Before you borrow from a licensed moneylender in Singapore, it helps to know which of two kinds of loan you are looking at. A secured loan is backed by an asset you pledge as collateral, such as property. An unsecured loan does not need a specific asset to be pledged. For loans from licensed moneylenders in Singapore, the biggest legal difference between the two is the borrowing limit. As of September 2026, unsecured loans are capped by your income, while secured loans have no borrowing cap. Licensed moneylenders are regulated by the Registry of Moneylenders under the Ministry of Law (MinLaw). This article looks at how each type works, how much you can borrow, what each can cost, and what is at stake if repayments slip. It ends with three questions to help you decide which, if either, suits you. How secured and unsecured loans work A secured loan in Singapore requires you to pledge an asset, such as property, as collateral. The asset is the lender’s security: if the loan is not repaid, it can be repossessed and sold. An unsecured loan works differently. It does not require a specific asset to be pledged, and approval rests on the lender’s assessment of your income, existing loan commitments and ability to repay. From licensed moneylenders, unsecured loans are limited by income-based caps, while secured loans have no borrowing cap. One thing does not change between the two. As of September 2026, the same 4% monthly interest cap applies to both. The table below sets the two side by side. Secured vs unsecured loans at a glance (as of September 2026) Secured loan Unsecured loan Collateral An asset, such as property, is pledged No specific asset is pledged Borrowing cap No cap S$500 to 6× monthly income, depending on income and residency, across all licensed moneylenders Maximum interest 4% per month 4% per month Maximum late interest 4% per month, on the overdue amount only 4% per month, on the overdue amount only Maximum late fee S$60 per month of late repayment S$60 per month of late repayment Maximum administrative fee 10% of principal, when the loan is granted 10% of principal, when the loan is granted Total-charges cap Interest, late interest, admin fee and late fees together cannot exceed the principal Same MLCB credit report Checked before the loan is granted Checked before the loan is granted If the loan is not repaid The pledged asset can be repossessed and sold Late charges apply; the lender may make a court claim to recover the debt These figures apply to loans to individuals. Business loans are subject to separate provisions in the Moneylenders Rules. Most rows are identical. The two loan types part ways on collateral, on the borrowing cap, and on what happens if the loan is not repaid, and those differences shape the rest of this article. How much you can borrow without collateral If you are considering an unsecured loan, the first thing to know is your cap. As of September 2026, the total you can owe in unsecured loans across all licensed moneylenders in Singapore combined depends on your annual income and residency status. For Citizens and PRs earning below S$20,000 a year, the cap is S$3,000. For foreigners residing in Singapore, it is S$500 below S$10,000 and S$3,000 from S$10,000 to below S$20,000. At S$20,000 or more, the cap is six times monthly income for both groups. Secured loans have no cap. Annual income Citizens and PRs Foreigners residing in Singapore Below S$10,000 S$3,000 S$500 S$10,000 to below S$20,000 S$3,000 S$3,000 S$20,000 or more 6 × monthly income 6 × monthly income Source: Registry of Moneylenders, as of September 2026. The tiers are set out in Rule 21 of the Moneylenders Rules 2009. The cap is one combined total, not a separate allowance for each lender. Say your cap is S$3,000 and you already owe S$2,000 to one licensed moneylender. Another licensed moneylender could then lend you at most S$1,000 unsecured. Licensed moneylenders check this through the Moneylenders Credit Bureau (MLCB) before granting a loan. In practice, the cap varies widely from one borrower to the next. As of September 2026: A Citizen earning S$3,500 a month (S$42,000 a year) has an unsecured cap of 6 × S$3,500 = S$21,000. A PR earning S$1,500 a month (S$18,000 a year) has a cap of S$3,000. A foreigner residing in Singapore earning S$800 a month (S$9,600 a year) has a cap of S$500. If the amount you need is above your cap, a secured loan from a licensed moneylender may be an option, because secured loans have no cap. That extra room comes with a different kind of cost, covered in the sections that follow. What each type of loan costs It is easy to assume that pledging an asset buys you a cheaper loan. Under the law, it doesn’t. As of September 2026, licensed moneylenders in Singapore can charge at most 4% interest per month on both secured and unsecured loans, regardless of your income. Interest is calculated on the principal still owing after repayments. The rate you are quoted depends on the lender’s assessment. So compare the terms you are actually offered rather than assuming one loan type costs less. Interest is not the only charge, but the list of others is short. Apart from interest, the Registry of Moneylenders allows only these charges (as of September 2026): an administrative fee of up to 10% of the loan principal when the loan is granted late interest of up to 4% per month, only on the amount repaid late a late fee of up to S$60 for each month of late repayment legal costs ordered by a court for a successful recovery claim Interest, late interest, the admin fee and late fees together can never exceed the loan principal. Court-ordered legal costs are separate from this cap. Worked example: the legal maximum cost of a S$3,000 loan These caps are easier to judge in dollars. This
