On 14 September, a borrower who cancelled an unsecured loan from a licensed moneylender paid the full approval fee plus every day of interest that had built up. From 15 September, that same borrower pays no interest at all and gets most of the approval fee back.
One rule changed. This page sets out exactly what was true before, what is true now, and what stayed the same — because a fair amount of what borrowers assume changed on 15 September did not.
The old position
Before 15 September 2026, there was no cooling-off period on loans from licensed moneylenders. Once you signed and the money was disbursed, the agreement stood.
You could still settle the loan early, but you had no right to unwind it. A lender was entitled to keep the entire loan approval fee, and to charge interest for however many days the money had been in your hands. Changing your mind was possible, but it was not cheap, and nothing obliged the lender to make it cheap.
The new position
From 15 September 2026, unsecured loans from licensed moneylenders carry a mandatory cooling-off period of three business days. Saturdays, Sundays and Singapore public holidays do not count towards it.
Cancel inside that window and two things follow. No interest is charged, full stop. And the lender may keep only a capped portion of the approval fee — up to S$50 on loans of S$5,000 or less, or up to 3.5% of the principal on larger loans, and never more than the fee they actually charged.
The Ministry of Law also set a hard ceiling: whatever the arithmetic produces, you cannot be required to repay more than the principal you borrowed.
Side by side
| Before 15 Sep 2026 | From 15 Sep 2026 | |
|---|---|---|
| Right to cancel | None | Three business days |
| Interest on cancellation | Charged for days elapsed | None |
| Approval fee | Lender kept all of it | Capped portion only |
| Maximum repayable | Principal plus interest | Principal, and no more |
| Applies to | — | Unsecured loans, excluding business loans |
What the change is worth
Take a S$4,000 loan with a 10% approval fee. Under the old rules, cancelling meant the lender kept the full S$400 and added interest on top. Now the retained amount is capped at S$50, and there is no interest. You are S$350 better off before a cent of interest is counted.
On a S$12,000 loan the gap widens. The old rules let the lender keep the full S$1,200 fee; the new cap is 3.5% of the principal, or S$420. That is S$780 back in your pocket, again before interest.
The pattern holds across loan sizes: the larger the loan, the more the old rules cost you to walk away from, and the more the new cap returns.
What did not change
This is where most of the confusion sits. The cooling-off period is one rule, not a general overhaul, and these remain exactly as they were:
- Interest and fee limits on ongoing loans. The caps that applied to your repayments before 15 September still apply. Nothing about a loan you intend to keep has changed.
- Business loans. They are excluded from the cooling-off period entirely.
- Secured loans. The rule covers unsecured lending.
- How you apply. Licensed moneylenders must still meet you in person at their approved place of business and verify your identity face to face before granting a loan.
- Advertising restrictions. Licensed moneylenders still cannot solicit you through text messages, phone calls or social media. If you receive one of those, it is not from a licensed lender.
- Your obligation to repay. Cancelling returns the money; it does not erase the loan from existence. You repay the principal that reached you, plus the capped fee portion.
Why it changed
MinLaw developed the framework with the Credit Association of Singapore, the association representing licensed moneylenders, and announced it on 31 August 2026. The reasoning given was that credit decisions are sometimes made under pressure or on impulse, and borrowers should have a short window to reconsider — while lenders still recover the cost of assessing and granting the loan.
The Registry of Moneylenders had already updated its Professional Service Handbook in April 2026, encouraging lenders to reward early repayment, give borrowers digital tools to track their loans, and help those in difficulty through restructuring or referral to a Social Service Agency. Those are encouraged practices rather than legal duties, but they point the same direction.
Cancelling a loan with us
Our loan approval fee is 10% of the principal, which is the maximum permitted. That means the retained portion on cancellation will always be the full cap — S$50 on loans of S$5,000 or less, or 3.5% of the principal on larger loans. Nothing above that, and no interest.
Cancellation is confirmed in person at our Ang Mo Kio office. Call ahead so we can put your request on record and prepare your settlement figure, then come in with the same documents you provided when you applied, along with your loan agreement. Settlement is completed within 24 hours of the cancellation being confirmed.
To be clear about the two timeframes: your cooling-off deadline is the end of the three business days, and the 24 hours relates to settling the cancellation once you have told us. Do not treat the 24 hours as your deadline to decide.
Coming in is our process for confirming a cancellation rather than something MinLaw requires. If reaching Ang Mo Kio inside your window is genuinely difficult, call and tell us — what matters is that we hear from you before the deadline.
Sincere Moneylender Pte Ltd · Licence No. 94/2026 709 Ang Mo Kio Avenue 8, #01-2583, Singapore 560709 Phone: 6291 5665 Monday to Friday 11.30am – 7.30pm · Saturday 11.30am – 7.00pm · Closed Sundays and public holidays
Sources: Ministry of Law press release, 31 August 2026 · Registry of Moneylenders