Licensed Moneylender Loan Cooling-Off Period 2026

Singapore will impose a mandatory three-business-day cooling-off period from 15 September 2026 for all unsecured loans, other than business loans, taken from licensed moneylenders. MinLaw announced the measure on 31 August 2026 after consultation with the Credit Association of Singapore. It is a borrower-protection rule for a defined class of licensed-moneylender loans, not a general cancellation right for bank loans or business loans (MinLaw, 31 August 2026).

Scope and effective date

The three business days exclude Saturdays, Sundays and Singapore public holidays. The rule applies to unsecured loans from licensed moneylenders, while business loans are excluded. The Registry of Moneylenders under MinLaw is working with relevant parties on implementation, and the announcement gives lenders time to adjust their processes and systems before the 15 September start date (MinLaw, 31 August 2026).

Cancellation cost during the period

If a borrower cancels during the cooling-off period, the lender may retain only a permitted portion of the loan approval fee, subject to the limits in MinLaw’s annex. The borrower must repay the remaining principal amount actually disbursed after any upfront approval-fee deduction, plus the permitted retained portion of the approval fee. No interest is charged for the cancellation, and the total repayment cannot exceed the principal amount of the loan. The precise fee limit depends on the annexed schedule and loan circumstances; it should not be replaced with an invented universal percentage (MinLaw, 31 August 2026).

What the rule does not establish

The cooling-off period gives eligible borrowers an opportunity to reconsider an unsecured licensed-moneylender loan; it does not cancel the lender’s ordinary licensing framework, make every loan cancellable on identical terms, or guarantee that a borrower will qualify for credit. The announcement also records separate Registry best practices encouraging repayment incentives, digital borrower-management touchpoints and referrals for distressed borrowers; those practices should not be confused with the mandatory three-business-day cancellation rule (MinLaw, 31 August 2026).