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How to Spot Illegal Money Lending in Singapore

At some point in your life, you will need to borrow money to solve inevitable financial difficulties. When this unforeseen situation arises, you may consider applying for a loan. You might need to borrow money for buying a house, taking an education loan, or for a medical emergency.

In any case, there is a high possibility that you might fall prey to a loan shark. It may lead to making your situation even worse. Many people do fall into the trap of such unlicensed money lending companies. Hence, in this article, you will find all information about unlicensed moneylending in Singapore and how to handle the situation if you fall into such a trap.

Illegal Moneylender – How Do They Operate?

The illegal money lender in Singapore is known as loan Shark. If you lend up taking money from any loan sharks, they can harass you once you borrow the money. They always work to find an easy target.

These illegal money lenders would like to provide you with a loan as soon as possible and avoid any required documentation. They would also not want any physical meeting in the office and try to make sure that they don’t do any necessary documentation.

Loan sharks will push you to share your SingPass through text message or on call. Everyone should make sure that the details are shared only through official services, channels, or methods.

A loan shark will want to make the process quick, so he would make an effort to skip steps and provide you with a loan as soon as possible. They would agree to your needs and instantly agree to give you a loan without even going through your document. On the other hand, any licensed moneylenders will guide you through the whole process and explain the loans’ norm.

The standard process of applying for a loan is a multiple-step process that includes registration, filling in the necessary documents, etc. If you feel that any of these steps are not followed when you have applied for a loan, you need to be alert. Any offer that is too good to be true can cause many problems for you in the future.

You need to be more alert if they start showing the following behavior while applying for the loan or once the loan is approved:

  • They start getting aggressive and threatening. A legal money lending company will never do this as it is an illegal process.
  • They start abusing you with foul and demeaning language.
  • Loan sharks provide you with loans with attractive schemes or alluring interest rates- Law in Singapore allows a company to offer only up to 4% of interest rate per month. Illegal money lending typically consists of extremely high-interest rates.

These are signs that you are lending money from a loan shark. Always protect yourself from such kinds of illegal money lenders. Singapore has many of them, and they will find a way to pressurize you to settle your debts.

How to Identify a Legitimate Moneylender?

A licensed moneylender (LML) in Singapore must have an office that matches with the address registered by them at the Ministry of Law website. A loan shark will not have any office, or it will not match the address that is on the official website. They do copy the name of licensed moneylenders to make sure that people believe them. Loan sharks do not follow any law, and hence they will avoid any physical meet-ups with you.

Also, it is a rule that a legitimate money lender will never contact you via SMS, flyers, or any other kind of telemarketing. It is illegal to do these things as per the law in Singapore. Only a loan shark in Singapore will contact you via phone, texts, or calls because of the fear of not being caught. Check out where are licensed money lenders allowed to advertise in Singapore to learn more.

Hands of man holding coins

How Do Illegal Moneylender Trick Us?

Loan sharks try to make sure that their business looks legal to the customer. Hence, they make sure to copy all the details from a licensed moneylenders website and then deal with a customer, in the same way, to look legitimate.

Illegal money lenders would also use an official Email address and make a copy of legitimate messages to look genuine. They would give you regular calls, and you would see attractive advertisements from them. So, it is necessary to make sure that you do not believe what you see.

Real-life Loan Shark Cases

There are a lot of people who did become the victim of loan sharks. Here are a few real-life cases that made it to the news after a complaint was made of taking loans from such companies. These are just a few cases many people have been so afraid of the humiliation that they are even scared of filing a complaint against such loan sharks.

Singapore Police got information in April 2019 about a case in a residential area about loan sharks. They sprayed painted the entire unit and took a bicycle lock to seal the unit and a debtor note. An inquiry took place, and the photographs from a surveillance camera helped to arrest the accused person running to this illegal money lending business.

In another case, in November 2019, a man from Singapore told about his experience of borrowing a loan shark for thousands of Singapore dollars. He could not pay a loan shark of $13,000, and because the interest rate increased rapidly, he found himself in debt within a week.

He and his whole family went into trauma by the incident as the loan sharks keep coming to their door. They start harassing the borrower to the extent that people are even scared to go out in public places.

Man in stress

If You’re Trapped by Loan Sharks, What Can You Do?

Though it is impossible to recover any money that you have lost in the past to a Singapore loan shark, you can avoid making any further payments and making sure you are safe by informing the law enforcers.

Here is a list of things you can do if you are a victim of an unlicensed moneylender in Singapore.

1. Notify Law Enforcement

If you get the slightest doubt about the company that gave you the loan, talk to the local law enforcement about it even if a loan shark has made the smallest change to the terms, interest rates and has started harassing you physically or online. Some loan shark would also post your photo or on social media. They would even begin to get abusive and would do anything to make you feel humiliated.

In Singapore, it is illegal to post personal information online as it causes a risk to a person. Those people found doing so can be penalized by the law, whereas they would have to pay $5000 to $50000 or jail for up to 5 years. So, when a loan shark shares your information on social media or any other platform, he is doing it illegally.

2. Contact the Monetary Authority of Singapore

There are chances that the loan sharks are trying to legalize their name or try doing it in the future. Reporting them to Singapore’s monetary authority ensures that such companies or people can not have themselves legalized.

The MAS would also further make an effort to find out the person behind this loan shark scam and take necessary actions like shutting the illegal transactions of these moneylenders.

3. Change Any Personal Information You’ve Shared With the Unscrupulous Companies

Change any online passwords or information you have shared with them to safeguard yourself from any further damage. If you have shared a SingPass password with any of the loan sharks, then report it to the relevant authorities and request them to give you permission to change the password or transfer your existing account to a new one.

If you are someone who would easily fall into such a loan sharks’ trap, then it can prove to be very dangerous for you. Avoid applying for loans and find an alternative solution to lend money. Singapore has a lot of other options where you can apply for loans and take it.

You can also try speaking to someone you know who can help you financially or suggest a trusted money lending company. Even after getting suggestions, you can move forward by doing a lot of research. Remember to double-check the document before doing any signature.

There are also some quick loans available in the market. If you are looking to apply for fast cash loans, you can lend money from Singapore’s top licensed money lender using the Instant Loan online facility. There are some best loan offers available with them, and the process is quick. A loan can be provided to you within 30 minutes. This money will be transferred to your account in a day or two.


Remember, while applying for such loans, do not forget to check the details and verify that it is not a loan shark. Singapore loan providers who are legal would ensure that they follow all the documentation process no matter what kind of loan it is.

Checking of credibility and legitimacy is now easier through Instant Loan. Instant Loan is a finance directory website that helps you get the best loan deals in the market by scouring the best licensed moneylender in all of Singapore.

The money lenders would also explain to you the clauses that you need them to explain and would also provide you with a copy of the contract for your reference when you borrow money from them.

Just being a little more alert while applying for any loan can help you save from loan sharks. If you are already a victim of loan sharks, taking the necessary steps as mentioned above can protect you and others from any further victimization.

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