Do you still think borrowing costs are only “interest”? They’re not, because what you repay usually includes several components. A loan usually comes with the principal amount, interest on the outstanding balance, and approved fees like an administrative fee, all clearly itemised in your contract. If you miss a repayment, late charges can apply too, which is why it’s important to look beyond the headline rate and understand the full repayment amount and schedule before you commit.
However, who you borrow from matters the most. Licensed, legal moneylenders in Singapore are regulated and listed with the Ministry of Law, follow strict legal caps on interest and fees to protect borrowers, while unlicensed lenders operate illegally and often tack on hidden charges. Fast Money, a reputed licensed moneylender in Singapore, explains the full cost upfront and guides you through the terms with written documentation, a clear contract, and a transparent fee breakdown.
This post aims to demystify interest rates and fees in Singapore by outlining what licensed moneylenders are permitted to charge, and what they aren’t.
Singapore Loan Charges 101: What Licensed Moneylenders Can And Can’t Charge
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Interest
What they can: Charge interest within the legal cap, calculated on the outstanding principal (what you still owe), and clearly stated in your loan contract and repayment schedule so you can see how it adds up over time.
What they can’t: Charge above the cap, “hide” the real rate in fine print, calculate interest using unclear methods, or change the rate midway without it being properly stated and agreed in writing.
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Administrative / processing fees
What they can: Charge an approved administrative fee within the legal limit, disclosed upfront before you sign, and itemised clearly so you know what you’re paying for and when it’s payable.
What they can’t: Add inflated or duplicate charges by splitting one fee into multiple labels (for example, “processing,” “handling,” “verification,” “system fee”), or introduce extra fees later that weren’t stated in the signed agreement.
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Upfront payments before disbursement
What they can: Explain all payable amounts clearly as part of the loan contract and only charge what is allowed and properly documented, with a receipt issued for any payment you make.
What they can’t: Ask you to transfer money first to “secure approval” or “release funds” such as a “deposit,” “insurance fee,” “stamp fee,” or “special admin fee” before you receive the loan amount.
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Late payment charges
What they can: Apply late charges only when a payment is overdue, in line with the legal cap, and based on the overdue amount (not the entire loan balance), with the terms written clearly in your contract so you know the consequences of missing a due date.
What they can’t: Charge late fees when you’re not overdue, impose uncapped late interest that snowballs uncontrollably, apply late charges on non-overdue instalments, or use confusing calculations that make it impossible to verify what you’re being charged.
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Documentation and transparency
What they can: Require a proper signing process with written documentation, including a loan contract that states the interest rate, fees, total repayment amount, and repayment dates, plus receipts for every payment so you have a clear paper trail.
What they can’t: Refuse to give you a copy of your contract or repayment schedule, avoid putting key numbers in writing, rush you through signing without explaining the total cost, or keep the final total repayment vague.
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Collection practices
What they can: Contact you in a professional, lawful way to remind you about payments, discuss repayment arrangements if you’re facing difficulty, and explain options such as rescheduling where appropriate.
What they can’t: Harass, threaten, or intimidate you, show up aggressively at your home or workplace, shame you publicly, or pressure you into taking another loan just to clear an overdue instalment.
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Legal costs (only in specific cases)
What they can: Recover reasonable legal costs only when formal legal action is taken and such costs are properly supported through the legal process.
What they can’t: Add “legal fees” as a threat, charge arbitrary “lawyer/admin/legal processing” penalties without legal basis, or claim that large legal sums are immediately due when no formal legal process has actually started.
To sum it up, whether you are considering an instant loan, renovation loan, business loan, or personal loan, moneylenders in Singapore, these “can vs can’t” checks help you understand what’s fair, what’s legal, and what should immediately raise a red flag.
Conclusion:
Understanding what’s legal (and what isn’t) helps you borrow with confidence and avoid hidden costs. The safest move is to work with a regulated lender that explains the full repayment amount upfront and puts every charge in writing. If you’re exploring loan options, speak to Fast Money to find the right fit and get a clear breakdown of rates, fees, and repayments before you commit. Contact us today!
