Loan sharks are prevalent in Singapore.
They are known for harassing borrowers, threatening them and making their lives difficult.
Recently, loan sharks are even known to engage in creative harassment methods! They used Grab Food delivery services to harass their borrowers.
Although loan sharks are a huge problem, Singapore’s government has enlisted various measures to help you. Remember that Ah Longs are dangerous. They target people of all socio-economic backgrounds through well-honed tactics.
You’re never genuinely free of your loan shark as long as you keep dealing with them. These people are violent and manipulative. They won’t let you off the hook even if you’re paying them back. Their methods include threats, vandalising, and more.
Do You Need Money Urgently? Loan Sharks Are Not Your Only Option
If you need to borrow money quickly, loan sharks are not your only option.
Licensed moneylenders in Singapore such as Credit 21 are also able to provide you with a personal loan within hours. The process is fast and smooth, and best of all, it is legal. You can easily apply for a loan within minutes here.
How Do I Know If I’m Dealing With A Loan Shark In Singapore?
Getting involved with Ah Long is a huge mistake. It puts your life in danger, your family’s lives in danger and it escalates your money problems.
Keep reading to find out the tell-tale signs.
1. Loan Sharks Use Unlawful Advertising Channels
Ah Longs advertise their “businesses” on various prohibited channels, such as:
- Your social media accounts
- E-mails
- Texts
- Outdoor advertising (e.g., flyers, posters)
- Phone calls
Singapore’s MinLaw allows its authorised moneylenders to advertise their services only on the following platforms:
- Business and consumer directories
- Their official website and social media accounts
- On their company’s premises (e.g., walls, doors, windows)
2. Loan Sharks Offer You Access To Vast Amounts
Banks and legal moneylenders in Singapore consider each loan application carefully. Although banks have a more intricate paperwork process, licensed moneylenders follow strict rules too.
Licensed moneylenders are legitimate businesses and if you have questions regarding loans, you can read more about them here.
These rules include assessing your credit score and income as follows:
| Annual Earnings | Singapore Citizens and Permanent Residents | Foreigners |
|---|---|---|
| < $10,000 | $3,000 | $500 |
| Between $10,000 and $20,000 | $3,000 | $3,000 |
| > $20,000 | 6x your monthly salary | 6x your monthly salary |
If you have a low credit rating and income, this process can seem unfair. Nonetheless, if you have been rejected by banks, you can consider borrowing from other financial institutions. There are alternatives to getting the money you need.
3. Loan Sharks Practice Illegally High-Interest Rates
Remember that Ah Longs are only interested in making more profits as fast as possible. As a result, they practice colossal interest rates.
They will also:
- Fail to draft and follow a strict reimbursement calendar
- Demand full repayment or higher instalments without motive
- Increase interest rates without warning
- Ask for huge fees in case of missed payments
Remember: The maximum allowed interest rate per month is 4%, according to the Ministry of Law. Authorised lenders are likewise restricted to the following charges:
- Maximum $60/ month if you’re late paying your instalments
- Maximum 10% of your initial loan when you sign the paperwork
- Price for legal proceedings decided by a judge if you’re being sued for loan defaulting
When you add these sums, the result must be below your loan amount.
4. Loan Sharks Trick You With Pre-Loan Fees
To make things clear, borrowers will never have to pay any fees before they receive their loan.
If they have to pay any lo
Ah Longs know which buttons to push. For example, if you need a quick loan, they’ll ask for some cash to expedite their approval process. If you want a more considerable sum, they’ll ask you to pay an advance.
These fees can seem value-for-money at first, but they’re illegal.
Licensed moneylenders don’t ask for these pre-loan fees. They can only demand the 10% admin fee, but only after they’ve lent you the cash.
5. Loan Sharks’ Contracts Are Shady
If you’re like most people, you’re not familiar with legal jargon. However, it’s relatively easy to recognise an incomplete contract:
- It doesn’t include both parties’ rights and obligations
- Both parties did not sign it
- It doesn’t feature precise terms, such as your interest, tenure, and instalments
- It leaves room for hidden fees
- It doesn’t outline all possible steps in case one party refuses to comply with the terms above
- Your agent refuses to explain this contract in detail
Loan sharks may also:
- Refuse to draft a contract at all
- Asks you to sign a blank file which they promise to fill in later
- Demand your ID or passwords as collateral
- Claim to lend you the money without due diligence (e.g., checking your paperwork and ID at their official place of business)
- Withhold your copy of the loan contract
6. Loan Sharks Are Violent
Loan sharks always come up with innovative harassment and violent tactics. By contrast, authorised licensed moneylenders will stay professional in all circumstances, even if you break the contract’s terms.
Ah Long use some of the following techniques:
- Threaten your life
- Threaten to harm your family members and close ones
- Call and text incessantly
- Contact your family, co-workers, and boss
- Loom nearby your place of work and home
- Vandalise your car, home, and other property
- Send multiple delivery people to your door
- Assault you
How To Handle Loan Shark Harassment In Singapore
The signs above will help you recognise an unauthorised moneylender or one who’s using illegal methods. Here’s what to do in this situation:
1. Check MinLaw’s List Of Licensed Moneylenders
The government of Singapore wants to prevent illegal moneylending crimes. That’s why MinLaw publishes a complete and updated list of licensed moneylenders on its website here.
Remember: A moneylender’s website may seem legit even if it’s not. Anyone can create a website these days.
Before applying with them, check the link above.
Here’s how Ah Long may trick you even if you check the list:
- They’ll claim MinLaw’s database is incomplete.
- They say they’re new and, therefore, they’re not yet in the system.
- They’ll claim to use a different trade name.
- They’ll send a counterfeit link to another list of moneylenders.
2. Call The Authorities
We understand that calling the authorities is easier said than done when you’re in too deep with illegal moneylenders. However, you should break the circle now before it’s too late.
Here are some numbers and links where you can file your complaint:
| Contact Number | Organisation |
|---|---|
| 999 | The police |
| 1800-255-0000 | Police hotline for crime-related info |
| 1800-924-5664 | X-Ah Long hotline |
| 1800-2255-529 | Registry of Moneylenders |
| https://www.police.gov.sg/I-Witness | Filling an online complaint to the police |
Here’s when you should contact the authorities:
- A moneylender is using illegal advertising tactics.
- You’re being charged pre-loan costs.
- You’re forced to sign a blank contract.
- You didn’t receive a copy of your contract.
- Your ID or passwords have been confiscated.
- You’re being harassed, followed, or threatened.
- The moneylender is threatening you alone or in groups of more than five individuals.
- You’ve been injured.
- Your property has been vandalised or confiscated.
Apart from contacting the authorities, you should also quickly block your loan shark’s number, e-mail, or social media accounts.
Remember: Ah Longs have an extended network. Once you give them your phone number or e-mail, they’ll share this info with other loan sharks. If you can’t repay your debt, these other loan sharks will contact you with tempting loan offers.
Therefore, you’ll get more cash from other illegal moneylenders to repay your first loan.
3. Don’t Give In To Harassment
We understand that the instinctual response to harassment is to give in before it escalates to something worse. However, panic can get a hold of you, and you may not assess rationally what is worse.
In this case, it’s good to know that giving in to loan sharks’ harassment is more dangerous than standing up to them.
Here’s an example: Letting an Ah Long use your credit card or threatening other debtors on their behalf isn’t just morally wrong. These activities are illegal. Your sentence can include gaol, fines, and strokes of the cane.
Remember: Once you call the police, you’ll finally get rid of your loan shark.
4. Stop Reimbursing The Loan Shark
Many Singaporeans who get involved with loan sharks believe they should continue their payments.
For example, Ah Long may threaten to sue you if you stop reimbursing them. However, they don’t have the legal background to demand payment, considering their entire business is outlawed.
Conversely, you might be afraid to stop paying the loan shark, especially after you’ve called the police. Keep in mind that the authorities will protect you, though.
Pro tip: Change your phone number and e-mail address to prevent the loan shark from contacting you. Alert your loved ones to be careful too.
5. Contact Social Service For Extra Help
Calling the police on someone who’s threatening you may seem too dangerous. You may also have snowballing debt problems to handle. If you need more assistance, Singapore has excellent counselling and social services agencies that you can contact:
| Agency | Phone number |
|---|---|
| Credit Counselling Singapore | 6225 5227 |
| MSF ComCare | 1800 222 0000 |
| Association of Muslim Professionals | 6416 3960 |
| Adullam Life Counselling | 6659 7844 |
| Arise2Care Community Services | 6909 0628 |
| Blessed Grace Social Services | 8428 6377 |
| One Hope Centre | 6547 1011 |
| Silver Lining Community Services | 6749 0400 |
Where Can I Get Help For My Debt?
You should find effective solutions against accumulating debt and financial emergencies. Otherwise, they’ll snowball into larger problems. If you don’t know where to start, consider these options:
Debt Consolidation Loan
It gets really tough when there are too many loans to repay. Sometimes, you might miss a repayment and end up accumulating more interest.
How about combining all of these loans into one?
A debt consolidation loan helps to combine all of your existing into one, while lowering your overall interest charged. The result is reimbursing your debt more comfortably, with more affordable instalments.
If you are planning on getting a debt consolidation loan, you can find out more about them here. This is a reliable financial institution that has helped numerous borrowers over the years.
Credit Counselling
Credit counselling helps you deal with money management issues that have caused your financial crisis.
Agencies like Credit Counselling Singapore will help you with customised budgets and plans to get out of financial distress. They’ll also negotiate debt consolidation, debt restructuring, and bankruptcy alternatives.
Even when your debts have snowballed, there is always help available. You can seek help from credit counselling centres or from financial institutions that have enough resources to support you.
