New 3-Day Cooling-Off Period for Moneylender Loans

What the cooling-off period means

The cooling-off period lasts three business days. Saturdays, Sundays and Singapore public holidays do not count towards it, so the calendar date you are working towards is usually further out than three days.

During that window, you can cancel the loan and walk away having paid no interest at all. Your moneylender is allowed to keep a portion of the loan approval fee to cover the cost of assessing and processing your application, but nothing beyond the limits MinLaw has set.

The rule applies to all licensed moneylenders in Singapore. It is not something individual lenders can opt out of or charge extra for.

Which loans are covered

The cooling-off period applies to unsecured loans, which covers the personal loans, payday loans and short-term cash loans that most borrowers take from a licensed moneylender.

Business loans are excluded. If you are borrowing for a company or business purpose, the three-day cancellation right does not apply to your loan.

What you repay if you cancel

Your repayment is made up of two parts:

1. The loan amount actually disbursed to you, after the approval fee was deducted upfront
2. The portion of the approval fee your moneylender is permitted to retain

No interest is added. MinLaw has also set an overall ceiling: the total you repay cannot exceed the principal amount of the loan. You will never owe more than you originally borrowed.

How much your moneylender can keep

Two details are easy to miss here. The tier is set by the principal amount, not the sum that reaches your bank account, so a S$5,000 loan sits in the S$50 band while a S$5,001 loan moves into the 3.5% band. And the cap is a ceiling, not a fixed charge. If your lender charged an approval fee lower than the cap, they can only retain what they actually charged.

A worked example

Why the rule was introduced

MinLaw developed the framework with the Credit Association of Singapore, the professional association representing licensed moneylenders. The stated aim is to give borrowers room to reconsider a credit decision that may have been made under pressure or on impulse, while still compensating lenders for the work involved in assessing and granting a loan.

The start date was set several weeks after the announcement specifically so that moneylenders could update their systems and processes first.

Other protections you already have

The cooling-off period sits alongside rules that have been in place for some time. A licensed moneylender cannot solicit loans from you through text messages, phone calls or social media. Any message offering you a loan through those channels is not coming from a licensed lender.

A licensed moneylender must also meet you in person at their approved place of business and verify your identity face to face before granting a loan. There is no legitimate fully-remote loan from a licensed moneylender in Singapore.

Separately, MinLaw’s Registry of Moneylenders updated its Professional Service Handbook in April 2026, encouraging lenders to offer rebates for early or on-time repayment, provide online tools for borrowers to track their loans, and help borrowers in financial difficulty through restructuring or referral to a Social Service Agency.

Cancelling a loan with Avis Credit

Avis Credit (SG) Pte Ltd charges a loan approval fee of 10% of the principal, applied once when the loan is granted and deducted from the amount disbursed to you. Because that is the maximum an approval fee can be, the amount we may retain on cancellation is always the full cap set by MinLaw rather than a lower figure.

In practice that means:

The first three rows fall in the S$50 band. The last two are above S$5,000, so the retained amount is 3.5% of the principal: S$280 on an S$8,000 loan and S$525 on a S$15,000 loan. In every case, no interest is charged and the total stays below what you originally borrowed.

How to cancel with us

Cancellation is done in person at our Toa Payoh office. You will need to come to the branch to confirm it — we cannot close a loan on a phone call alone.

1. Call us first. Ring +65 6883 2017 and tell us you want to cancel under the cooling-off period. This puts your request on record from the moment you make it, and lets us prepare your settlement figure before you arrive.
2. Bring the same documents you provided when you applied. Your NRIC or FIN, and the supporting documents used for your original application. Bring your loan agreement as well.
3. Come in and confirm. We will confirm the exact amount owed, which is the sum disbursed to you plus the retained portion of the approval fee. No interest is added.
4. Settlement is processed within 24 hours. Once the cancellation is confirmed and repayment made, we process the settlement within 24 hours and close the loan. That 24 hours is our processing time, not your deadline — your deadline is the end of the three business days. Ask for written confirmation that the account is settled, and keep it.

Coming in person is our process for confirming a cancellation, not a legal requirement imposed by MinLaw. If travelling to the branch within your window is genuinely difficult, call us and tell us — the important thing is that we hear from you before the deadline.

Contact us

If you are within your cooling-off period and want to cancel, get in touch as early in the window as you can. Saturdays, Sundays and public holidays do not count towards the three days, so a weekend will not shorten your window. We are open on Saturdays, so you can still come in and start the process on a day that does not count against the clock.

Call us before you visit so we can have your loan details ready.

Before you borrow

The cooling-off period gives you a safety net, but it is not a reason to take a loan you are unsure about. Three business days is a short window, and you still repay the principal plus part of the approval fee if you cancel.

Check that any lender you approach appears on MinLaw’s list of licensed moneylenders before sharing any personal information. Licensed moneylenders are regulated under the Moneylenders Act and are not banks; the terms, fees and loan limits differ.