Takeaways

• Licensed moneylenders in Singapore must follow the law – They are not allowed to harass, intimidate, or publicly shame borrowers, unlike unlicensed lenders such as ah longs or loan sharks, who always do.
• Debt collection practices are regulated – Under the Moneylenders Act in Singapore and the Debt Collection Act 2022, lenders must communicate with borrowers in a professional and lawful manner at all times.
• You’re protected as a borrower – You have the right to transparent fees, a copy of your loan contract, protection from harassment, and legal avenues to report misconduct.
• Illegal lenders come with real dangers – Borrowing from unlicensed moneylenders exposes you to threats, unfair charges, and harassment, with no legal protection when things go wrong.
• 1-Cash puts responsible lending into practice – As a licensed moneylender, 1-Cash complies with all regulations, maintains transparent communication, and supports borrowers every step of the way.

licensed moneylenderMoneylenders Act 2008Registry of MoneylendersMinistry of LawLicensed moneylender harassment

• How debt recovery works under Singapore law
• What licensed moneylenders cannot do
• The debt collection activities permitted under the law
• Borrowers’ rights Singapore residents should be aware of

unable to pay your moneylender

What Is a Licensed Moneylender in Singapore?

interest rates

💡 Pro tip: verify a lender’s legitimacylist of licensed moneylenders

The Legal Framework Governing Debt Collection in Singapore

• The Moneylenders Act 2008
• The Debt Collection Act 2022

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What Licensed Moneylenders Cannot Do When Collecting Debts

cannot

#1 No Harassment, Threats or Intimidation

#2 No Public Shaming

not allowed

#3 No Deception or Withholding of Documents

#4 Cannot Charge Excessive Fees or Impose Hidden Costs

• Interest rate: Cannot exceed 4% per month
• Late interest: Maximum 4% per month, applied only to the overdue amount
• Late fee: Not more than S$60 for every month of missed repayment
• Administrative fee: Up to 10% of the principal, deducted upfront upon loan approval
• Total charges cap: The sum of the interest, late interest, late fees, and admin fees cannot exceed 100% of the principal

#5 No Unreasonable Contact

• Bombard you with excessive calls
• Unnecessarily approach your employer
• Create disturbances at your workplace
• Harass your friends or family members
• Force entry into your home or workplace

What Licensed Moneylenders Can Legally Do During Debt Collection

• Contact borrowers during reasonable hours: Typically between 8 am and 9 pm, without making excessive calls that could constitute harassment.
• Send formal Letters of Demand (LOD): These letters clearly state the outstanding amount, any applicable fees, and a repayment deadline.
• Appoint professional debt collectors: Any third-party debt collection agency must hold a licence issued by the Singapore Police Force under the Debt Collection Act 2022.
• Take legal action: Lenders can pursue debts through the Small Claims Tribunal (for amounts up to S$30,000) or the State Courts. After winning a judgment, they may apply for a Writ of Seizure and Sale to recover assets.

• The total outstanding amount owed.
• A clear breakdown of interest, fees, and charges.
• The circumstances of the default, including your repayment history.
  

What Should You Do if Your Borrower’s Rights in Singapore Are Violated?

• File a complaint with the Registry of Moneylenders.
• Lodge a police report for criminal actions like threats, harassment, or property damage.
• Seek legal advice or protection under the Protection from Harassment Act (POHA).

licensed moneylender harassment

What to Do if You’re Harassed by an Unlicensed Lender

unlicensed lendersthe Moneylenders Act in Singapore only applies to licensed lenders

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