The Singapore government is doing all it can to deal with loan sharks in the moneylending industry. However, that doesn’t mean that loan sharks don’t exist.
If you’re not careful, you may end up borrowing from a loan shark or “Ah Long” claiming to be a licensed money lender.
Loan sharks can put you through hell with their extremely high interest rates. They may even threaten or harass you or your loved ones.
That is why it is essential to understand how to run away from loan shark in Singapore.
Keep reading this article to know if you’re dealing with a loan shark, how to deal with harassment from these scammers, where to get help, and more.
How To Know If You Are Dealing With A Loan Shark
In Sep 2020, approximately 300 people were arrested for loan shark activities in Singapore. This indicates that these scammers are still trying to deceive innocent borrowers.
Here are a few ways to tell that you are dealing with a loan shark in Singapore:
Loan Sharks Advertise Via Flyers, SMS, And Emails
Have you received a text message, call or email from a “money lender” to tell you about its loans? You could be dealing with a loan scammer.
According to the Ministry of Law in Singapore, licensed money lenders can only advertise on business directories, consumer directories, or official websites. They can also place an advert inside or outside their business premises.
So be alert when a lender sends you a WhatsApp message that asks you to apply for a quick personal loan.
Loan Sharks Ask For Processing Loan Fees Before Approving Your Loan
If a lender asks you for a loan processing fee or an admin fee before it approves your loan, this is a red flag that you are dealing with an “Ah Long”.
Licensed money lenders in Singapore will never ask you to pay any amount before you receive your loan. Instead, they only charge an admin fee of up to 10%.
This is payable once the loan is granted and deducted from the principal amount you will receive.
Loan Sharks Charge Extremely High Interest Rates
When you get a loan from a scammer, it will aim to earn as much as it can from you by charging exorbitant interest rates.
Within a short time, you will realise that you have paid more than you borrowed.
However, this is not the case with licensed money lenders. The Ministry of Law allows them to charge no more than a 4% interest rate per month, regardless of your monthly income or the amount you borrow.
Besides, no interest should be charged on the amount yet to be paid.
Loan Sharks Lend You Any Amount
Another sure way of knowing you are dealing with a loan shark in Singapore is the amount it is willing to lend.
If it allows you to take out any amount without looking into your income, there is a high chance you could be dealing with a scammer.
This is because legal money lenders have a limit on the amount for unsecured loans they can lend, as follows:
|Singapore Citizens And Permanent Residents
|Foreigners Living In Singapore
|Less than $10,000
|At least $10,000 and less than $20,000
|At least $20,000
|6x their monthly salary
|6x their monthly salary
Loan Sharks Don’t Provide A Loan Contract
When a lender doesn’t offer you a loan contract to sign, you can be sure you are dealing with a loan shark. Also, be alert if they give you a blank or incomplete contract.
Before you sign a loan contract, a lender should explain all the terms and conditions in a language you can understand.
Therefore, if a lender calls you and approves your loan without giving details of what you need to fulfil, be careful. You can use the loan shark helpline in Singapore to report it.
What Happens When You Don’t Pay A Loan Shark
Anyone can fall into the trap of a loan shark. This is because, in this digital era, most people trust online transactions.
If you find yourself swimming with a loan shark and cannot settle the debt, you may experience:
Harassment And Threats
When a loan shark wants to lend to you, it can promise you anything. However, things go south quickly when you cannot repay the debts.
Such scammers will start to harass you via SMS or WhatsApp. They may even threaten to kidnap your children or tell your boss about the debt you owe them.
Harm You Or Your Loved One
Be alert when you know you are dealing with a loan shark. When you do not pay on time, a loan shark can harm you or those around you.
This form of harassment is not allowed in Singapore. No one should cause any physical injury to you or your family members.
Vandalise Your Property
“Ah Longs” may also resort to damaging your property. They may write or paint insults on your home to show that you have not paid them.
How To Deal With Loan Shark Harassment In Singapore
In this digital era, loan shark harassment has increased because these scammers can easily reach you. They can find you on social media, call you, or text you.
Therefore, you need to know how to run away from loan shark.
To avoid or deal with a loan scammer, do the following:
Check If It Has A Licence From The Ministry Of Law
Before doing any business with a lender, review the list of licensed money lenders in Singapore on the Ministry of Law’s official website. If its name appears in the list, well and good.
But remember, loan sharks can create fake websites to trick you. They can also claim that they are new to the industry, which is why the Ministry of Law hasn’t listed them (not true because the Ministry has stopped issuing moneylending licenses).
Therefore, you should do further checks before you borrow from a lender. Confirm that it has a physical address where you will meet to sign the loan contract.
Also, any legal lender should not withhold personal documents such as your NRIC, driving licence, or passport.
Report The Loan Shark To The Police Or Authorities
If you realise you are dealing with an “Ah Longs”, don’t hesitate to inform the police. If you also doubt your licensed lender, report it to the authorities.
You can call the loan shark Singapore hotline (1800-924-5664) or submit an e-complaint. If you are experiencing licensed money lender harassment, you can report the lender to the Registry of Moneylenders at 1800-2255-529.
You can make a report when:
- You or your loved ones are harassed, threatened, or injured
- You get illegal ads such as texts or flyers
- You didn’t get a loan contract, or it was incomplete
- Your lender asks for higher fees
- Your lender vandalises your property
Loan sharks in Singapore are masters of harassment. They can manipulate you to an extent you don’t have peace of mind. That is why you need tips on how to run away from loan shark.
When dealing with these scammers, it can be hard to keep cool, but the best way out is to remain calm.
They will start to threaten you, and in such a situation, you may lose your temper and hurl insults at them.
However, don’t submit to their threats. Instead, report them because they are going against the law.
Don’t Repay A Loan Shark
Once you realise that you are dealing with a loan shark in Singapore and have reported it, the best action is to stop repaying the loan.
You can do so because a loan scammer doesn’t have the right to lend money or receive payments. This will save you from the high monthly interest charges.
Besides, these lenders are cunning – sometimes, they may pretend not to have received your payments even if you sent them and continue to harass you.
Apart from taking the above actions, you could be wondering how else to solve your loan shark problems in Singapore.
Where To Get Help
You can get assistance from social service agencies if you have financial difficulties. These organisations help with financial counselling and other financial services.
- Credit Counselling Singapore: 6225 52227
- Adullam Life Counselling: 6659 7844
- One Hope Centre: 6547 1011
- Blessed Grace Social Services: 8428 6377
- MSF ComCare: 1800 222 0000
Punishment For Loan Sharks In Singapore
Loan sharks are highly condemned in Singapore as they commit two offences that are punishable by the law according to the Moneylenders Act.
Firstly, if you assist a loan scammer in any way, such as using your bank account for unlawful transactions, you go against the law.
Therefore, is it an offence to borrow from a loan shark? Yes it is, because you can use your bank account to receive the loan.
If found guilty, you can be fined up to $300,000, face four years’ imprisonment, or be caned up to six strokes.
Secondly, any form of harassment such as vandalism can result in higher fines and caning. The penalty is harsher if the criminal is a corporate body.
Never Borrow From A Loan Shark In Singapore
Loan sharks are among us, and you can be a victim, especially when you need money urgently. Therefore, you must know how to run away from loan shark.
However, you can’t do so unless you know the signs of a loan shark.
So be careful if a lender contacts you via a phone call, SMS, or email, or gives you a flyer. Also, don’t fall into the trap of a lender not giving you a loan contract or someone imposing higher interest rates than the ones outlined by the Ministry of Law.
To avoid becoming a victim, check if a lender is on the Ministry of Law’s list of licensed money lenders. Also, if it harasses you, report it and stop repaying your loan immediately.
If you are looking for a licensed money lender in Singapore to offer you a loan, Credit 21 is here to help.