A loan contract should tell you exactly how much you are borrowing, what you will receive, how much every repayment costs and what happens if a payment is late.

However, borrowers sometimes concentrate only on the approved amount or monthly instalment. They may overlook the administrative fee, total repayment, payment dates or how late interest is calculated.

Before signing a licensed moneylender loan contract in Singapore, review every financial figure and ask the loan officer to explain anything you do not understand.

This 15-point checklist will help you examine a loan offer carefully, compare the actual cost and identify important questions to ask before making a commitment.

Key Takeaways

• Never sign a blank or incomplete loan contract.
• Check the approved principal against the amount you will actually receive.
• Review the interest rate, administrative fee and total repayment.
• Make sure every repayment amount and due date is clearly stated.
• Understand the consequences of missing an instalment.
• Confirm the early-settlement procedure.
• The contract must be explained in a language you understand.
• You should receive a completed copy of the contract.
• Keep every receipt and statement of account.
• Eligible unsecured loans may be cancelled during the three-business-day cooling-off period, subject to the applicable requirements.

What Is a Note of Contract?

A Note of Contract is the formal loan agreement used for a loan granted by a licensed moneylender.

It records the terms accepted by the borrower and lender, including the loan amount, interest, repayment obligations and relevant charges.

The Registry of Moneylenders publishes an official Form 1 Note of Contract template under the Moneylenders Rules.

The Ministry of Law states that a licensed moneylender must explain the terms of the loan in a language the borrower understands and provide the borrower with a copy of the contract.

Do not treat the contract as a routine form that must be signed quickly. It creates a legally binding financial obligation.

Before Reviewing the Contract: Verify the Lender

Check the lender’s:

• Registered company name
• Moneylending licence details
• Approved business address
• Official website
• Published telephone number

Use the Ministry of Law’s official list of licensed moneylenders rather than relying only on an online advertisement or message.

Licensed moneylenders in singapore are required to meet borrowers at their approved business premises for face-to-face identity verification. A loan transaction conducted entirely online or at another location is not permitted.

Magnus Credit Pte Ltd conducts its in-person loan process at:

301 Ubi Avenue 1, #01-279, Singapore 400301

Applicants can review what happens during a first visit before attending an appointment.

The 15-Point Loan Contract Checklist

1. Confirm the lender’s legal company name

The company name on the contract should match the licensed company listed by the Registry of Moneylenders.

Be cautious if:

• The contract uses another company’s name
• You are instructed to sign through an individual agent
• The address does not match the official registry
• You are asked to meet outside the approved office
• An unknown party claims to process the loan for the lender

Do not proceed until the lender’s identity has been verified.

2. Check your personal information

Review your:

• Full legal name
• NRIC, FIN or passport details
• Residential address
• Contact information
• Employment information

Tell the loan officer if any detail is incorrect. Do not sign on the assumption that it can be corrected later.

The lender should not retain your NRIC, passport, work pass or other personal identification document after completing the required checks.

3. Identify the loan principal

The principal is the amount you are formally borrowing before interest and applicable deductions.

For example:

In this example, the principal remains S$5,000 even though S$4,500 is disbursed after the administrative fee.

Do not confuse the net amount received with the contractual principal.

4. Confirm the amount you will receive

Ask the loan officer to state the exact amount that will be disbursed after any permitted upfront deduction.

Check:

• Approved principal
• Administrative fee
• Other deductions
• Net disbursement
• Payment method
• Disbursement date

The Ministry of Law states that the permitted upfront loan approval fee cannot exceed 10% of the principal.

If the principal is S$5,000 and the approval fee is 10%, the maximum deduction for that fee would be S$500.

5. Check the monthly interest rate

Licensed moneylenders may charge interest of up to 4% per month.

The 4% rate is a legal maximum, not necessarily the rate every borrower will be offered.

Confirm:

• The actual rate offered
• Whether it is stated as a monthly rate
• How frequently interest is calculated
• The amount of scheduled interest
• How repayments reduce the outstanding principal

Regular interest must be calculated using the outstanding principal after repayments allocated to principal have been deducted.

6. Review the administrative fee

The administrative or loan approval fee may be up to 10% of the principal when the loan is granted.

Ask:

• What percentage is being charged?
• What is the exact dollar amount?
• Will it be deducted from the disbursement?
• Does the net amount meet your actual financial need?

Borrowing more simply to compensate for an administrative-fee deduction increases the principal and may increase the total repayment.

7. Examine the repayment schedule

The repayment schedule should allow you to identify:

• Number of instalments
• Amount of each instalment
• First payment date
• Final payment date
• Repayment frequency
• Accepted payment methods

Do not rely on a verbal statement such as “pay monthly.” Each due date and amount should be clear.

A useful personal checklist is:

8. Calculate the total repayment

The monthly instalment alone does not tell you the complete cost.

Ask for the total amount payable if every repayment is made on time.

The calculation should help you understand:

Principal + scheduled interest + applicable upfront fee = estimated on-time borrowing cost

Compare the total repayment against the amount you will actually receive.

For example:

This is a simplified illustration only. Your actual figures depend on the contract.

9. Understand late interest

Late interest is different from regular interest.

A licensed moneylender may charge late interest of up to 4% per month, but it may apply only to the amount that is overdue—not instalments that have not yet become payable.

Suppose an instalment of S$500 is overdue.

At the maximum late-interest rate, one month of late interest on the overdue S$500 would be S$20.

Ask the loan officer to show exactly how late interest would be calculated under your contract.

10. Check the late-payment fee

A late fee of up to S$60 may be charged for each month of late repayment.

Confirm:

• When an instalment becomes overdue
• Whether the fee applies immediately or under another contractual trigger
• The amount charged for each late month
• The payment method for clearing an overdue instalment

The S$60 amount is a maximum, not an amount that every lender must charge automatically.

11. Review the total permitted charges

The total of these charges cannot exceed an amount equal to the original loan principal:

• Regular interest
• Late interest
• Administrative fee
• Late fees

For example, if the principal is S$4,000, those combined charges cannot exceed S$4,000.

This does not mean the entire repayment is capped at S$4,000. The borrower must still repay the principal. Court-ordered legal costs may also be treated separately.

12. Ask about early repayment

Your financial circumstances may improve before the final instalment.

Ask:

• Can the loan be settled early?
• Is there an early-settlement fee?
• How is the settlement amount calculated?
• Can you make additional principal payments?
• Will you receive written confirmation when the balance reaches zero?
• How long is a settlement quotation valid?

Do not estimate the settlement amount by simply adding the remaining instalments. Request an official settlement figure calculated for the intended payment date.

13. Understand the cooling-off period

From 15 September 2026, eligible borrowers taking certain unsecured loans from licensed moneylenders receive a three-business-day cooling-off period.

If the applicable requirements are satisfied, the borrower may cancel the loan during that period by returning the required amount. No interest is charged for a qualifying cancellation, although the lender may retain a limited part of the approval fee under the applicable formula.

If the loan is not cancelled within the cooling-off period, the contract continues under its original terms.

Read Magnus Credit’s complete guide to the licensed moneylender cooling-off period before relying on this option.

Ask the loan officer:

• Whether your loan is covered
• When the cooling-off period begins
• Which three days count as business days
• How a cancellation request must be submitted
• How much must be returned
• Which documents confirm cancellation

14. Review guarantor or surety obligations

If another person is standing as a guarantor or surety, that person must understand the legal responsibility being accepted.

The surety should:

• Read the full contract
• Understand when liability may arise
• Receive a copy of the Note of Contract
• Receive an explanation in a language they understand
• Keep their identification documents
• Never provide Singpass or banking passwords

Do not sign as a guarantor merely because you expect the borrower to make every payment.

15. Obtain a completed copy before leaving

Do not sign a blank or incomplete Note of Contract.

The Registry identifies these as unacceptable practices:

• Asking a borrower to sign a blank or incomplete contract
• Failing to provide a copy
• Failing to explain the terms and conditions
• Retaining personal identification documents
• Requesting Singpass or banking passwords
• Withholding the principal for unauthorised reasons

Before leaving the office, check that your copy includes all agreed figures and signatures.

Questions to Ask the Loan Officer

Use these questions during the contract explanation:

1. What is my approved principal?
2. What amount will I receive?
3. What administrative fee will be deducted?
4. What is the monthly interest rate?
5. How is interest calculated?
6. How much is every repayment?
7. When is the first instalment due?
8. What is the total amount repayable if I pay on time?
9. What happens if a repayment is one day late?
10. How are late interest and late fees calculated?
11. Can I repay the loan early?
12. Does this loan qualify for the cooling-off period?
13. How do I request cancellation during that period?
14. Which payment methods should I use?
15. Who should I contact if my financial circumstances change?

If an answer is unclear, request another explanation before signing.

Red Flags That Should Stop You from Signing

Do not proceed if someone:

• Pressures you to sign immediately
• Refuses to explain a clause
• Asks you to sign blank pages
• Promises to complete the figures later
• Keeps your identification card
• Requests your Singpass password
• Requests your banking password or OTP
• Asks for payment before loan disbursement
• Uses a personal bank account for payment
• Offers to complete the entire transaction online
• Meets you outside the registered office
• Gives figures that differ from the written contract
• Refuses to provide a copy of the agreement

Verify the business through the official Registry of Moneylenders list before proceeding.

What Records Should You Keep After Signing?

Create a dedicated physical or digital folder containing:

• Completed loan contract
• Repayment schedule
• Cautionary or explanatory documents received
• Proof of disbursement
• Every repayment receipt
• Statements of account
• Settlement quotations
• Correspondence about revised arrangements
• Final settlement confirmation

The Registry advises borrowers to obtain a receipt for every repayment and check the name, amount and date. Borrowers should also receive statements of account at least once every January and July and retain them as evidence.

Check Every Repayment Receipt

After making a payment, verify:

• Borrower’s name
• Payment amount
• Payment date
• Loan account reference
• Allocation of the payment
• Remaining balance, where shown
• Lender’s details

Report an incorrect receipt promptly rather than waiting until the loan is nearly completed.

What If the Contract Differs from the Verbal Offer?

The written contract is the document you will be expected to follow.

If any figure differs from what was previously discussed:

1. Stop before signing.
2. Identify the inconsistent figure.
3. Ask for an explanation.
4. Request a corrected contract if an error occurred.
5. Review the complete document again.
6. Sign only when the written terms are accurate and understood.

Do not rely on a promise that the lender will disregard the written term later.

What If You Do Not Understand English?

The loan terms must be explained in a language you understand.

Ask for clarification if you do not understand:

• A financial term
• A repayment condition
• A fee
• The late-payment consequences
• A guarantor obligation
• The early-settlement process
• Cooling-off cancellation requirements

Do not sign based solely on another person saying that the agreement is “standard.”

What Happens After the Contract Is Signed?

Once the loan is granted:

• Confirm that the correct net amount is disbursed
• Store the contract securely
• Record every repayment date
• Use only the official payment channels
• Obtain a receipt for every payment
• Review each statement of account
• Contact the lender early if repayment difficulty arises
• Request written confirmation after final settlement

For broader responsibilities, read Magnus Credit’s Notes to Borrowers.

Frequently Asked Questions

What is a licensed moneylender Note of Contract?

It is the formal document recording the terms of the loan granted by a licensed moneylender, including the principal, interest and repayment obligations.

Must the lender give me a copy?

Yes. The Ministry of Law states that the lender must provide a copy of the loan contract and explain its terms in a language the borrower understands.

Can I sign a blank contract to save time?

No. Never sign a blank or incomplete Note of Contract.

What is the maximum interest rate?

Licensed moneylenders may charge interest of up to 4% per month. The actual rate offered should be stated in the contract.

How much can the administrative fee be?

The loan approval fee may be up to 10% of the principal when the loan is granted.

What is the maximum late fee?

A late fee of up to S$60 may be charged for each month of late repayment.

Can late interest be charged on the entire balance?

Late interest may be charged only on the amount that is overdue, rather than future instalments that have not become payable.

Can I cancel after signing?

Certain unsecured loans may qualify for the three-business-day cooling-off period effective from 15 September 2026. Review the applicable requirements and contact the lender promptly.

Should I receive a receipt after every payment?

Yes. Check the name, payment amount and date and retain the receipt as evidence.

Can a licensed moneylender keep my NRIC?

No. The lender should not retain your NRIC, passport, work pass or other personal identification document.

Final Thoughts

A licensed moneylender loan contract in Singapore should be read carefully before it is signed.

Check the principal, net disbursement, interest rate, administrative fee, repayment schedule, total repayment and late-payment consequences. Confirm the procedures for early settlement and cooling-off cancellation, and make sure all terms are explained in a language you understand.

Never sign an incomplete document or rely on a verbal promise that conflicts with the written agreement.

Before applying, review Magnus Credit’s personal loan options, eligibility requirements and licensed moneylender information. You may also contact Magnus Credit if you need clarification before visiting its Ubi office.

This article provides general educational information and does not constitute legal or financial advice. Borrowers should review their individual contracts and seek professional advice when necessary.