New Regulations for Moneylenders in Singapore

As of October 1, 2015, there are new regulations that will be in effect for licensed non-bank moneylenders in Singapore regarding fees, interest rates, unfair lending practices and unfair contracts. The new rules are expected to reduce total borrowing costs as well as the number defaults.

Old Controls on Borrowing New Controls on Borrowing
No upfront administrative fee 10% maximum upfront administrative fee
20% maximum effective interest rate (EIR) per year for borrowers earning less than $30,000 per year. No interest rate cap for borrowers earning $30,000 per year or more 4% maximum nominal interest rate (NIR) per month
Late interest tagged to interest rate per month 4% maximum late interest rate per month
No cap on late fees Late fees capped at $60 per month
Additional fees allowed in some situations No additional fees allowed
No cap on total borrowing costs 100%* cap on total borrowing costs