From 15 September 2026, the Ministry of Law (MinLaw) requires every licensed moneylender in Singapore to give borrowers a mandatory 3-business-day cooling-off period on unsecured, non-business loans. Change your mind within that window, and you can cancel the loan at a fraction of what it would have cost before. Here is exactly how the new rule works, how the refund is calculated, and — since it's a good excuse to revisit them — the other Moneylenders Rules that already protect every borrower in Singapore, whether or not you ever use the cooling-off right.
What changed, and why
Before this rule, if you cancelled a loan shortly after taking it, the licensed moneylender (LML) was allowed to keep the full loan approval fee — plus any interest that had already accrued. There was no requirement to give any of it back. From 15 September, that changes. During the 3 business day cooling-off window (weekends and public holidays don't count), an LML can only keep a capped portion of the loan approval fee if you cancel — and cannot charge any interest at all for those few days. MinLaw developed the framework together with the Credit Association of Singapore (CAS), the industry body representing licensed moneylenders.
How much you'd actually get back
The cap on what a moneylender can keep depends on the size of the loan:
- Loan of $5,000 or less: the moneylender can keep at most $50 of the approval fee.
- Loan above $5,000: the moneylender can keep at most 3.5% of the loan principal.
- Either way, the amount kept can never exceed the approval fee actually charged — and if you cancel in time, zero interest is added on top.
Example: a $1,000 loan
Say you take a $1,000 loan and the moneylender charges the maximum 10% approval fee upfront ($100) — so you receive $900. Cancel within the cooling-off period, and the most you'd have to repay is $950: the $900 you received, plus the $50 fee cap for loans under $5,000. You'd effectively pay $50 to hold $900 for a few days.
Example: a $10,000 loan
Take a $10,000 loan with a 2% approval fee ($200) and you'd receive $9,800. Cancel in time, and you'd repay up to $10,000 in total — the $9,800 you received plus the full $200 fee, since 2% is below the 3.5% cap for loans this size.
Example: a $5,000 loan at the boundary
This is where the cap really bites. A $5,000 loan at the maximum 10% approval fee would normally cost $500 upfront, leaving you with $4,500. But because this loan sits at the $5,000 cutoff, the moneylender can only keep $50 of that $500 fee if you cancel in time — meaning they'd have to refund the other $450. You'd repay just $4,550 in total, not $5,000.
The cooling-off period is new — these rules aren't
The cooling-off right is a genuinely new protection. But it sits on top of a set of Moneylenders Rules that have applied to every licensed moneylender in Singapore since 2015, and are worth knowing before you borrow at all.
Interest and fees are capped by law
- Interest: capped at 4% per month, regardless of whether the loan is secured or unsecured, or how much you earn.
- Late interest: also capped at 4% per month — and it can only be charged on the instalment that is actually overdue, not on your entire outstanding balance.
- Late fee: capped at $60 per month of late repayment.
- Upfront approval fee: capped at 10% of the loan principal, deducted once when the loan is granted. There's also a hard ceiling on the total: interest, late interest, and every fee combined can never exceed the original loan principal. Borrow $10,000, and the absolute most you will ever owe on top of that principal — combined, across every charge — is another $10,000.
How much you're allowed to borrow in the first place
For unsecured loans, the law caps how much you can owe across all licensed moneylenders combined at any one time:
- Singapore Citizens/PRs earning under $20,000 a year: capped at $3,000.
- Foreigners residing in Singapore earning under $10,000 a year: capped at $500.
- Anyone earning $20,000 a year or more: up to 6 times their monthly income.
- Secured loans aren't subject to a cap. That limit is aggregate — it applies across every licensed moneylender you borrow from at the same time, not per lender. A moneylender is required to check this before granting you a loan.
Signs you're not dealing with a proper licensed moneylender
These rules only protect you if you're actually borrowing from a licensed moneylender. Be wary if one:
- Uses abusive language or threatening behaviour.
- Asks for your Singpass user ID or password.
- Wants to hold onto your NRIC, passport, work permit, driving licence, or ATM card.
- Asks you to sign a blank or incomplete loan contract.
- Approves a loan over SMS, call, or email before even seeing your application form and supporting documents.
- Withholds any part of the principal it agreed to disburse.
Always check a moneylender against the Registry of Moneylenders' official list before signing anything, and make sure you're given a full, properly explained copy of your loan contract.
If you're already struggling to keep up
If existing loans are becoming unmanageable, you can apply for self-exclusion through the Moneylenders Credit Bureau (MLCB), which stops licensed moneylenders from granting you further unsecured loans for a period you choose. You can also reach out directly to voluntary welfare organisations such as Credit Counselling Singapore or Adullam Life Counselling, or lodge a complaint with the Registry of Moneylenders on 1800-2255-529 if a lender has treated you unfairly.
“A clear and consistent right for every borrower.” — P. Renganathan, President, Credit Association of Singapore
Compare before you commit
The cooling-off period, the interest cap, and the total-cost ceiling apply to every licensed moneylender in Singapore equally — so they don't tell you which lender's offer is actually the best deal for you. That still comes down to comparing repayment amounts, tenure, and total payable side by side before you decide. Every lender matched through Loanify is a licensed moneylender regulated by the Ministry of Law. Apply once and compare the offers you actually qualify for, rather than approaching lenders one at a time. This article is general information, not legal advice. Sources: Ministry of Law press release, 31 August 2026; Registry of Moneylenders FAQs on Borrowing From Licensed Moneylenders.
