1 Fullerton Credit Pte Ltd is a licensed moneylender (License No. 100/2023) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.

Taking Legal Loans From Licensed Moneylenders vs Borrowing From Banks: What’s the Difference?

Legal loans agreement

What is a Licensed Moneylender?

The Moneylenders Act in Singapore describes those people who hold themselves out as the principal lender, an agent for a lending institution or the act for the regulation of moneylending. Their main agenda is all about the business of money lending and other connected matters to it. The law only authorizes one to become a money lender if they are licensed under the laws of Singapore, or if they are from those sectors who are exempted — as authorized by the Moneylenders Act.

Moneylenders who are excluded are those who are being permitted to lend money to other people, as long as it is under laws aside from the Moneylenders Act. One clear instance for this are pawnbrokers, who are authorized to loan, but are under the jurisdiction of the Pawnbrokers Act instead.

Furthermore, exempt moneylenders are those who are permitted to offer loans to other people because they have been granted such an exemption from the government. This exemption is only granted after the approval of the government of Singapore after having applied for it. All these processes are, of course, subject under the law.

Licensed Money Lender vs. Bank What’s the Difference?

In Singapore, banks and moneylenders have clear differences between each other. We will discuss these one by one as we move along, but in general, banks will usually target those who have a steady income, for instance, a good credit history, and other tedious matters.

Moneylenders, on the other hand, can only lend you so much, as compared to banks. However, they can be your quick go-to whenever your credit scores are seemingly inadequate. They also require less income streams from their borrowers.

To further illustrate, let’s discuss these one by one:

1. Approval Speed

If you have transacted with banks before, you will know that because of their institutionalization, they are well-known for their lengthy periods of approval, as well as their long payout dates. On the other hand, licensed money lenders are notorious for releasing their loans very much quicker–which can last from one day to a long period of one week.

Quick loan solutions are usually things that appeal the best for a lot of Singaporeans, and it seems that when it comes to speed, non-banked money lending services win convenience on this round.

The reason why it takes a lengthy period of time for banks to approve personal loans is because they would need ample duration of time to review your application documents, which include:

  • Your collateral (especially for higher loans);
  • Checking your credit score and other financial performance records;
  • Creating your risk profile as an individual, and most basically,
  • Your submitted proofs of income and other financial documents.

Moneylenders on the other hand do not need to evaluate all the aforementioned things as long as you have brought in and submitted their basic, required documents (although they may require you more than the usual–but only in rare cases).

One important thing customers should know about these lenders is that collaterals aren’t usually required for moneylenders, because they guarantee you rather smaller loans so that you won’t drown into so much debt.

Even if processes are quicker with moneylenders in Singapore as compared to banks, it is important to transact with a Singapore licensed moneylender and not from loan sharks or those who are not registered in the country’s registry of moneylenders. This registry can be found from the Ministry of Law in Singapore.

2. Eligibility & Requirements

You will get an idea by now that banks have lengthy approval processes because they have stricter terms when it comes to a customer’s capacity to pay, and their other requirements. They have to be more careful because as compared to money lenders in Singapore, these banks can loan customers higher amounts of money.

From another perspective, however, lenders will only require fewer documentation and requirements from their borrowers as long as your personal identity has been established. These include information on your income, employment, your address, and other personal items.

To give you an idea, banks would usually require you to provide a bunch of official documentation including:

  • Documents that will prove that you are at least 21 years of age;
  • Certificates of Employment (to prove that you are a full-time employee);
  • Your credit statements that can prove good credit standing (this is usually based from your previous transactions with other financial institutions).;
  • A copy of your NRIC;
  • Your most-recent pay slips (of three months at the very least);
  • A Notice of Assessment for two years;
  • Your 12-month CPF History of Contributions;
  • Proof of billing; and/or
  • Financial documentation that you have at least S$20,000 of income per annum.

Should your banks require you further documents, they could ask you for it. They usually do so when a collateral is needed; which is why it is important to consult with such financial professionals to be able to learn more about such requirements.

Lenders on the other hand are relatively more lenient to their customers. They can offer a fast cash loan or other money loans if you present the following, basic documentation:

  • Documents that prove that you are at least 21 years of age;
  • Your own NRIC Card;
  • Three months of your pay slips if you have worked for less than six months in the country;
  • An Employment letter of offer;
  • Your Singpass details; and
  • Proof of billing (usually home utility or credit card bills with your address on them would suffice).

 Should you have all the aforementioned documentation, you wouldn’t have to worry to apply for a loan, even if they are personal loans. They can release such loans within the day, or even less than an hour. This is another thing that makes moneylending services more convenient for clients.

3. Credit History

In most countries around the world, it is common knowledge to know that the system of credit scores when it comes to a personal loan is very much important for financial institutions. Credit scoring is an important tool for such organizations to be able to calculate the risk profile of the legal money lender ‘s clients especially when they end up with their debt consolidation.

Credit scores help reassure financial institutions that your personal loan in Singapore can be paid back in full to them. In order to know such scores, a borrower’s history of credits or other patronized loan products will be assessed to know which types of financing solutions are applicable for their borrowers. With these documents, loan terms, the interest rate, as well as your loan tenure and your monthly repayment plans can be determined.

On the other side of the loan coin, we would like to reinstate that a money lender Singapore hasn’t really issued you high amounts of personal loan services. However, these institutions give priority to citizens of Singapore, as compared to a loan foreigner . 

Furthermore, these moneylending institutions, as regulated by government agencies, target citizen employees who work for a particular company in Singapore, for instance, and those will relatively lower cash flow on their payroll. Because of these, The application process for such citizens is much easier. 

All you have to do is to sign a loan application form and your loan contract, submit your processing fees and other information online (especially to those websites with copyright 2020). After which, tailor made short term loans or other loan fast cash outs can be made hassle free for you. Moneylenders act and rules have made it safe and easy for borrowers to take their quick cash in a jiffy.

Let’s get the talk on credit history into detail:

  • Banks would have their staff pick on borrowers who have a good credit score (usually of 1000 and above). With this, borrowers can have access to customer service that will help them get a good chance of loan  approval.
  • In rare cases, financial institutions may authorize a personal loan even if they have relatively bad loan score credits. Usually these are based on your credit cards history at home. If they do approve your personal loans, business loan, home loan payday loan, or your cash loan, they may have stricter terms and conditions, higher interest rates, and a rigid payment plan.
  • It has been mentioned that lenders in Singapore do not solely focus on your Singapore 2020 credit history, but rather your income-to-debt ratio.
  • This income-to-debt ratio shows the importance of submitting all other necessary documents to prove that you are eligible for loans personal to you.
  • Emergency cash loans in Singapore come in the forms of a payday loan, a foreigner loan, or a fast cash loan will usually warrant a high amount of interest rates. These rates also help the loan business come up with operating hours, staff, and services to get in touch and attend to your loan personal needs –especially during tough times in and out of home.

4. Interest Rates

Financial institutions, as well as a licensed money lender in Singapore are required to follow interest rates regulated by the government, including the Ministry of Law. These apply to all of their services, including personal loans, a business loan, a foreigner loan, a renovation loan, or other short term and personal credit card needs. If a moneylender or a bank goes beyond the terms regulated interest rates, they may be sanctioned through all sorts of penalties. Talking about those details is a different discussion.

Even if both banks and all the long list of licensed moneylenders in the country are regulated, they still offer a different interest rate from each other. This would usually differ on your loan application, and the type of loan you are applying for: a personal loan, a business loan, a renovation loan, etc.

Both institutions offer loans in Singapore and calculate their interest rate (using a loan calculator) depending on their offered terms. Banks would usually offer the lowest interest, while the best money lender may offer otherwise. Loans personal to you may have better repayment details and more flexible repayment schemes as well.

Now, let’s get to the numbers:

  • For loans Singapore banks can offer, interests are around 4-10% based on the borrowed loan amount, and is usually calculated with an installment calculator on an annual basis (the rate may also be based on the number of times you have paid and have come once again to apply for a loan). As mentioned, this interest range may also change from time to time, depending on your terms and conditions.
  • The higher the value of your collateral for your bank, the lowest interest rate you can have. Just be sure to check on the details indicated on your loan contract, which will also include your repayments schedules, your privacy policy, and other details.
  • Lenders on the other hand, may not offer a low interest rate. In this loan business, they may charge you a rate of 1-4% per calendar month. For questions about your loan amount, you can always go to the lenders’ websites, click their contact us page, or visit them during their operating hours.
  • It is important to compare the amount of money you can save on your personal loan by comparing each moneylender from another. This will keep you hassle free when it comes to your loan renovation or loan tenure as the time goes by.

For more information, you can refer to this table below:

Money lender in Singapore Banks
Loan Amount  < S$1,500 Cash Depends on salary (up to 6x)
Speed of Loan Faster, within operating hours 1-2 business days long payment schedule
Loan Interest Rates Up to 4% per calendar month Depends, usually very low; (1% per calendar month)
Loan Standards Low; lenient; no credit cards needed High; rigid; tedious

Loan Approved


It seems that based on what has been presented, you can deduce that you are at an advantage when you borrow from a money lender in Singapore. For instance, debt accumulated on your credit cards will really hurt your financial credit and you might not be able to access a personal loan that easily with a low interest rate when it comes to banks.

But if your credit cards tap out and you will have to attend to your needs and would need a personal loan, it seems that a money loan Singapore can offer you is through a licensed money lender.

You wouldn’t have to worry about entrusting your cash needs to a moneylender because they are being regulated by the government. If you would like to be sure, you can check their license number online or through the home page of its appropriate government agency. 

Usually their contact us page may also give you access to the list of rights reserved for you, including their privacy policy, cash loan renovation and debt consolidation terms, cash credit and loan interest fees, 1 Fullerton Credit, among others. Just be sure not to borrow from personal loan sharks.

Applying for a personal loan is not that difficult as long as you know which serves that best of your interest. Just make sure to know your financial scores through your credit cards, read on debt consolidation, choose the right moneylender and licensed money lender like 1 Fullerton Credit – and get the best deals on loans!

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