What You Should Know About Singapore Loan Sharks

A loan shark, also known as “ah longs” in Singapore or unlicensed moneylenders, is a person or entity that lends money quickly and easily at exorbitant interest rates. These interest rates are usually much higher than any established legal rates. They are notorious for using harassment tactics and threats of violence to force repayment at any time.

Loan sharks can be located in your neighbourhood, online, or even through your personal network. In Singapore alone, there are thousands of them. These “oh longs” are frequently members of organized crime syndicates, and their finances are usually untraceable. Dealing with a loan shark is so prohibited in Singapore.

To help you and your loved ones from becoming victims of these “ah longs,” we’ve put up a list of 7 things you should know about loan sharks in Singapore.

1.Loans are offered through SMS, emails, and flyers.

To harass borrowers and seek new borrowers, loan sharks in Singapore are increasingly using non-confrontational strategies such as phone applications, emails, social media, flyers, cold calls, and text. Some may even go to your workplace to hand out flyers or approach you after work.

Many people have been invited to WhatsApp group chats by overseas cellphone numbers before seeing adverts for money loan firms in Singapore, for example. All of these actions are in violation of advertising regulations. If you find yourself in this circumstance, block the number and report it as spam right away.

One distinction between “ah longs” and licensed moneylenders in Singapore is that the latter can only advertise through business or consumer directories, their own websites, or on their company premises.

Be wary of unlicensed moneylenders, as if you deal with one, your information will be shared with a network of loan sharks in Singapore. This just serves to perpetuate a vicious cycle of borrowing money from other loan sharks to pay off previous loans.

If you want to avoid these loan sharks, you can always research the distinctions between them and licensed moneylenders.

2.Charge a monthly interest rate of more than 4%

Loan sharks prey on distressed borrowers with exorbitant interest rates and hidden fees. Loan sharks usually get their money from unknown sources. They will lend big sums of money in order to profit from high rates of interest in a short period of time. These lenders have the right to demand debt repayment at any moment.

If you’re being given a loan with an interest rate higher than 4% per month, you’re undoubtedly dealing with a loan shark. This is because the maximum interest rate that registered moneylenders in Singapore may lawfully charge is 4% per month, regardless of your income or loan size.

This cap, according to the Ministry of Law Moneylenders’ Act, applies to both nominal interest (loan value) and late interest (late payment each month). In addition, late costs are set at S$60 per month. Know the interest rates you’ll be charged before taking out a loan.

3.Before approving your loan, inquire about the loan processing fee.

If you’re requested to pay a loan processing fee, often called an admin fee before your loan is granted, be cautious. Due to your poor credit, loan sharks in Singapore may try to rationalize it as an obligatory processing fee for all borrowers or even as collateral.

On the other hand, licensed moneylenders only charge a 10% admin fee after the loan is approved, which is subtracted from the primary loan amount. Licensed moneylenders, unlike loan sharks, will never demand payments before accepting your personal loan.

Learn about the important factors to consider before you plan to take out a loan from a licensed moneylender here.

4.Remote Loan Approval

It’s normal to submit applications online now that we live in the digital age. There are legal moneylenders who handle and approve your loan applications digitally, but they must conduct a face-to-face verification and go over the loan terms in person after doing so.

For example, if you apply with a licensed moneylender like 118 Credit, our online platform can process and approve your application in as little as 8 minutes. After that, you’ll have to go to the store for face-to-face verification, loan contract signing, and loan collection.

Unlicensed moneylenders, also known as loan sharks, approve your loan application over email, SMS, or phone call without requiring any documentation. They’ll even deposit your loan directly into your bank account once it’s been approved. There may be no face-to-face meetings during the procedure.

Make sure you don’t fall for this type of quick loan approval and distribution from afar. Licensed moneylenders will require you to visit their registered office to review your loan terms and verify your loan after it has been approved.

5.Loan Sharks in Singapore Won’t Offer a Loan Contract.

If a moneylender in Singapore does not offer you a loan contract, you may be sure they are a loan shark. Even if you are given a loan contract to sign, it could be blank or incomplete. They may also refuse to clarify the terminology to you.

A loan contract is one of the most important aspects of any financial lending agreement. A legal and licensed moneylender takes this step seriously and will help you understand all the contract’s details and terms before signing it. As a loan shark, they may not care about your understanding as long as you sign their contract with no questions asked.

If you’re not confident about the loan contract’s terms and conditions, cancel your application and stop communicating with them right once. Licensed moneylenders in Singapore are required to provide you with a standard loan contract that is easy to understand, specifies your monthly instalments, and states the total amount of interest payable.

6.A Loan Shark will Allow You To Take Out A Loan Without Considering Your Income.

Loan sharks in Singapore typically target persons who are desperate for money and are unable to obtain it through traditional banking channels. They may, for example, have a poor credit rating and hence be ineligible for bank loans. As a result, individuals seek money from a variety of sources, including loan sharks.

Unlicensed moneylenders may appear amicable at first, promising quick cash and loan approval without ever meeting you. But consider this: If they hand you a large sum of money without following legal money lending standards or requesting any supporting documentation such as pay stubs, it’s probably too good to be true!

If you’ve already received a comparable offer, don’t bother applying. Once you take a loan from a loan shark, you will be harassed for repayment. Keep in mind that licensed moneylenders in Singapore are only permitted to lend a particular amount depending on your annual income.

The maximum amount you can lawfully borrow from a moneylender in Singapore is listed in the table below.

Maximum loan amount Maximum loan amount
Annual incomeSingaporeans and PRsForeigners living in Singapore
Below S$10,000S$3,000S$500
Below S$20,000S$3,000S$3,000
At least S$20,0006 times of monthly income6 times of monthly income
Source: Ministry of Law

7.They Can Resort to Other Forms Of Loan Shark Harassment

While they may appear amicable at first, after you borrow money from these loan sharks in Singapore, you may face a variety of threats and harassment. To begin with, these “oh longs” may use scare tactics to collect outstanding loans. These unlicensed lenders may even threaten to harm you if you don’t pay your instalments on time by citing the names of your loved ones and threatening to harm them if you don’t pay.

It is also possible for them to set fire to the flat door, in addition to the typical methods of harassment such as splattering paint with writings on your door such as “O$P$” (owe money pay money), damaging your belongings, and putting chains on your gate.

In Singapore, loan sharks tend to target specific residences, regardless of whether the original debtors still reside there. To halt the harassment, the new tenants had to pay a share of the debt in some situations. Loan sharks in Singapore have employed food delivery services to harass their borrowers even during the recent circuit breakdown.

They would place large orders or many items per day to be delivered to the debtors’ residences, often in the early hours of the morning. They may even order food to be sent to the borrowers’ families. Remember that professional and regulated moneylenders will never employ harassment to collect repayments.

In the end, you will always have other options for receiving quick cash in Singapore without having to deal with loan shark harassment. And, of course, keep these seven things in mind to protect yourself against them.


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