Businessman giving money how to detect illegal money lenders in Singapore

If there’s a group of people widely feared in Singapore, they are the ah longs. Unlicensed money lenders or loan sharks continue to plague Singapore and its residents. Their aggressive tactics disrupt the lives of their borrowers and even entire neighbourhoods. They are usually members of crime syndicates waiting for their next target.

Although licensed moneylenders in Singapore are reliable sources of loans, loan sharks continue to hound desperate individuals. They have expanded their illegal activities in the digital landscape. Furthermore, they do their best to make you believe that they are legal money lenders.

Here Are 10 Red Flags to Learn If You’re Dealing With a Loan Shark:

  1. They advertise or solicit loan application through call or text

Nowadays, loan sharks have modernized their efforts by engaging potential borrowers via SMS, call, or Whatsapp. Although other businesses may reach you through these modes and other social media, licensed money lenders in Singapore are not allowed to do so.

Under the advertising rules of the Registry of Moneylenders, licensed moneylenders may only advertise through the following channels:

  • Business or consumer directories in print or online media
  • Internet websites belonging to the money lender
  • Advertisements placed within or on the exterior of the money lender’s approved place of business

If you encounter even a licensed money lender offering loans through means other than the above, report them to the Registry of Moneylenders.

  1. Approve your application online

Borrowers are fortunate that money lenders in Singapore offer information about their loan services through their respective websites. Therefore, some may be confused about whether they are dealing with a loan shark when legal ones are also online. However, legitimate money lenders will never approve your application through the phone or email.

A licensed money lender still follows proper procedure and processes your documents before deciding to grant you a loan or not. Under current regulations, money lenders must meet you face-to-face before they give your loan.

  1. Ask for your SingPass credentials

A money lender asking for your SingPass credentials is a big no. Legitimate money lenders will process your Singpass only through government-authorized means.

  1. No physical office

Licensed moneylenders are legally required to have a place of business in Singapore. In fact, you must visit their office for face-to-face verification. It would be best to ask your moneylender for its address and stop any interaction if they refuse to do so.

  1. Retain your NRIC card or any other personal ID documents

A licensed moneylender will never keep your NRIC card or any official documents, which loan sharks use to gain leverage on you. If you fail to repay, money lenders will recover any amount due through legal means.

  1. Charge higher than 4% interest rate per month

A loan shark may loan you a large sum of money quickly but will cripple you further financially and psychologically with their outrageous interest rates.

Under the Rules of the Ministry of Law, money lenders in Singapore can only charge you a maximum interest rate of 4% monthly. If you fail to pay your loan on time, your moneylender can only impose a maximum of 4% interest rate as well for each month the loan is repaid late.

  1. Ask for a loan processing fee before approving your application

Loan sharks are notorious for imposing fees, on top of already high interest rates, before they even process your application.

The only fees that money lenders in Singapore may impose are the following:

  • An administrative fee not exceeding 10% of the principal, deducted only after extending the loan.
  • A fee not exceeding $60 for each month of late repayment
  • Legal costs ordered by a court for a successful claim for the recovery of the loan
  1. Don’t discuss terms of the loan and no loan contract

Loan sharks don’t normally discuss their terms precisely to trap you eventually in a vicious cycle of large debt and even larger interests.

Before granting loans, money lenders must:

  • Explain the loan contract’s terms and conditions in a language you understand
  • Provide your own copy of the loan contract
  • Give a separate cautionary statement in writing
  1. Grant a loan without assessing your ability to pay

Loan sharks take advantage of your desperation by hastily granting a loan right off the bat.

Although licensed moneylenders have more relaxed rules than banks, they still examine your credit-worthiness through information and documents they require from you.

  1. Use abusive language, or behave in a threatening manner towards you.

Perhaps the reddest flag is when your moneylender starts employing abuse or violence.

Loan sharks are notorious for their harassment tactics such as stalking delinquent borrowers and their families, damaging properties, and disturbing entire neighborhoods. There have also been reports of these unlicensed moneylenders sending threats through Whatsapp and SMS. Contact law enforcement to ensure your safety!

How to Report Unlawful Lending

If you know of unlicensed moneylenders or even licensed money lenders who commit these red flags, lodge an online complaint with the Registry of Moneylenders or call them at 1800-CALL-LAW (1800-2255-529). You will protect not only yourself but other potential targets from suffering at their hands.

How to Deal With Loan Sharks

The best way to deal with loan sharks is not to engage them in the first place. The best way to determine whether you’re dealing with a licensed money lender is to check the list provided by the Ministry of Law.

If you suspect that you’re dealing with one, call the police at 999 or their X-Ah Long hotline at 1800-924-5664. You may also report loan sharks to the Registry of Moneylenders.

Lastly, you can reach out to several social welfare organizations for credit counseling or loan shark issues.


In these troubling times, whether in Singapore or internationally, it is common for many to run short of money and fail to meet their financial obligations. However, it is best to turn to legitimate institutions rather than illegal moneylenders to solve your problems and not create more.

Luckily, you won’t run out of legal and ethical money lenders in Singapore. Raffles Credit is one of the most reputable licensed money lender, licensed by the Ministry of Law, where your needs are above ours. Our clients have consistently praised us for our outstanding customer service and financial knowledge.

With us, you won’t need to fear for yourself or your loved ones. We go above and beyond to address your financial needs by giving the right loan for you. If you have any questions, our friendly team is more than willing to answer them.