Licensed moneylenders in Singapore may charge no more than 4% interest per month, and as of September 2026, that ceiling applies regardless of your income and whether the loan is secured or unsecured. The number most borrowers get wrong is not the rate. It is the base the rate is applied to. Under the Moneylenders Act, the 4% is calculated on the outstanding principal after each repayment, not on the amount you originally borrowed. On a S$3,000 loan repaid over six months, that distinction is worth about S$300.
Is the 4% charged on what you borrowed, or on what you still owe?
On what you still owe. As of September 2026, licensed moneylenders in Singapore must compute the maximum 4% monthly interest on the remaining principal after repayments – the reducing balance. Each repayment reduces the principal, so the interest portion of every subsequent instalment decreases as well. The 4% cap has been calculated this way since 1 October 2015, when the current rules took effect. A lender applying 4% to your original loan amount every month for the whole tenure is not using the statutory basis, and you should ask them to show you the calculation.
What does a S$3,000 loan at 4% per month actually cost?
As of September 2026, a S$3,000 loan repaid over six months at the maximum 4% monthly interest costs S$433.71 in interest. Here is the interest month by month, on equal monthly instalments of S$572.29. Each interest figure is 4% of that month’s opening balance.
| Month | Opening balance | Interest at 4% | Principal repaid | Instalment | Closing balance |
|---|---|---|---|---|---|
| 1 | S$3,000.00 | S$120.00 | S$452.29 | S$572.29 | S$2,547.71 |
| 2 | S$2,547.71 | S$101.91 | S$470.38 | S$572.29 | S$2,077.33 |
| 3 | S$2,077.33 | S$83.09 | S$489.20 | S$572.29 | S$1,588.13 |
| 4 | S$1,588.13 | S$63.53 | S$508.76 | S$572.29 | S$1,079.37 |
| 5 | S$1,079.37 | S$43.17 | S$529.12 | S$572.29 | S$550.25 |
| 6 | S$550.25 | S$22.01 | S$550.25 | S$572.26 | S$0.00 |
| Total | S$433.71 | S$3,000.00 | S$3,433.71 |
What else can a licensed moneylender charge on top of interest?
As of September 2026, only four charges are permitted on a loan to an individual borrower, and each has its own ceiling.
ChargeLegal maximumHow it worksInterest4% per monthOn the principal still outstandingLate interest4% per monthOn the overdue amount onlyLate feeS$60 per month of late repaymentPer month late, not per missed instalmentAdministrative fee10% of the principalOne-time, when the loan is grantedLegal costsAs ordered by the courtOnly on a successful recovery claim
| Charge | Legal maximum | How it works |
|---|---|---|
| Interest | 4% per month | On the principal still outstanding |
| Late interest | 4% per month | On the overdue amount only |
| Late fee | S$60 per month of late repayment | Per month late, not per missed instalment |
| Administrative fee | 10% of the principal | One-time, when the loan is granted |
| Legal costs | As ordered by the court | Only on a successful recovery claim |
On the S$3,000 loan above, an administrative fee at the 10% maximum would be S$300.It’s a one-time administrative charge.
How much more do you pay if a repayment is late?
Late interest applies only to the amount you failed to pay, not to the rest of your outstanding balance. If one S$572.29 instalment went a full month unpaid, the late interest would be 4% of S$572.29, or S$22.89. A late fee of up to S$60 may be added for that month. Together, that is S$82.89 for a single late instalment — more than three times the interest you would have paid on that month’s balance had it been paid on time.
Is there a limit on what a loan can cost in total?
Yes. Interest, late interest, the administrative fee, and late fees added together can never exceed the principal you borrowed. On a S$3,000 loan, all charges combined are capped at S$3,000, however long the loan runs or however many payments are missed. In the six-month example, interest of S$433.71 plus a S$300 administrative fee comes to S$733.71, well inside that ceiling. Court-ordered legal costs on a successful recovery claim sit outside the four capped charges.
How can you check the calculation yourself?
Take the outstanding principal at the start of each month and multiply it by the monthly rate you were quoted. If that matches the interest on your statement, the calculation is on the reducing balance. If the interest is identical every month on a loan you are actively repaying, ask how it was derived. Then add the administrative fee to the interest total, because a monthly instalment figure will not include it. Licensed moneylenders must explain contract terms in a language you understand and give you a copy of the Note of Contract, so these numbers should be available to you in writing before you sign.
Before you borrow
Work out the total you will repay, not just the monthly instalment, and satisfy yourself that it fits your income for every month of the tenure. Borrow only what you need and are confident you can repay on time – late fees and late interest add up quickly. If a repayment is going to be missed, speak to the lender before the due date rather than after it.
1 – APEX CREDIT PTE LTD is a licensed moneylender, Licence No. 148/2025, regulated by the Registry of Moneylenders, Ministry of Law. You can verify any moneylender’s licence on MinLaw’s list of licensed moneylenders before you apply. Interest is capped by law at 4% per month; the rate you are quoted depends on the lender’s assessment of your income, existing loans, and repayment ability.
FAQ
Is the 4% monthly interest calculated on the original loan amount?
No. As of September 2026, licensed moneylenders in Singapore must calculate the maximum 4% monthly interest on the principal still outstanding after repayments. The interest portion of each instalment therefore falls as you repay. Interest charged on the original amount every month is not the statutory basis.
What is the maximum interest a licensed moneylender can charge in Singapore?
As of September 2026, 4% per month is the legal maximum for loans to individual borrowers, regardless of income and whether the loan is secured or unsecured. This cap has applied since 1 October 2015 under the Moneylenders Act, and it is separate from the late interest, late fee and administrative fee ceilings.
How much does a S$3,000 loan at 4% per month cost over six months?
As of September 2026, interest on a S$3,000 loan repaid over six months at 4% per month on the reducing balance is S$433.71, with monthly instalments of S$572.29. An administrative fee at the 10% maximum adds S$300, bringing total charges to S$733.71.
Does the monthly instalment include the administrative fee?
No. The administrative fee is a one-time charge of up to 10% of the principal, applied when the loan is granted, and it is separate from the interest built into your instalments. On a S$3,000 loan that is up to S$300. Always add it when working out what a loan costs.
Can total charges on a licensed moneylender loan exceed the amount borrowed?
No. As of September 2026, interest, late interest, the administrative fee, and late fees combined can never exceed the principal borrowed. On a S$3,000 loan, all four charges together are capped at S$3,000. Court-ordered legal costs on a successful recovery claim fall outside these capped charges.
Is late interest charged on my whole outstanding balance?
No. Late interest of up to 4% per month applies only to the amount you repaid late, not to principal that is outstanding but not yet due. On a S$572.29 instalment a month overdue, that is S$22.89, plus a late fee of up to S$60 for that month, as of September 2026.
Who regulates interest rates charged by licensed moneylenders in Singapore?
Licensed moneylenders in Singapore are regulated by the Registry of Moneylenders under the Ministry of Law. The interest cap, fee ceilings, and total cost cap are set under the Moneylenders Act and the Moneylenders Rules. You can check any moneylender’s licence on MinLaw’s list of licensed moneylenders.