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Illegal Money Lender Singapore: How To Identify Them

Guy in handcuff with money
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When we speak about a Loan shark in Singapore or ‘Ah long’,  we generally feel unsafe with them. Well, truth be told, those feelings are genuine. But as a borrower,  what you can do is to be diligent and equip yourself with knowledge on how to identify them. We hope through this article you are able to get some insight on how to spot a licensed moneylender vs. an illegal moneylender in Singapore.

First, you need to understand that moneylending in Singapore is a very popular industry because many people flock to it if they need fast cash without the hassle of applying for personal loans from banks. Moneylenders are less tight in their requirements than banks and at times can provide better interest or repayment modes.

Unfortunately, while this is a booming business, other suspicious people will like to place their hands on it and take advantage of others who are not knowledgeable about unlicensed moneylending.

Illegal money lender Singapore is undoubtedly a ban on any country’s economy. These loan sharks Singapore or Ah long are the types of lenders who put borrowers under financial strain.  This loan shark harassment is very imminent putting the borrower at risk of not only financial problems but as well as psychological problems.

Borrowers who have reached an unfair deal with loan scams, face a tough challenge of paying back their loan. Furthermore, Singapore loan sharks and unlicensed moneylenders are known to charge exorbitant fees and high-interest rates to make borrowers struggle financially and get into further debts.

One of the best way to tell if a moneylender is licensed or not is by checking the official list of approved moneylenders through Singapore’s Ministry of Law website.  Singapore’s Ministry of Law will only list your financial corporation unless you passed all the needed requirements to be a licensed moneylender. Having due diligence is key to ensuring we do not place ourselves in a difficult position and fall on this loan shark Singapore scams.


Legal Money Lender VS. Illegal Money Lender Singapore-  How Do They Operate?

Businessman holding magnifier glass for financial data analysis

Through this post, we hope that we are able to assist your understanding of how to identify licensed moneylenders versus illegal moneylenders or loan sharks.

First and foremost, always check the legitimacy of a moneylender through the Singapore Ministry of Law website. The Ministry has a special division known as the Moneylenders Registry that lists and monitors all of the country’s licensed moneylender.

But In case you encounter a suspected loan shark that shows the following behaviour then you must report your local law enforcement before they start harassing you.

Behaviours such as follows:

  • Moneylender starts being a little more aggressive and threatening
  • Moneylender starts to abuse you with foul and demeaning languages
  • Moneylender offers a loan which you did not apply for  or they try to bypass some procedures during application.
  • Moneylenders provide you with a loan without any proper loan requirement protocols
  • Moneylenders request a copy of your ID for safe-keeping
  • Moneylenders provide you with loans that are too good to be true.

These are some telltale signs which you need to be aware of. As a borrower, you need to be careful and protect your well-being when looking for loans with moneylenders.  


Signs a Moneylender is Licensed:

  • Moneylenders ask the borrowers to be properly met face to face.
  • Loan borrowers are requested that they go down to the office to apply a certificate of identity, evidence of revenue to payslips over the past 3 months before the loan is even disbursed to the borrowers
  • Also, a professional lending provider might ask about your credit history. Having bad credit might not prevent you from getting financial loans, however, it might have an effect on other areas like the approved loan amount.


Real-life Loan Shark Cases

One case that comes to mind, as documented in Lian He Evening Post (2015), a Singaporean man and his dilemma of owing S$13,000 from a loan shark when his initial borrowed amount was only S$700.  Another scenario was a 15-year-old teen was reportedly arrested, as she was caught splashing red paint on a residence at Tampines Street 45. These are just some of many stories of dilemma in which borrowers had encounter and experience.  Awareness and understanding are key.


How Do Illegal Moneylender Trick Us

Businessman with finger in moustrap

Moneylending is definitely a business opportunity whether they are legitimate or illegal. As a borrower, one must be vigilant and be aware of the moneylender. Illegal moneylenders lend money Singapore and tend to be rather sneaky and extremely accommodating.

For moneylenders, one key thing is that they are not allowed to advertise outside their directories, their official website, official social media or their premise. Singapore loan shark tend to do the other way around, and if you see such offers outside these norms, then it’s a  red-flagged which you need to be aware of. 

Here are some key indicator which could help from falling into their tricks;

  • Illegal moneylenders or loan sharks appear to emulate the legal moneylenders’ style in terms of how their names look, business permit and often imitate license numbers the legal moneylenders use.
  • Fake moneylender or loan sharks will include official-looking promotional materials from posters, social media platforms, and directories, and the false moneylender name and license number would be copied.
  • Fake moneylenders or loan sharks would copy how lawful moneylenders and banks write official SMS, then edit it to look like official messages with their name on it. We will also use professional-sounding workers to perform the calls to authenticate their bid sound.
  • Illegal moneylenders or loan sharks will also have a confusing and tricky application process. One key indicator is that the process of application does not follow an order and some may resort to suggesting that some documentation can be skipped. The loan repayment is also vague or unclear as illegal moneylender will not use lawyer to write the contract or any business-related matter.
  • Illegal moneylenders or loan sharks will definitely have very vague or high-interest rates. They will also have hidden additional charges compared to a licensed moneylender where everything is set and governed by Singapore law.

As borrow, we just need to extremely vigilant and careful above are just some key indicator to help you.


How To Identify A Legitimate Moneylender

Two business people shaking hands

As we see illegal moneylenders imitate or duplicate the style of licensed moneylenders and their certificates, it will be hard for those who do not know what to look for to distinguish the trustworthiness of the moneylender.

If you have a doubt in the legitimacy of the money lender you are approaching, you verify them via the Ministry of Law of Singapore, as it is by law that licensed moneylenders are registered with the ministry.  On the website, you are able to see the list of licensed money lenders.

These are the stuff you should know about regarding the distinction between licensed moneylenders and illegal moneylenders:

  1. Licensed moneylenders are not allowed by law to advertise their goods and services via email, e-mail or call. They can only post their services through legal channels, for example through their websites.
  2. No loans are offered directly to clients and processed by licensed moneylenders via mobile discussion. Clients have to be the ones to ask via call or email about their operation. Data delivery is typically performed on-line as well as offline.
  3. Licensed money lender do not use mobile numbers when it comes to their ads. All licensed moneylenders must use their company phone numbers when posting their details on their website and other key areas and when they are in contact with customers.
  4. Licensed money lender will not invite clients at these meetings to see them face-to-face or collect their income records. The customers just need to register their interest on the moneylender ‘s website and wait in for their appointment with the moneylender before you can deliver the required document criteria. Licensed moneylenders do not retain consumers’ confidential information or their records either.
  5. Licensed money lenders will never collect or request for customer sensitive information like SingPass for any loan applications.
  6. Licensed money lenders will require both parties to sign a contract detailing the loan they’ve applied for, the amount borrowed, the terms of repayment and the fees the customer must pay. This is the only document that you will be signing and keeping as evidence of your transaction. When any party violates the deal, it will be covered by law. All the procedures are following requirements from the government.
  7. The interest rate and other associated expenses paid by licensed moneylenders are set over the term of a loan. Licensed moneylenders are now demanding only two separate loan payments: late fees, and payment fees. False moneylenders will change the interest rates of the loan, and apply for extra payments not applicable to the loan.
  8. One key principle of license moneylenders is that they do not use intimidation when searching for late repayments. They will contact you for the collection of your payment via SMS, E-mail or visit your office or home. If you are having trouble covering your loan, you should speak to them and request an extension.

Check out here for the Ultimate Guide to borrowing from Licensed Money Lender in Singapore.

How to Deal With Illegal Moneylender

As you would know by now, moneylending is Singapore is a legitimate operation especially those who had to obtain a license from the Ministry of Law of Singapore,  but that does not deter loan sharks or “Ah Longs” from taking advantage of an unsuspecting individual.

From what we have learned above we now know how we can be more vigilant about spotting a fake moneylender or loan shark.  Moreover, below are the ways on how to deal with them if you have encountered them.

 1. Avoid directly interacting with them

Two wood models keep distance with the gap to avoid interaction

Ignoring them is the only way to cope with loan sharks and unlicensed money-lenders. At first, these loan sharks may seem sympathetic to your financial need, but they will charge your loan with unlawful high-interest rates when you negotiate loans with them. The maximum interest rate which approved money lenders can charge for your reference is 4 per cent per month

 2. Avoid being persuaded by their offer

Don’t take advantage of a loan from a loan shark or an unlicensed moneylender, no matter how desperate you might be in trying to get money. Obtaining a loan from them would place you in a financial trap which you can consider difficult to get out of.

3. Always verify their business license of the moneylender

Lawyer checking legal document

If you are offered a loan by a lender then be sure to check whether or not that lender is licensed. There is a list of registered moneylenders that can be found on the Ministry of Law Singapore website.

 4. Understand legal channels in the moneylending adverts.

Loan sharks and moneylenders without a permit use unauthorized outlets when promoting their business. Licensed moneylenders in Singapore can only advertise across three types of channels: electronic or printed company or customer directories, moneylender-owned blogs, and ads uploaded or put within the moneylender’s business premises. 

Another thing is that, if you have been approached by a loan shark or unlicensed moneylender via flyers, emails, text messages or calls, then ignore these ads and inform the relevant authorities. Never respond to those advertisement forms.

 5. Understand where to lodge a complaint

As a member of the public, if you feel uneasy or threaten by approach of illegal moneylender, it is advisable that you lodge a complaint through the I-Witness portal at or call the police hotline on 1800-255-0000

 6. Obtain proper financial advice from experts

You can seek help from financial experts who can give you advice on how to borrow money properly, so you can have a better handle on your loans and financial status. Also, they can teach you how to properly manage your debt, expenses and income. You won’t give in to the lure of loan sharks and unlicensed moneylenders in this manner.

Whenever you are still unsure about the moneylender you are looking for, then you can check the ratings of several money lenders’ from knowledgeable Singaporean users or blogs of past and present customers. Past and existing customers, as well as rating pages in Singapore, are excellent sources to see whether the moneylender is legal or illegal and how good its services are. Lastly, the surest way to check is to visit the Singapore Ministry of Law website.


Final Words

If you find yourself in need of money, do not immediately respond to the advertisements you see online or around you because they may not be the solution you are looking for.

Before borrowing, research and learn all about the moneylender you want to borrow from and the loan you are planning to take. Everything is online now, so there’s no reason why you should ignore your research.

Finally, protect yourself by doing research and through the research, you protect your money against questionable individuals and companies. So, always do due diligence on researching, double-checking before signing on anything so that you do not need to worry through your loan tenure. Plus if you want to know more, you can always visit Loan Advisors for better understanding and clarity. Be safe from any loan shark and always do your research.

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