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24 hours Money Lender Singapore: Are they legal or are they a scam?

24 Hours Money Lender Singapore
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Financial emergencies don’t come and go on a schedule. They arrive suddenly, often catching us off guard while requiring urgent cash to cover a dire expense, leaving you rattled, and desperate for an instant cash loan, even in the wee hours of the night.

Thankfully, money lenders in Singapore are known to have fast processing to expedite loan solutions. The question is: do they provide this urgent cash loan service round the clock?

In this article, we’ll find out if 24-hour money lenders do exist or if they’re taking part in illegal moneylender practices, as well as how you can avoid illegal lender scams while you look for somewhere to borrow money.


So, Are Licensed Money Lenders Open for 24 Hours?

Let’s cut right to the chase: 24-hour money lenders in Singapore are NOT a thing.

This is of course not to say that they’re an urban legend where a ghostly lender pops up if you say “money lender” enough times in a mirror, no.

24/7 money lenders in Singapore DO exist, but if you do find one open in the middle of the night, they are without a doubt an unlicensed money lender.

The only 24-hour service that a licensed money lender can provide is through their website for accepting loan applications online. Borrowers may apply for a fast cash loan online, but due to verification procedures, the transaction is only completed on the following business day.

A licensed money lender cannot disburse your cash to you online to your bank account, so if you apply in the middle of the night and are offered an urgent loan outside of money lender office hours, you might be dealing with a loan shark. Licensed money lenders in Singapore may only disburse money in person.


Are licensed money lenders open on weekends?

Luckily, yes. Licensed money lenders in Singapore CAN be open on weekends.

A licensed money lender open on a Saturday morning isn’t something you should call the cops on! But while they certainly can provide legal services during Saturdays and Sundays, not all licensed money lenders provide weekend services.

Still, unlike banks–which are perpetually closed on weekends–you at least do have the chance to get a personal or emergency loan with a licensed moneylender.

So if you do have a financial emergency in the middle of your weekend vacation, you might be able to find a legal money lender that can provide urgent loans.

You can also count on Loan Advisor to give you a hand in your search and curate a list of leans from legal money lenders that are open on weekends!


How to Confirm the Legitimacy of a Licensed Money Lender in Singapore

Unlicensed moneylenders and loan sharks are something one should always be wary about when, and there’s always a danger of accidentally coming into a deal with them be it for personal loans, business loans, or what have you.

The easiest and fastest way to confirm that an institution is an illegal money lender is by checking the Ministry of Law’s Registry of Licensed Moneylenders.

It is a full list of all licensed moneylender businesses in the country, which you can find on their website here.


The Dos and Don’ts of Licensed Moneylending in Singapore

Licensed money lenders are closely managed by the Singapore government, despite there being no actual laws that regulate their businesses.

There are very clear lines that cannot cross, and being aware of those guidelines can mean the difference between getting scammed and having a pleasant lending experience.

Here are some of the dos and don’ts of money lending services

1. Advertisements

DO: use approved channels for advertising their services

Licensed moneylenders are only allowed to advertise their lending service through channels required by the Ministry of Law. They are:

  • Consumer or business directories in print media;
  • websites that belong to the licensed money lender, and
  • banners, flyers, and other physical ads placed on the exterior or within their approved place of business.

DON’T: use SMS, emails, flyers away from their office for advertising their services

A licensed money lender in Singapore is not allowed to advertise using SMS messages, calls, emails, WhatsApp, and flyers outside the vicinity of their approved place of business.

If you happen to receive solicitations and ads from a money lender using these methods, be wary as they might be a loan shark.


2. Contacts and Listed Addresses

DO: have a physical address for their place of business

Face-to-face verification is a crucial part of the loan process and is required by the Registry of Moneylenders to complete loan transactions.

Because of this, a licensed money lender in Singapore must have a physical location for borrowers to visit.

DON’T: only use websites for their services

Loan sharks have adjusted to the digital age. They often lurk on the internet or base their operations in places that are not registered.

If you are in contact with a lender with no landline nor physical address, you are likely working with an unlicensed money lender.

Having a landline number registered online is also one way you can check legitimacy.


3. Verification

DO: verify their borrowers in person before a loan is approved

Even if disbursing an instant loan, loan providers must have borrowers come in for face-to-face verification to complete the transaction.

This is also because part of the approval process is making sure the borrower completely understands the loan contract for their financial safety.

DON’T: verify their borrowers online

If you get your loan approved by a loan provider through a digital channel, you are likely dealing with an illegal lender

Loan sharks may press you to continue with this method for convenience, but it may be the modus operandi of an online loan scam.


4. Loan Contract

DO: clearly explain the terms of the loan

A licensed moneylender must meet with you face-to-face for verification to complete the loan application.

This is intended to clarify all aspects of the loan, including terms, interest rates, and loan tenure.

It is Singapore’s policy to prevent individuals from taking on too much debt and worsening their financial difficulties, so licensed moneylenders will make sure you know what you’re signing up for.

DON’T: provide borrowers with a “blank contract”

In a blank loan contract, there are no written terms.

A blank contract may give you a verbal agreement on the terms of the loan, but without a legally binding document, you may be tricked into unfair terms that might jeopardize your financial security.

Unlicensed money lenders can convince you to accept the loan by telling you how convenient it is to get the money right away without undergoing the formality. 

They may even skip the formalities completely and proceed directly to disbursement to surprise you with unfair terms.


5. Interest Rates

DO: have interest rates within the required limit

The interest rates on any type of loan should not exceed 4%, and licensed money lenders in Singapore are expected to follow it to the letter.

This maximum rate was enforced to ensure that borrowers do not overestimate their repayment ability and bury themselves under debt.

Don’t: have interest rates higher than the limit

To scam borrowers out of more money, loan sharks and illegal money lenders will increase their interest rates beyond the limit.

Scams may often not do this immediately and spring it up at a moment’s notice.

You should keep track of the loan repayments you have to make in the contract, and if it remains consistent with what you have to pay each month during your repayment schedule


6. Upfront Fees

Do: follow the guidelines for processing fees

Money lenders must adhere to regulations regardless of whether they charge fees to process loans.

Loan agents are only permitted to charge specific fees, and before the loan has been processed, these fees cannot be charged. When the loan is delinquent, the agent can only charge certain fees.

You will be charged:

  • Admin fees not exceeding over 10% of the principal loan amount after the loan extension.
  • The late repayment fee, not to exceed $60 per month, as well as court costs and interest after the claim is successful.

Don’t: charge more fees during the loan application

Money lenders who don’t follow the regulations outlined above are likely to violate the law.

Illegal money lenders will charge administration fees before processing a loan, which is a way to trick you into paying extra cash. The lender may not charge you fees before accepting your loan application.

It is also possible that they will attempt to do the same before releasing the funds to you.

If a loan agent increases their charges outside of regulations, it’s best to avoid further contact. Additionally, loan sharks might hike up your late fees when they fail to get you to pay them back.


7. Approved Loan Principal

Do: Assess your loan requirements before deciding on the amount

The Monetary Authority of Singapore (MAS) regulates that the maximum loan amount you may borrow is based on 12x your monthly income. 

Generally, borrowing money will require you to take into account your debt-to-income ratio, credit history, and other factors besides your monthly income.

Banks and licensed moneylenders must adhere to this requirement to protect you from falling into deep debt, and to prevent you from borrowing far above what you can comfortably pay.

Don’t: Promise you unrealistic sums

You should be wary when a lender presents you with an offer that seems too good to be true, even if they offer to allow you to get your desired loan with few requirements.

Unless you at least have a solid credit standing and stable income, many illegal lenders will present you with a large loan principal even if it is an unsecured loan and offer other perks to lure you into debt. You will be buried under debt if it amounts to more than you can manage.

Don’t fall for it! Consider alternative options if the amount exceeds the maximum loan limits, or if your eligibility varies from the loan amount.


8. Loan Approval and Security

Do: Examine your requirements carefully and ensure you have the proper security measures in place

Various types of loans have distinct eligibility requirements. When it comes to a personal loan, your income and citizenship status are considered.

If you wish to obtain a personal loan, a licensed money lender must determine your eligibility based on a multitude of factors.

To qualify for a personal loan from moneylenders, you must meet the following eligibility requirements:

  • Minimum age of 18 is required 
  • Monthly income of S$1,500 a month for permanent residents; foreigners residing in Singapore must earn at least S$2,000
  • NRIC
  • Documents proving income and employment, like an employment contract
  • A valid proof of residence
  • Using SingPass to access the CPF, IRAS, and HDB websites

Money lenders are also forbidden from keeping important documents on hold.

Don’t: Approve your loan without proper procedure and retain your documents

Getting easily approved for a loan with a bad credit score might sound like a blessing, but it’s worth looking into the matter further on how a lender decided you are eligible.

Loan sharks will want to get you the loan as part of their modus operandi, and as such, they won’t make an effort to look into your ability to repay.

Carefully consider if the approved loan principal is reasonable for your financial situation.


9. Loan Disbursement

Do: Observe the correct loan disbursement procedure

A licensed moneylender will in most cases disburse the loan in person, along with the process of application for a loan.

Don’t: Directly transfer the loan amount to your bank account

You may be receiving an online loan scam from a money lender intending to make digital disbursements. While you can make online loan applications, disbursements need to be done by face-to-face meetings with money lenders.

Loan sharks may be the most likely people you find yourself dealing with if any of the signs above apply to you. Following the above advice, you should avoid further contact with loan sharks and report the harassment to the authorities.

You may either phone the Singapore police or the X Ah-Long hotline at these numbers:

  • You can call Singapore police at 1800-255-000 or 999 in case of emergencies and for immediate police response.
  • Alternatively, if you have information on loan shark activity, you can report it to National Crime Prevention Council’s “X Ah-Long” hotline at 1800-924-5664.

A Money lender registered with the Singapore Ministry of Law is held to a high standard as well when it comes to illegal lending and harassment. To report the lender, you can go to their website or call their telephone at 1800-2255-529.

The Registry ensures that your personal information is kept confidential if you are concerned about your identity. However, you may have to attend an interview in person to discuss your financial arrangements with the moneylender in question.

If you wish to complain to the Registry, your identity will remain anonymous. Choosing to take legal action against a moneylender who ignores your rights may be possible through the Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act.

Additionally, the Court can nullify lending agreements deemed to be unfairly structured or excessive.

As such, if you suspect that illegal lending practices are being used, you should immediately contact the authorities. The worst thing you can do is not be aware, particularly in hazardous activities such as violent threats, destruction of property, abusive language, and harassment that may damage your belongings or compromise your safety.

Businessmen shaking hands

Keep Your Borrowing Journey Safe and Scam-free

In addition to the warning signs listed above, people should verify the legitimacy of a supposed licensed money lender through the Registry of Moneylenders run by the Ministry of Law, which lists all licensed moneylenders in the country.

Before entering into a contract with a lender, it’s best to confirm that the company is legitimately operating in the country. The list can be found here.


The Bottom Line

  • Weekend money lenders are doing legal business, whereas 24-hour money lenders are breaking the law.
  • An emergency loan can be applied for online and a decision can be made the next business day.
  • Choosing a personal loan that is not convenient but safe is the best option.

Get in touch with Loan Advisor if you want the best personal loan options that are both safe and convenient. This loan comparison service offers loans from licensed moneylenders in Singapore that are catered to your needs. The list is based on your financial situation and offers you the most suitable options.


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