Bank, Licensed Moneylender, or
Private Credit

Three Lender Types, Three Different Universes

Most borrowers in Singapore think in two categories: bank or moneylender. The reality is three — and understanding the third, private credit, changes the decision for many borrowers.

Each operates under different regulation, draws capital from different sources, and serves a different borrower profile. None is universally better or worse. The right choice depends entirely on your situation — which is why CraftWise exists.

Banks

Regulated by MAS. Funded by deposits. Banks offer the lowest interest rates and the largest loan quantums, but operate within rigid credit policies that leave little room for non-standard situations. Approval is slower, documentation requirements are heavy, and if your profile doesn't fit the template — a gap in income history, an unconventional collateral type, a business less than two years old — you may not receive an offer regardless of your actual ability to repay.

When a bank is right: you have a clean credit profile, steady documented income, standard collateral, and time on your side. For vanilla mortgages and established SME facilities, banks are usually the most cost-effective option.

When a bank wastes your time: you've already been declined once, your income is irregular or commission-based, the property is non-standard, or you need funds within days rather than weeks. Repeated applications hurt your credit bureau record.

Licensed Moneylenders

Licensed by MinLaw under the Moneylenders Act. Funded by their own capital and borrowings. Licensed moneylenders fill the gap banks leave — approving faster, requiring less documentation, and accepting borrowers with imperfect credit histories. Interest rates are higher than banks but are capped by regulation.

When a licensed moneylender makes sense: you need speed (approval in days, not weeks), your credit history has blemishes a bank won't overlook, the loan quantum is smaller, or you need a short-term bridge while waiting for a bank facility to process. Many borrowers use a moneylender facility as a stepping stone back to bank financing — this is exactly the kind of exit planning CraftWise advises on.

The stigma is outdated. Licensed moneylenders in Singapore are regulated, audited, and capped on what they can charge. They are not the same as unlicensed loan sharks. Confusing the two costs borrowers real money by closing off a legitimate option.

Private Credit

Private credit lenders are neither banks nor licensed moneylenders. They are typically fund-backed or family-office-backed entities that deploy capital directly to borrowers, often in larger quantums and more complex structures than moneylenders can offer. They are legal in Singapore — this is not a grey area.

When private credit fits: the loan quantum is larger than a moneylender can provide; the structure is complex (multiple collateral types, cross-border elements, layered facilities); you've been declined by banks but have real assets or cash flow that support the loan; or you need a bespoke arrangement that doesn't fit any standard product. Private credit lenders have flexibility that banks structurally cannot match.

The trade-off is cost. Interest rates are typically higher than banks, sometimes comparable to moneylenders, but the flexibility and quantum make them the only viable option for certain borrowers. The key question isn't "is it cheap?" — it's "does the lending structure exist at all without this lender?"

Side-by-Side Comparison

Red Flags — For Every Lender Type

Banks: pushing a product that maximises their cross-sell (insurance, accounts) rather than the one that fits your loan. Quoting headline rates that don't include lock-in penalties or clawback clauses. Processing deliberately slowly on a refinance-out to force a renewal.

Licensed moneylenders: anyone operating without a licence displayed. Fees or charges not disclosed upfront in writing. Pressure to sign before you've read the contract. Any suggestion of "off-the-books" arrangements.

Private credit: opaque fee structures. Upfront fees charged before approval. Unwillingness to provide written term sheets. Any lender who can't clearly explain where their capital comes from.

Where CraftWise Fits

CraftWise matches across all three lender types. We don't represent any single lender or lender category — our advisory fee structure means we earn the same regardless of which type we recommend. This is the mechanical basis of unbiased advice: when no lender pays you more than another, the recommendation follows the borrower's interest.

For how our fees work in detail — and why borrowers pay nothing for a straightforward match — see our fee transparency page.