how to solve loan shark problems in singapore

Keep Calm! Here’s How to Solve Loan Shark Problems in Singapore (2022)

Singapore is very focused on addressing the financial difficulties of its citizens, as is evident by the many laws that protect borrowers, its many assistive financial programs, and the code that licensed money lenders have to follow.

This, however, doesn’t stop the existence of loan sharks in Singapore. The dreaded ah long is still a common menace that plagues neighborhoods, and their loan shark activities remain in operation even in the constantly evolving world of moneylending.


What happens when you don’t pay a loan shark?

At first glance, loan sharks will often provide terms that are often too good to be true. The problem is, once you miss a repayment, a loan shark will begin to charge you extremely high interest rates as fees while resorting to abusive language and threatening violent actions.

Dealing with loan shark harassment can be difficult, stressful, and often scary. But don’t worry; we tell you all about how to deal with loan shark harassment in Singapore in this article.


How to deal with loan shark harassment

Sometimes, a loan shark can catch us in surprise. Sometimes an offer is too good to pass up, and often we can feel like we have no other choice, especially with poor credit.

Dealing with a loan shark takes some resilience, so if you fall prey and find yourself in the fangs of loan sharks, here’s what you have to do:

  1. Avoid further payments to the loan shark.
  2. Change information that you gave the loan shark.
  3. Report loan shark harassment to the authorities.


Keep calm; don’t make further payments to the loan shark

Loans are great for instances that you need to make big expenses but can only handle instalments. But taking loans comes with the con of paying extra money in total because of interest rates.

Unlike with a licensed moneylender, dealing with a loan shark can endanger your finances more. Once you become unable to comply with the repayment schedule, loan sharks will tend to hike up to extremely high-interest rates that can put you in a precarious position.

Once you realize your lender is an ah long, the best course of action is to stop making repayments to avoid monthly interest charges.

Another benefit of doing this is to avoid one of the common loan scams done by illegal lenders. Even if payments have been made between both parties’ bank accounts, a loan shark may pretend to not receive payments from you and continue to harass you.


Change any compromised personal information

Licensed moneylenders are not allowed to get and/or retain any personal, sensitive information. Loan sharks will often demand this during a loan application despite its illegality.

If it turns out that you have been in contact with loan sharks, make sure to change any compromised information as soon as you can, especially once you’ve stopped making repayments and avoided contact.

An ah long will use that information to frighten borrowers by pestering their mobile number and social media accounts and may even give them to other loan sharks, who will pester and harass you with loan offers.

It is also recommended to temporarily stay elsewhere so loan sharks cannot confront you directly.


Report loan shark harassment to the authorities

Finally, the most important thing to do to deal with loan shark harassment is to report them to the authorities.

You can contact many organizations, but the foremost two are the police or the National Crime Council’s X Ah-Long hotline.

For further assistance, another organization you can report to is the Registry of Moneylenders through their website for loan sharks and questionable practices of licensed moneylenders. You can trust that your complaints will be taken seriously, and you will even have the option of taking legal action through the Small Claims Tribunal or the Court under the Consumer Protection (Fair Trading) Act.

The Registry might require your attendance for an interview regarding your involvement with a lender, but trust that your identity will be kept anonymous.


  • Police hotline: 1800-255-000 or 999.
  • X Ah-Long: 1800-924-5664.
  • Registry of Moneylenders: 1800-2255-529


Punishments for Loan Sharks in Singapore

There is no lack of condemnation for loan sharks, and the two main offenses attributed to them are punishable by specific laws according to the Moneylenders’ Act.

Assisting loan sharks in any way, like using your bank account to facilitate the unlawful business, can result in fines up to $300,000, four years in prison, and caning of up to six strokes.

Harassment, separate from other laws regarding assault, vandalism, and the like, can result in higher fines and caning and gets progressively worse for corporate bodies.

Hold out and avoid contact with the ah long as much as you can until the authorities deal with the loan sharks.


lady is stress for having loan shark problem


Signs you are dealing with a loan shark

It can be tricky to differentiate licensed moneylenders from unlicensed ones. Loan sharks, in particular, can be devious, and you may not realize that you are dealing with one from the get-go.

Here are a few signs to look out for to know if you are dealing with loan sharks.


  1. Loan sharks advertise through illegal means

Sending solicitations through SMS, calls, or emails signifies that the money lender is a loan shark. This is a common red because loan sharks are commonly out of compliance with legal means of advertising their services.

Licensed moneylenders are required by the Ministry of Law to only advertising through specific channels, such as:

  • the money lender’s website;
  • business and consumer directories (whether in print or online); and
  • advertisements displayed on the outside of the moneylender’s business premises.

Licensed moneylenders are bound by law to use these specific channels; as such, the people who use other methods are likely loan sharks.

Commonly, loan sharks advertise their loans through SMS, emails, and other digital means, but they also post flyers well outside the area of their place of business.


  1. Loan sharks do not have a physical place of business

Licensed moneylenders in Singapore must have a physical location for their company for borrowers to go to for loan verification.

If a lender is evasive about their physical location or wants to approve a loan without in-person verification, it’s a sign that you could be dealing with loan sharks.

In addition, licensed moneylenders tend to have sufficient contact details, specifically a landline number. A good way to root out loan sharks in Singapore is to check if they have a physical place of business and a landline. It’s easy to create an email address, but landlines generally require more detailed records that an illegal lender will not likely have.


  1. Loan sharks impose processing or admin fees to make more profit

Another red flag to be wary of is that loan sharks will often pressure borrowers into paying off pre-loan fees–upfront costs charged before loan approval.

These pre-loan fees are actually illegal, as processing fees cannot be solicited until the loan is approved.

Licensed moneylenders may only charge the following:

  • A late repayment fee not more than $60 for each month
  • An admin fee of no more than 10% of the principal
  • The moneylender will be required to pay court costs if the claim for recovery is successful

In addition, the total amount due on a loan cannot exceed the loan’s principal amount. This includes the interest charged and administrative and late fees.

Loan sharks tend to charge other fees to make an even bigger profit than they would with interest rates, so being asked to pay anything other than the above is a warning sign. Do your due diligence when checking the loan contract, so you can forego further deals if you spot extra fees.


  1. Loan sharks claim to give you a high loan amount

To entice borrowers, loan sharks in Singapore will claim to give you as much money as you need, even if it is well above the limits given by the government.

Whenever you apply for a secured loan, you usually can request an amount you prefer. However, a licensed moneylender usually offers unsecured loans, and because of its nature as a loan without collateral, certain limits are imposed.

Normally, the personal loan amount is capped at 6 times the monthly income of the borrower. Any more than this is illegal.

Furthermore, a loan shark will be very lax when it comes to eligibility and its proportion to the loan principal. A loan approved seems like a stroke of luck, but you might be being tricked.


  1. Loan sharks charge excessive interest rates

Loan sharks will often lie about how low they charge and then raise charges into exorbitant interest rates later during your tenure.

A licensed moneylender cannot charge interest rates that exceed 4% per month. Furthermore, this also holds regardless of how much the borrower’s annual income is.

Be aware of the rates so you can avoid paying more than what is reasonable.


  1. Loan sharks will give you an incomplete loan contract

When getting a loan, you must keep in mind that lenders are obligated to explain the loan contract terms to you in a language that you can understand. You may have a lender explain as many times as necessary until you can understand the terms.

Loan sharks will often present you with a blank contract during a loan application. A blank contract is usually a term sheet that contains blank lines so that a lender can move forward with signing without letting a borrower know the details.

They may try to convince you that the details will follow, but this is a sign to avoid further deals.


  1. Loan sharks will keep your information

Your personal data, like your personal IDs and your SingPass credentials, are protected by confidentiality laws that vary by jurisdiction.

This also prevents a licensed moneylender from retaining your personal ID and NRIC card. If a lender attempts to keep your information for their records, it’s a red flag.

In addition, a lender may also be barred from retaining and/or asking for your bank account details, ATM card, passport, driver’s license, etc.



  1. What other financial institutions can lend money to me?

The best way to avoid loan sharks in Singapore is to instead borrow money from registered, licensed moneylenders. You can find a list of licensed moneylenders recognized by the Ministry of Law here.

In addition, don’t give up on government-assisted programs and banks right away. There may be options with better terms and eligibility requirements.


  1. How can I deal with my existing debts?

Contact Social Service Agencies Like Credit Counselling Singapore

The government has assistive programs and social service organizations to provide credit counselling and debt consolidation loan plans for those struggling with debt.

One such Credit Counselling Singapore, a non-profit that offers weekly online seminars on debt management and personal credit counselling.

Get a Debt Consolidation Loan

A debt consolidation loan is financing you get to pay off other debts. The purpose of debt consolidation is to merge multi debts into a single one, with better repayment terms and/or lower rates.


  1. What are the things I have to consider before getting a loan?

  • The preventive way to deal with loan shark predicaments is to go the route of legal moneylending. Not only will they not cheat you, but they will also assist you when you have difficulties with repayment.
  • Consider your ability to make repayments before you think about getting a loan. Being unable to settle debts will ruin your credit score and put you in deeper financial trouble. Carefully calculate your income and consider other expenses and obligations.
  • You are legally obligated to fulfill the loan contract that you enter with a licensed moneylender, which means a lender can take action if you cannot pay. In addition, this also means you can take legal action against an illegal lender, and you are not legally bound to make payments to them.
  • Do your due diligence and review the contract as best you can. Lenders may be obligated to make sure you understand. Still, you have a responsibility to your own pocket to familiarise yourself with the terms and details to root out hidden charges and avoid being bamboozled by anything in the fine print.
  • Don’t be afraid to look at financing options before making a decision. You will be doing yourself a disservice if you agree to the first loan that appears before you. Make sure to shop around and find the terms most agreeable to your situation.


The Bottom Line

Make sure to be wary of the many signs that suggest illegal activities with your lender, and then make sure to hold out as best you can.

It may be difficult to ignore violent threats, harmful language, and other offenses, but trust the system and make sure to don’t give in. Keep radio silence until the matter is dealt with to ensure that you are rid of loan shark harassment.

If you are in want of a loan that can properly address your financial situation and is provided by a respectable lender, consider getting the services of Instant Loan.

Instant Loan is a loan comparison service that assesses your financial needs and provides you with a list of appropriate loan options from the top licensed money lenders in Singapore.


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