Interest rates are often the biggest concern for anyone considering a loan. Many borrowers worry about being charged too much or not fully understanding how repayment amounts are calculated.
In Singapore, licensed moneylenders are strictly regulated to protect borrowers. Knowing how interest rates and fees work helps you make informed decisions — and avoid unnecessary stress or misinformation.
This guide explains licensed moneylender interest rates in simple terms, so you know exactly what to expect before borrowing.
1. Who Regulates Licensed Moneylender Interest Rates?
All licensed moneylenders in Singapore are regulated by the Registry of Moneylenders (ROM), under the Ministry of Law, through the Moneylenders Act.
This regulation ensures that:
Interest rates are capped
Fees are controlled
Borrowers are treated fairly and transparently
If a money lender does not follow these rules, they risk losing their license.
2. What Is the Maximum Interest Rate?
By law, licensed moneylenders in Singapore can charge:
Up to 4% interest per month
This applies regardless of income level or loan amount
Importantly, interest is calculated only on the outstanding loan amount, not on the original principal once repayments begin.
💡 This cap protects borrowers from excessive interest that could spiral out of control.
3. What Happens If You Pay Late?
Late payments can happen, but licensed moneylenders are still bound by strict limits:
Late interest: Up to 4% per month, charged only on the overdue amount
Late fee: Capped at $60 per month, regardless of loan size
There are no hidden penalties beyond what the law allows.
4. Are There Other Fees to Take Note Of?
Yes — but these are also regulated. Licensed moneylenders may charge:
Administrative fee: Capped at 10% of the principal loan amount
Legal costs: Only if court action is taken
They cannot charge upfront fees before loan disbursement or invent additional charges outside the contract.
5. How Much Can You Be Required to Repay in Total?
One important protection for borrowers is the total repayment cap.
👉 No matter what happens, a licensed moneylender cannot collect more than double the original loan amount (including interest and fees).
This means if you borrow $2,000, the maximum total repayable amount is $4,000 — even if repayment is delayed.
6. How to Calculate Your Loan Cost Before Borrowing
Before signing any loan agreement, always ask for:
A clear repayment schedule
Total interest payable
Monthly instalment breakdown
Licensed moneylenders must explain the contract clearly and in writing, and you are entitled to ask questions before committing.
7. Common Misunderstandings About Moneylender Interest Rates
❌ “Licensed moneylenders charge unlimited interest”
✔ False — interest is legally capped.
❌ “All moneylenders are loan sharks”
✔ False — licensed moneylenders operate legally under government regulation.
❌ “Borrowers have no protection”
✔ False — Singapore law provides strong borrower safeguards.
8. Borrowing Wisely Still Matters
Even with legal caps, responsible borrowing is essential. Always ensure:
The monthly instalment fits comfortably within your budget
You borrow only what you truly need
You communicate early if repayment issues arise
A loan should support your financial stability — not weaken it.
Conclusion
Licensed moneylender interest rates in Singapore are designed to balance access to credit with strong borrower protection. By understanding how interest, fees, and repayment caps work, you can borrow with confidence and clarity.
As a licensed moneylender in Singapore, Trillion Credit believes transparency builds trust. Our goal is to help clients make informed financial decisions while maintaining control over their finances.
Have questions about loan interest or repayments? Contact us today for a transparent explanation of our loan terms and see how responsible borrowing can work for you.
Walk into our branch or apply online anytime.
We’re here to provide fast, transparent, and legal cash loans.
📱 Call us at 65090111
📝 Or apply now at https://trillioncredit.com.sg/apply-for-loan/
