Beware Of These 6 Payday Loan Scams In Singapore

Many Singaporeans find themselves seeking to borrow some money from at certain times t in their lives. The cash may be for financing a car or home, medical emergency or even for furthering your education. It is at this point that taking out a personal loan comes in handy. However, this is not always the case for some people, since they do not have access to this possibility because of a poor credit score.

It so happens that on some occasions, some individuals are desperate to find some urgent money and are not able to do this through legal money lending institutions that usually have very stringent regulations. They instead end up borrowing from other sources. Even under such circumstances before you choose to take out a loan from alternative sources, there are a few loan types that you need to be wary of. Knowing this will help you avoid getting yourself into much bigger debts than before.

A Lot Of Unsolicited Contact

In most occasions, these types of lenders will often send numerous emails and even make calls to you every once in a while. On the other hand, the legal moneylenders never turn to such attempts as a way for them to source for possible customers. This is because the legal moneylenders don’t want to bother you without cause. It is therefore advisable that you disregard these spams or even report these types of lenders to the appropriate authorities.

Predatory Lenders – Loan Sharks

It is suggested that you be aware of this group of moneylenders, normally identified as “Ah Long” to Singaporeans. In many instances, loan sharks use deceptive, unfair, or fraudulent practices to lure borrowers who are desperately in need of quick cash. It so happens that loans sharks often target individuals who are not qualified to access loans from the legal sources which include banks. These individuals are not able to access loans because of their bad credit score.

As a way of finding a way to get in touch with potential borrowers, loan sharks usually use advertisements. They often will advertise insistently using ads on online platforms and even on public transport. The loan sharks normally try being friendly to you during your first meeting. However as soon as you agree to borrow from them, they drastically change their behaviour. From then on, they start harassing you demanding the repayment. And because loan sharks don’t adhere to the law, they many will end up charging you very high-interest rates that might leave you in even bigger debts in the end. The best suggestion at this point is that you do not deal with them.

Asking for Upfront Fees

Normally upfront fee scams will require that you give an upfront application payment before you can be issued a loan. These types of lenders will rationalize the fees by insinuating that it’s a compulsory processing fee charged on all their borrowers. They may even categorize it as security required because of your bad credit. After that, they will go ahead and ask you to provide them with your account details or even ask that you transfer funds online to them and in return, they promise to give you the loan.

As soon as you make the transfer, this lender will run off with your cash. Therefore, do not be surprised when they cut off the whole contact with you thus they don’t answer to your responses. Do keep this in mind – legal moneylenders do not ask borrowers for payments before giving you a loan.

Online Guarantees On Personal Loans

These types of loans are also called as the bad credit loans. These loans are normally intended as a short-term type of loans. And they are very convenient to access, which makes them rather attractive to most people in Singapore. Beware of any guarantees that give you a loan prior to evaluating your credit score, income, or other personal details as they possibly could be a scam. Also be cautious since some online companies are just trying to get access to your private information for dishonest purposes. To help you identify those companies that are legitimate, you probably need to keep in mind some of the basic signs:

  • The lenders need to have a customer service line
  • They should also have physical address for their business
  • There needs to be a physical store in addition to their online platform

The easiest way to make certain that you are working with a legal lending company is that you do your research. This way you will be able to find out additional information regarding the lending company from dependable sources.

Scare Tactics

The intimidation and harassment might come before you get the loan, and once after you have borrowed from these types of moneylenders. Licensed moneylenders will never pressurize you into taking their offer since they understand that it’s eventually a decision that only you can make.

Even after you’ve received the loan, these types of lenders may even resort to intimidating you by mentioning your relative’s names, whom they could harm should you fail to repay the loan. They might also threaten you with taking legal action against you for unpaid loans. These kinds of moneylenders are generally bold and often take advantage borrowers by creating fear in them using their scare strategies, which makes most borrowers vulnerable thus easy to exploit.

Phony “Legal” Moneylenders

These alleged “licensed” moneylenders pretend to be legal parties through the use of legitimate registration numbers given by the Singaporean Monetary Authority (MAS). They also post advertisements by using the legal business names of other lending companies. They usually will appear to you by means of random emails as well as social media posts.

For these reasons, before you opt to borrow from such moneylenders, make sure you validate the company details to confirm that they are truly who they say they are (you could use hotline and website). In general, the actual companies are hardly aware of these imposters who go around scamming potential borrowers.

10 Myths Of Licensed Moneylenders In Singapore Preventing You From Taking Your Loan

Many Singaporeans are uncomfortable with taking loans. Unfortunately, there are many things you require a personal loan or payday loan for. And the quickest way to get a loan is to visit a licensed moneylender.

Moneylenders are another group of people that have a bad reputation in Singapore. There are so many half-truths and complete lies surrounding them. Many Singaporeans would rather try their luck at a bank than go to a moneylender. This article is going to dispel 10 common myths associated with moneylenders in Singapore. These myths may be part of what is stopping you from getting a loan.

Know these things today and go to a licensed moneylender for your personal loan or payday loan without worries.

Myth #1 – There is only One Type of Loan to get from a Moneylender

This is not true. There are actually two types of loans that you can get from a licensed moneylender. These are secured loans and unsecured loans. Secured loans are those loans that you must have collateral to get them. Collateral is a valuable asset that you give to the lender to hold while you borrow money. If you cannot repay the loan, the lender keeps the asset. An unsecured loan is one that you can get without collateral. If you default on your repayments, the lender will take you to court, per the contract you and they signed.

Myth #2 – Secured Loans are Better than Unsecured Loans

These loans have their advantages and disadvantages.

  • A secured loan comes with comparatively low interest rates since there is a low financial risk for the lender
  • Because you have collateral, you can borrow large amounts with longer loan tenure

The disadvantages outweigh the advantages, though.

  • There is a specific criterion for what you can use as collateral
  • A secured loan takes a long time to process and approve. It can take up to 30 days
  • Defaulting on your loan repayments gives the lender the right to confiscate your assets and sell them to pay that loan.


Myth #3 – Unsecured Loans are Better than Secured Loans

The pros of an unsecured loan are:

  • Unsecured loans take a short time to process and approve. You can apply and receive your loan in hours
  • You can get an unsecured loan even if your credit score is poor
  • You don’t need to secure your assets for this loan

And the cons are:

  • Since unsecured loans are riskier, they attract higher interest rates
  • The amount you can borrow is limited and is determined by your monthly/annual income
  • The loan tenure is short, and repayment plans are strict


Myth #4 – All Moneylenders in Singapore are ‘Ah Longs’

This is also not true. Moneylenders are actually a legalized lending institution. They have an association, and their activities are governed by the Ministry of Law. All moneylenders are required to be licensed, and they must pass certain tests before they can get that license. There are unlicensed moneylenders, the real ‘ah longs’ who deceive people and make their lives miserable. But not all moneylenders are loan sharks.

Myth #5 – You Can’t Tell the Difference between a Licensed and Unlicensed Moneylender

There are many differences between licensed and unlicensed moneylenders. Some of the most telling cues are:

  • A licensed moneylender will never keep your documents
  • A licensed moneylender will never ask for your ATM card
  • A licensed moneylender will have a license number, and their business name will be in the Registry

An unlicensed moneylender will do the opposite of these things

Myth #6 – There is No Way to Spot an Unlicensed Moneylender

You can tell if someone is a fake moneylender if they:

  • Send you an SMS, offering you loan – licensed moneylenders do not solicit for customers via SMS
  • Advertise on television – licensed moneylenders can only advertise in business directories and on their place of operation
  • Ask for your SingPass password – that is just wrong
  • Generally, behave in a fishy manner: they are rude, impatient, etc.

Myth #7 – It Is Difficult to Get a Trustworthy Moneylender

There is a Registry, containing the names and license numbers of over 170 licensed money lenders in Singapore. This information is available to the public. When you are looking for a moneylender, you can look them up in the Registry. When you go to their place of business, ask to see their certificate. The certificate will contain the license number. There are many reliable moneylenders in Singapore. You just have to create the time to see them. It is not at all difficult.

Myth #8 – It is Difficult to Select the Best Moneylenders in Singapore

These myths just keep getting better. Finding the best moneylender in Singapore s easy, as long as you know where to look. Check out our moneylender reviews online. Ask people who have had experience with moneylenders. Compare their interest rates. You will know who the best moneylenders are in no time.

Myth #9 – There are Too Many Options to Choose From

This should not be a limitation. This is actually a good thing. It all depends on you and your needs. Compare the services and terms and conditions of a few moneylenders. Look at their interest rates and their fees. Pick the one that works for you, and send in your loan application.

Myth #10 – Actually, There is No Need for a Loan

This is probably the biggest myth of all. Unless you are one of the very few who can live well in Singapore on their salary alone, you need a loan. There are bills to pay, medical care, tuition, groceries, rent, car payments… the list goes on. Once in a while, you may need a loan to settle some of these obligations. It could be a personal loan or a payday loan. It could be from a bank or a moneylender. Your monthly salary won’t be enough sometimes unless you earn hundreds of thousands every month. Getting a loan is actually beneficial. So get one if you must.




Should You Consider Going To A Pawnshop Or Moneylender For Money?

Sometimes, life catches up with you. You wake up one morning with nowhere to turn to for immediate financial assistance. You need instant cash for something totally unexpected. You can’t borrow from family and friends. You can’t go to a bank because the loans there can’t be approved the instant you need them. Luckily, there are other options for you. If you are in dire need of a personal loan or payday loan, you can go to a pawnshop or a moneylender.

If you didn’t know it before, you should know it now. Pawnbrokers are a licensed financial entity in Singapore. The Ministry of Law states that there are over 220 pawnbrokers, licensed, in Singapore today. Pawnbrokers are a good source of instant cash. As long as you have something valuable for them to hold as security, you can get a loan from them.

Moneylending is also a legal option for you to get a personal loan or a payday loan. Moneylenders are typically associated with loan sharks or’ ah longs’. This is not entirely fair or true. There are over 170 licensed and registered moneylenders in Singapore. You can get secured and unsecured loans from them. They also approve and disburse cash loans instantly.

What You Need To Know About Borrowing Money From A Pawnbroker Or A Moneylender

  • Low Interest Rates

There is a lot of competition among pawnshops in Singapore. There are also a lot of licensed pawnbrokers in Singapore. As such, you can get competitive interest rates from them. Some of the most popular pawnshops in Singapore include Value Max and Maxi Cash. You can get loans from as little as 1% interest per month, and sometimes 1.5%.

Moneylenders in Singapore have interest rates that are fixed by the Ministry of Law. No moneylender is to charge interest higher than 4% per month on unsecured loans. So you can find moneylenders who charge even less than that. Plus, the fees they charge you are very little.

  • Giving Your Valuables for Loans

Just as banks require collateral, pawnshops require valuables. Expensive jewellery is the most common thing to use. To get a loan from a pawnbroker, you will have to take, for instance, some earrings with you. The pawnbroker will assess the value of those earrings, and give you a loan based on that value. So, if they evaluate your earrings to be worth S$20,000, that is the loan amount you will get. You have a period of 6 months to repay your loan. This 6-month period resets every time your payment is a partial one. Once you default on payments, the pawnbroker sells your earrings to get their money back.

Something to note about pawnbrokers: if they sell your earrings and get more than you owe them, they will give you the extra cash. For instance, you have an outstanding debt of S$15,000. The pawnbroker sells your earrings for S$20,000. The extra S$5,000 will go to you. Usually, you would get more selling those earrings elsewhere. But that is what happens when you go to a pawnshop for business.

Moneylenders can give you unsecured loans. Unsecured loans are those that you can get without any collateral or exchange of valuables. However, the amount you can borrow is limited by your income. You can only borrow as much as your income allows. So, if you earn S$30,000 a year, you can borrow up to 4 months’ salary. If you earn S$120,000 a year, you can borrow any amount you want. Also, with secured loans, you can borrow any amount you want.

Moneylenders also tailor a repayment plan to fit your ability to pay back the loan. Even if you have a bad credit score, moneylenders are willing to work with you so that you can get a loan. If you default on your loan repayments, the moneylender will take you to court.

  • Loan Approval And Disbursement

Pawnbrokers differ from moneylenders and banks in one major way. They do not require any form of documentation to give you a loan. All they need is an item of value from you, and you get your cash once the value of that item has been ascertained. If you want an instant cash option, pawnbrokers are the place to go.

While moneylenders require some documentation, their loan process is faster than that of banks. You can contact a licensed moneylender via their website, and after a phone call, you can get your cash. Loan approval and disbursement can happen in less than an hour with moneylenders.

Since their activities are strictly monitored by the government, they need to see some documentation. You also need to read their terms and conditions. They need to know that you understand everything before they can give you a loan. Any moneylender who doesn’t do this is most likely a fake moneylender. 

Getting A Loan From Pawnshops

Personal loans are considered to be unsecured loans. As such, banks will give you a personal loan without collateral. Pawnshops must have collateral for every loan you want, regardless of the type of loan. If you have bad credit, or none of the necessary documents to borrow from a bank, then pawnbrokers are your best bet. Just be willing to give up your heirloom necklace, and be certain that you can repay in 6 months to get it back.

Getting a Personal Loan/Payday Loan from Moneylenders

A moneylender will always give a personal loan for an unsecured loan. You can also get a payday loan as an unsecured loan. While the interest rate is fixed at 4% per month, you can compare rates and settle for one that has less. Even if you have bad credit, licensed moneylenders are willing to help you get a loan. They do require documentation, but their loan approval process is faster than banks. In less than two hours you can get your cash and settle your financial problems. Just make sure that you visit a licensed moneylender if you want to get a loan.