At 28, Jeremy (not his real name) was navigating a perfect storm of adult milestones: a baby on the way, a newly purchased flat that had consumed his savings for renovations, and a wedding that was fast approaching.
Having already paid a non-refundable deposit on the venue, Jeremy sought a personal loan – only to face repeated rejections from banks. The reason often cited was his GX credit rating: a label that marked him as someone with no credit history to speak of, having always paid for everything on debit.
"My parents had always taught me to stay away from credit cards as they said it’s ‘not good to owe money’. They supported me through my degree without asking for anything in return, so I could not bring myself to ask them for more help to fund our wedding,” he shared, speaking on the condition of anonymity.
Fortunately for him, he and his partner eventually managed to hold their dream wedding as planned thanks to a short-term wedding loan from a licensed moneylender.
“It was a straightforward process that provided me the immediate bridge I needed back then, as it took less than a day for my application to be approved. They looked at my income statements and didn't penalise me for a blank credit history,” says Jeremy, adding that he managed to pay off the entire debt in less than two years.
Jeremy recounts his experience as a straightforward, regulated process that solved his urgent need – one that traditional finance could not see.
Many like him in Singapore have limited or no access to traditional bank credit, whether due to thin credit scores, irregular income, or existing debt burdens. It is for this underserved population that licensed moneylenders provide a much-needed service.
Sebastian Lau, Head of Consumer Services at Friday Finance, frames the often-misunderstood industry in proactive terms. He sees Friday, the trade name of licensed moneylender IFS Consumer Services, as a “force for good in an often-murky arena”.
“Friday is continually looking to alternative data to see if we can better define the risk profiles of our customers. This is because traditional metrics are usually stacked against underserved customers,” he says. One key initiative is developing new credit risk algorithms, which Sebastian believes will lower the company’s cost of credit and allow those savings to be passed on to customers.
In his view, the licensed moneylending industry continues to be weighed down by persistent social stigma – one that even clear contract terms, strict government regulations, and a 4% monthly interest cap have yet to fully erase.
“The stigma of our industry,” he explains, “is that all moneylenders are out to squeeze every dollar out of them.”
While Sebastian admits that some may seek to maximise legally allowed profits, he also believes there are many like-minded lenders who are working together to improve the industry, adding that he hopes to see a shift in public perspective over time.
This evolution can already be seen in modern lending products. Contrary to loan sharking – which often enforces strict terms of collection – many moneylenders now implement incentives to encourage timely repayments. For instance, Friday Finance offers a 50% refund on its administrative fee to clients who repay their loan in full and on time.
Should a borrower face difficulties, the response is structured.
Sebastian shares that Friday Finance follows pre-determined steps, typically beginning with messages and emails. However, for customers who proactively engage with the company about repayment challenges, the focus shifts to assistance. The company can formally restructure loans to ease cash flow and help them avoid incurring extra late payment and interest fees.
“I am proud to say that Friday is probably one of few moneylenders who would formally restructure a client’s loan so that they do not need to incur late interest and fees,” he says.
“As for unresponsive defaulters, Friday adopts a professional approach to debt collection and relies on the rule of law and passive collection strategies. This means that after ample efforts to reach out to the client fail, Friday will rely on public records to flag out such defaults in payment (such as MLCB or ACRA records), where the borrower may eventually reach out to us to negotiate the settlement of the amounts owed.”
As licensed moneylenders like Friday Finance work to overcome the public perception of “legal loan sharking,” one of the most significant safeguards for consumers is transparency and choice.
This is where comparison platforms like Lendingpot play a crucial role. Jennifer Tjahyadi, Product Lead, Consumer Loans at Lendingpot – which counts Friday Finance among its partners – shares that her team's central mission is to demystify the borrowing process and empower customers with clear choices.
The need for such clarity and choice is clear: Parliamentary data shows that between 2021 and 2023, borrowers took out a total of over 1 million unsecured personal loans from licensed moneylenders in Singapore. This demand is currently met by a crowded field of 153 licensed moneylenders in Singapore as at the start of 2026, according to the Ministry of Law.
While such variety presents borrowers with choice, it also creates the challenge of comparison. More than 18,500 personal loan applications were fielded by Lendingpot in 2025 alone, with a total loan volume exceeding S$16.6 million passing through its platform.
Based on Jennifer’s experience, first-time borrowers are often anxious about hidden fees or unexpected charges, whether they can manage repayments, and what happens if they miss a payment.
“To reassure them, the team is trained to explain things in a calm, step-by-step way — especially repayment schedules, total repayment amount, and key terms,” says Jennifer.
“We also encourage the team to ask simple questions like, ‘Would you like me to walk through a sample repayment scenario with you?’ That helps customers feel more in control and less overwhelmed.”
As someone who works closely with the customer-facing team to shape product decisions and improve the overall borrowing journey, she notes a steady pipeline of personal loan applications each month that range within the thousands.
Of the meaningful portion that gets approved (around 20-30%), Jennifer has observed many making a positive impact for the greater good.
“One case that stayed with me was a customer who needed funds urgently for a medical-related situation in the family. They weren’t borrowing for lifestyle spending — it was a genuine need, and timing mattered. What stood out was how relieved they sounded once they understood the repayment plan and knew they had a structured way to handle the expense instead of scrambling,” she recalls.
“It reminded me that while we talk about loans in numbers and risk models, for the customer it can mean stability during a stressful moment.”
While licensed moneylenders can offer more flexible criteria, Jennifer emphasises that this flexibility does not mean recklessness. The 70-80% of applicants who don't qualify are often screened out precisely to prevent the debt situations the industry is stigmatised for.
Beyond credit risk, she says common reasons include ineligibility due to age or residency, or incomplete documentation.
And as rejecting applications is a large part of everyday work for the customer-facing team, Jennifer emphasises that its members are trained to remain respectful and supportive while remaining firm, and to avoid placing blame or passing judgment.
This training is crucial, she notes, because one of the toughest parts of the job is balancing empathy with policy.
“Many customers come to us when they’re under pressure – unexpected expenses, cash flow issues, or urgent needs – so emotions can run high. The team has to stay supportive and calm while still ensuring we’re responsible with approvals and compliance,” says Jennifer.
One piece of advice that she repeats the most often to customers is to borrow only what they truly need – and ensure that the monthly repayment amount fits comfortably, instead of just barely, within their budgets.
“Even if a customer qualifies for a higher amount, I’ll always encourage them to think about long-term affordability and leave buffer for unexpected expenses,” she says.
“A loan should reduce stress, not create more of it later.”
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