Published 16 July 2026 · Last updated 24 July 2026 · Reviewed by a licensed loan officer, Advance Cash Credit · General information, not a loan offer
When you borrow from a licensed moneylender in Singapore, the cost of the loan is not left to the lender’s discretion. Since 1 October 2015, the Ministry of Law has set strict limits on the interest and fees a licensed moneylender may charge. These caps are the same at every licensed moneylender, so it helps to understand exactly what you can — and cannot — be charged before you sign anything.
The caps at a glance
A licensed moneylender in Singapore may only charge the following, and nothing more:
| Charge | Maximum allowed | How it is applied |
|---|---|---|
| Interest | 4% per month | Calculated on the reducing balance (the amount you still owe). Applies whether the loan is secured or unsecured, regardless of income. |
| Late interest | 4% per month | Charged only on the amount that is overdue — not on amounts that are not yet due to be repaid. |
| Approval (administrative) fee | 10% of the loan principal | A one-time fee, on grant of the loan. |
| Late fee | $60 per month | Up to $60 for each month a repayment is late. |
On top of these caps, there is one overarching rule: the total of all interest, late interest, approval fee and late fee on a loan cannot exceed the loan principal. So if you borrow $3,000, the total of everything you are charged can never add up to more than $3,000.
What “reducing balance” means
The 4% monthly interest is charged on the amount you still owe, not on the amount you first borrowed. As you make repayments, the balance falls — and because interest is worked out on that shrinking balance, the interest portion of each instalment falls too. In plain terms, the more you have paid down, the less interest you are charged. Interest is never calculated on money you have already repaid.
A simple worked example
Illustration only, not a quote. Figures are rounded and used purely to show how the caps work; your actual instalment depends on your loan terms and the moneylender’s assessment.
Suppose someone takes an unsecured loan with a principal of $3,000:
- A one-time approval fee of up to 10% of $3,000 = $300. This may be deducted upfront, so the borrower would receive $2,700 in hand while still owing the full $3,000.
- First month’s interest at 4% on the opening balance of $3,000 = $120.
- After repayments bring the balance down to, say, $2,000, the next month’s interest at 4% is charged only on that $2,000 = $80 — lower, because the balance has reduced.
- If a monthly repayment is missed, a late fee of up to $60 may apply for that month, plus late interest of up to 4% on the overdue amount only.
Whatever the schedule, the overall cap still applies: across the whole loan, the interest, late interest, approval fee and late fees added together can never exceed the $3,000 principal.
Charges that are not allowed
If a lender asks for anything outside the four items above — for example a “processing” charge on top of the 10% approval fee, or interest calculated on the original amount even after you have paid part of it down — that is a warning sign. A licensed moneylender must also give you a copy of the loan contract and explain the repayment schedule, interest rate and fees in a language you understand before you sign.
How Advance Cash Credit can help
Advance Cash Credit Pte. Ltd. is a licensed moneylender registered with the Registry of Moneylenders, Ministry of Law (Licence No. 79/2026). We charge within these legal caps and set out every figure — instalment, interest, approval fee and any late charges — in person before you sign. If you would like to understand your options, you can submit an application, send an enquiry, or call us at 6737 5737 and a loan officer will follow up within one hour on working days.
Sources: Ministry of Law, Registry of Moneylenders — What are the fees that moneylenders can charge? and Guide to borrowing from licensed moneylenders. This article is general information based on the rules in force at the time of writing and does not constitute a loan offer or financial advice. All loans are subject to assessment under the Moneylenders Act, and Advance Cash completes every loan in person at our office. Please borrow responsibly.