Do you find it difficult to obtain a typical bank loan in spite of the fact that you are confronted with an unforeseen financial need? In a fortunate turn of events, Singapore provides a variety of options for rapid cash solutions. When looking for quick financial assistance, the most obvious choices are pawnshops and licensed money lenders.

There are a substantial number of licensed pawnbrokers operating in Singapore, which means that there is an abundance of pawnshops from which to choose. Pawnshops are businesses that allow customers to obtain instant cash loans in exchange for valuable objects that they own. On the other hand, regulated money lenders provide borrowers with smaller loans, often up to six times the amount of their monthly salary. These loans can either be unsecured or secured, which requires the borrower to provide collateral in both cases.

Discover more about secured and unsecured loan.

Which of the two options, a pawnshop or a money lender, do you believe will be more beneficial to you, taking into consideration the specifics of your situation?

A Comparison of Pawn Shops and Personal Loan Lenders

There are a total of 239 pawnshops that have been registered and are licensed to operate in Singapore as of October 2023. You can find the updated list of pawnbrokers here. These stores fall under the regulatory authority of the Ministry of Law. Pawnshops present an appealing choice for individuals who are in possession of valuable items yet require quick access to cash.

On the other hand, licensed money lenders are people or organizations who provide Singaporean citizens, Permanent Residents, and foreign workers who are in possession of an Employment Pass with access to smaller loans. These financial institutions are subject to stringent regulations and are formally registered with the Ministry of the Law.

As a consequence of this, the government regulates the maximum loan amounts that financial institutions are permitted to provide, in addition to the interest rates and costs that are associated with such loans.

Refer to the table that follows in order to acquire a deeper comprehension of the differences that exist between pawnshops and regulated money lenders. This summary will aid you in choosing which choice caters more closely to your unique requirements so that you can make an informed decision.

RegulationRegulated by the Ministry of LawRegulated and registered under the Ministry of Law
Availability239 registered pawnshops in Singapore (as of October 2023)154 licensed money lenders (as of October 2023)
EligibilityAssets needed for collateralOpen to Singapore citizens, Permanent Residents, and Foreigners with Employment Pass
Loan TypesQuick cash loans based on assetsSmall unsecured loans, typically up to six times monthly income
Interest RatesSet by the pawnshopRegulated by Ministry of Law
FeesDetermined by the pawnshopRegulated by Ministry of Law
Collateral RequirementValuables such as jewelry, watches, electronics, etc.Unsecured (no collateral needed) or secured loans (involving collateral)
Repayment TermsShort-term loansShort-term loans
ConsiderationsIdeal for individuals with valuable assets looking for quick cashSuitable for those who need small loans with regulated interest rates and fees

Obtaining a Loan from Pawnshops

Obtaining a loan from pawnshops exclusively offer secured loans, which require you to provide them with an item of significant market value, referred to as a “pledge.” Here’s how the process unfolds:

  • You initiate the process by presenting one or more valuable assets, such as jewelry, luxury watches, or branded bags, to the pawnshop.
  • The pawnbroker assesses the value of your item and extends a loan to you in exchange. Typically, the loan amount ranges from 60% to 80% of the market value of your pledge.
  • You have a maximum of six months to repay the loan amount. Once you have fully settled the borrowed sum, along with any accrued interest, you can retrieve your pledged item.
  • Failure to meet the repayment obligations within six months will result in the forfeiture of your pledged item.

Pros of Getting a Loan from Pawshop

  1. Quick Access to Cash. Pawnshops offer a swift way to access cash without the need for a credit check or lengthy application process. This can be advantageous for urgent financial needs.
  2. No Credit Checks. Regardless of your credit history, you can secure a pawnshop loan because it’s a secured loan based on the value of your pledge, not your creditworthiness.
  3. No Impact on Credit Score. Since pawnshop loans are not reported to credit bureaus, your credit score remains unaffected, even if you cannot repay the loan.
  4. No Obligation for Repayment: If you’re unable to repay the loan, you won’t face legal consequences, and there’s no impact on your credit score. The worst-case scenario is losing the pledged item.

Cons of Loans from Pawshop

  1. High-Interest Rates. Pawnshop loans often come with high-interest rates, making them more expensive than traditional loans or credit options.
  2. Risk of Losing Valuables.  If you fail to repay the loan within the agreed-upon period, you forfeit your valuable pledged item, which can be emotionally and financially distressing.
  3. Limited Loan Amount. The loan amount is typically a fraction of the item’s market value, which may not fully meet your financial needs.
  4. Short Repayment Period.  You have a limited time, usually up to six months, to repay the loan, which can be challenging for some borrowers.
  5. Varied Appraisal. The appraisal process can be subjective, and different pawnshops may offer varying loan amounts for the same item. This necessitates shopping around for the best deal.

Overall, pawnshop loans are a viable option for those in need of quick cash with no credit requirements, but they come with the risk of high costs and potential loss of valuable possessions if the loan cannot be repaid.

Obtaining a Loan from Licensed Moneylenders

When borrowing from a licensed moneylender, you have the option to choose between two types of loans:

  1. Secured Loans: These loans allow you to borrow any amount but require you to provide collateral as security.
  2. Unsecured Personal Loans: With unsecured loans, you can borrow up to six times your monthly income, depending on your yearly salary. Licensed moneylenders are regulated and can charge a maximum interest rate of 4% per month. This interest rate cap applies regardless of the loan amount, your income level, or the repayment term.

Please keep in mind that the specific terms and conditions may vary among licensed moneylenders, so it’s advisable to compare offers and choose the one that best suits your needs.

Pros of Getting a Loan from Licensed Lenders

  • Quick Access to Cash: Licensed lenders offer quick access to cash, making them ideal for emergency financial needs.
  • Fast approval. Licensed lenders can approval within in minutes.
  • No collateral needed. Licensed lenders provides unsecured loan that does not require any collateral this implies that there’s no risk of losing it
  • Fixed Repayments. Licensed moneylenders typically provide a fixed repayment schedule, making it easier for you to budget and allocate funds for loan repayments.

Maximum loan amount up to 6x times your monthly income. Depending on your annual income, you can have the chance to borrow up to 6x your monthly income.


  • With impact to credit score. Failure to repay your loan can affect your credit rating and can lead to facing a legal action.
  • Often higher interest rates. Lenders can charge up to 4% on monthly interest rates.
  • Stricter loan repayments. You can charge with a late fee if you failed to repay on time.


  1. Are Pawnshops a Moneylender?

Under the Moneylenders Act, any person or entity, other than an excluded moneylender, who lends a sum of money in consideration of a larger sum being repaid is presumed to be a moneylender. While pawnshops share many features with licensed money lenders, they are not the same. Under the Moneylenders Act, pawnshops, or pawnbrokers, are considered “excluded moneylenders” and are licensed under the Pawnbrokers Act 2015.

  1. What Are Two Disadvantages of a Pawnshop loan?

a. Pawnshop Interest Rates: The interest rate of 1.5% per month may be relatively low compared to credit card loans but is still higher than personal loans from banks.

  1. Loan Amount: Pawnshops provide a one-time loan limited to the worth of your pledge. If your pledge has a low value, you will receive a lower loan amount. Failing to repay the loan will result in losing your pledge.
  2. Is It Better To Pawn or Sell an Item?

Choose to pawn if you need quick cash but don’t want to part with your valuable item. Pawn items if:

  • Your credit rating is poor.
  • You lack a steady stream of income.
  • Your financial situation is uncertain in the near future. On the other hand, if you sell an item to a pawnshop, you receive cash and have no obligation to the broker. Sell your item if you no longer need it and can put the money to better use.
  1. Do Pawnshop Loans Affect Your Credit?

Pawnshop loans don’t impact your credit rating. Pawning isn’t reported in official documents. However, failing to repay the pawnshop loan will result in the loss of your collateral.

  1. What Are Other Alternatives to Pawnshops or Licensed Moneylenders?

If you need to borrow money but prefer not to pledge a valuable item or take a loan from a licensed money lender, consider these alternatives:

  • Personal loans from banks: If you have a good credit rating, a stable income, and don’t mind waiting for approval, traditional bank loans are an option.
  • Borrow from family and friends: Though a sensitive subject, borrowing from family or friends may be a lower-cost alternative with less interest.
  • Ask for a payday advance: Requesting an advance on your salary from your employer can provide quick cash without interest charges.
  • Apply for financial assistance through government schemes: Consider a Debt Repayment Scheme, a debt consolidation plan with no additional interest, to help repay your loan within a set timeframe.
  • Read our moneylender guide for more information.

The Bottom Line

When you find yourself in need of financial assistance in Singapore, you have a variety of options to consider. Licensed moneylenders can provide fast cash loans within minutes, while pawnshops offer the opportunity to pledge valuable items for loans.

Pawnshops are ideal if you have valuable assets but limited income. They provide cash against your item, holding it until you repay the loan along with interest and fees. Moreover, pawnshops offer secured loans, while money lenders provide both unsecured and secured options.

On the other hand, unsecured personal loans from licensed money lenders can reach up to 6 times your monthly income if you earn a minimum of S$20,000 annually.

If you’re interested in obtaining a loan from a licensed money lender, MoneyIQ simplifies the process by offering a one-stop platform to find the best match of fast cash loan.

Published On: January 8th, 2024

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