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The online loan boom in Singapore

ByDave Stopher

May 19, 2021

As the Covid-19 economic downturn continues across the world, even Asia’s financial capital is not immune. However, savvy Singapore residents aren’t letting these temporary setbacks hold them back. With the government’s recent relaxation of money lending laws, an online loan is fast becoming an attractive prospect in uncertain times.

The government’s move was a considered one. Previously, Singapore had a thriving illegal money lending industry despite its small size. News articles about loan sharks exacting revenge upon people who were unable to pay their exorbitant interest rates were not uncommon.

Under the current legislation, licensed money lenders can charge a maximum of 4% interest per month. This is a welcome change that allows struggling Singaporeans to bridge financial gaps without incurring excessive debt.

A wide range of money loans

There are dozens of licensed money lenders currently operating in Singapore. Each of these businesses generally offers a wide range of loans instead of specialising in specific ones. Their portfolio is built around the most common reasons that people apply for a legal loan in Singapore. You use a usda eligibility map to help you.

Among the specialised loans available are:

  • Personal loan – general loan that can be used in any way the borrower wants
  • Debt consolidation loan – targeted at individuals who are struggling to pay existing loans
  • Payday loan – short-term loan to help the borrower manage expenses between paychecks
  • Business loan – for current and budding entrepreneurs who want to fund their business or idea
  • Grab/Gojek loan – Grab and Gojek ride share companies can be a lucrative income source
  • Wedding loan – for couples who cannot afford to pay for their nuptials in one go
  • Renovation loan – home renovation is a popular, and relatively expensive, Singaporean favourite
  • Medical loan – deal with large medical bills without compromising on healthcare standards
  • Study loan – fund your own or your children’s studies

Apart from this extensive range, most licensed money lenders are willing to create bespoke online loans for individual clients. The process will involve more paperwork and possibly require that the borrower nominate one or more sureties as well. However, the cap on interest at 4% per month still applies.

Choosing the best loans

Loan aggregators  play an important part in this relatively new local industry.

These organisations have the borrower’s best interests in mind. While each money lender naturally touts itself as better than its competitors, a loan aggregator can help you choose between them using impartial criteria.

Perhaps most importantly, a loan aggregator focuses solely on legal money lenders. This is a critical protection against criminal elements who use excessive interest rates to prey on vulnerable borrowers.

Borrowers can also take some simple steps to protect themselves. These are the common warning signs of an unlicensed money lender:

  • Advertisements on social media – Government guidelines limit money lending ads to the company’s website, outside their business office, and in consumer directories. If you see an ad outside of these three platforms, it is either an illegal lender or a legal lender acting illegally. Avoid them both.
  • Virtual loan approval – While the initial assessment process for a loan can be conducted online, licensed lenders must verify borrowers’ details and identity in person. The principal loan amount should only be transferred to the borrower after this in-person corroboration.
  • ID and details – All legal lenders must verify a borrower’s ID (NRIC or FIN card/passport) before granting a loan. However, they cannot take and keep any personal documents from the borrower. They are also prohibited from asking for passwords to your SingPass, internet banking or email accounts.
  • Paperwork – Every legal loan is formalised with the signing of a Note of Contract, which must be provided to the borrower. This document must contain details such as the loan principal, interest rate and payment schedule, as well as a list of all applicable fees and charges. If these details are missing or if there is no paperwork altogether, you are dealing with an illegal money lender.


The Singapore online loan industry provides a valuable bridging service as the international economic recovery continues. That is essentially why it will continue to grow in the foreseeable future.