At one point or another, you may find yourself in need of a source of emergency funds in case financial issues arise. But the thing is, taking out a bank loan is not that easy or convenient, considering all the hurdles you need to go through with the paperwork, waiting period, and the anxiety of not knowing whether you will be approved for a loan or not.

This is why many people think about going straight to moneylenders to apply for a personal loan since they offer a faster and more seamless way of borrowing the amount you need. Unfortunately, illegal money lenders in Singapore are present and this is making moneylending much more complicated.

With the presence of loan shark or ah long, it is essential that you know the difference between Licensed MoneyLender Vs. Loanshark in Singapore. By knowing how the two are different, you will uncover what is ah long and how licensed moneylender works.

Moneylenders in Singapore – Qualities to Look For

There’s no doubt that licensed money lenders can save you from so much stress and burden if you find yourself worried about your finances. They make the entire moneylending process simple for you, which is why they are usually the best option for those who are unsure about getting approval from a bank.

However, you need to be aware of the fact that there’s such a thing as “loansharks” or illegal lenders who charge a very high rate to borrowers just because they are desperate for a loan. What they do is perform unorthodox business practices and require massive fees and interest rates about 40 percent or higher. They may also intimidate and threaten borrowers during the loan application and repayment process, and these actions can add to the stress and concern of borrowers.

Since the last thing you want to deal with when you’re worried about your finances is to fall into the trap of a loanshark, it makes perfect sense to check out these tips on how to determine whether the money lender is legal and trustworthy or not.

1. Transparency in Presenting the Terms of the Loan Contract

Transparency in Presenting the Terms of the Loan ContractIt is a major responsibility of the money lender to present the terms and conditions of the loan contract in a language that can be understood by the borrower. In Singapore, the law requires all licensed money lenders to be transparent with borrowers when it comes to providing all pieces of information encompassing the loan terms. Moreover, if there are questions regarding the contract, money lenders should be able to answer these thoroughly. Among the common items to be discussed include the interest rate, repayment period, and your payment method options.

With all these in mind, you need to be observant when you come across a money lender who does not even address any of your question about your loan. Dealing with a money lender who fails to explain the loan terms in a language and manner that you can understand only means that you have been victimised by a loan shark.

2. Your Loaned Amount Depends on Your Income

Loaned Amount Depends on Your IncomeLicensed money lenders comply with the Singapore law involving the maximum loan amount as dictated by the borrower’s annual income. In 2016, the following rates are followed:

For Singaporean Citizens and Permanent Residents:

  • Up to $3000 for annual income under $20,000
  • 6 times monthly income with at least $20,000 annual income

For Foreigners Residing in Singapore:

  • Up to $500 for annual income under $10,000
  • Up to $3,000 for annual income at least $10,000 and less than $20,000
  • 6 times monthly income with an annual income of at least $20,000

(You can refer to this FAQs about Borrowing from Licensed Moneylenders.)

If you happen to come across a money lender who claims to give you a significantly higher amount that’s over the usual loan granted by money lenders for your income bracket, then there’s a very high chance that the lender is a loan shark.

3. Proving One’s Legitimacy with a Contract

Legitimacy with a ContractLicensed moneylenders are aware that an agreement is only legal and binding once there is a contract signed by concerned parties. This is why you should be handed a contract prepared by a lawyer, which contains these details:

  • Interest Rate
  • Repayment Period
  • Late Payment Fees
  • Repayment Options

Be wary of those who send you a loaned money even without presenting you with a contract. The same holds true with people who tell borrowers to sign an incomplete or blank contract. These are classic examples of what a loan shark is.

4. Reasonable Interest Rates Charged by Licensed Moneylenders

Finding the Best Money Lenders in Singapore

It is crucial to know that in Singapore, there are specific guidelines when it comes to the maximum interest rates that a money lender can charge to borrowers. Starting on the 1st of October 2015, money lenders were required to adhere to the 4 percent per month interest rate to be settled by borrowers on top of the principal amount. This is why if you want to make sure that you are dealing with a trustworthy and legitimate money lender in Singapore, then you should check the interest rates and fees stipulated in the contract.

Loansharks or illegal lenders do not hold back when it comes to demanding over 4 percent interest rates from their customers. In fact, they may charge over 40 percent, which is completely unheard-of with licensed moneylenders. If you think that the rate is way beyond the maximum interest rate as stated in the Singapore law, then, it’s time to think twice because you’re obviously working with a loanshark at this point.

5. Three Types of Loan Fees Acceptable

Based on the Singapore law on moneylending, there are 3 different types of fees charged by licensed moneylenders. These are in addition to the interest rates, which also has a cap no matter which money lender in Singapore you deal with. These fees include the late payment fee, upfront service fee, and legal fee.

For the late payment fee, this is applicable when the loan is already in default. The legal amount does not go more than $60 per month, which adds to the late interest fee with a maximum of 4 percent per month to add to the principal. You should also keep in mind that this fee does not compound, which is not the case with regular interest. As a result, the late payment fee accumulates on a monthly basis.

There is also an upfront service fee that licensed moneylenders charge to their clients. This fee should not be over 10 percent of the loan’s actual value. If a court challenge takes place between the borrower and lender, then all legal fees that arise from the court hearings and challenges will have to be settled by the borrower.

If you are required to pay much more than these amounts, then it’s evident that the lender is none other than a loanshark. Licensed moneylenders are very much aware of their limits when it comes to fees and rates, so they would not attempt demand more than what is fair as prescribed by the Singapore Law.

6. The Ministry of Law Official Website Has a List of Licensed Moneylenders

List of Licensed Moneylenders

When in doubt, then you should go over to the official website of the Ministry of Law in Singapore for a full list of moneylenders recognised by and registered with this authority. Once you have found a potential money lender, make it a point to check the Ministry of Law’s list found online. In case you couldn’t find the name at all, then it’s highly likely that it’s a loanshark.

(Click HERE for the full list of updated licensed moneylenders from Singapore Ministry of Law.)

It may be worth noting that there are instances when some licensed moneylenders in Singapore are not found on the list. The most common reason for this is if the license has been given to the moneylender just recently.

In such situation, it may only happen because of the non-updated list and information on the site. You may also double-check with the Ministry anytime by giving them a call at their phone numbers – 1800-2255-529. This is the best way to get rid of any doubt or uncertainty as to whether the moneylender is licensed or not.

7. A Physical Office Shows Legitimacy in Business Operations

To be able to operate legally and be registered with the Ministry of Law, all licensed moneylenders must perform their business operations in an actual office. The registered address on the Singapore Ministry of Law website must match the physical office where the moneylender is managing its business.

licensed money lender officeHowever, it does not suffice for the moneylender to have an office. It also has to be a professional-looking and well-maintained office. All transactions are performed in the office such as the initial consultation, contract signing, and other situations where the client meets with the moneylender. There may also be times when communications are done over the phone or via email.

Meanwhile, loan sharks are running an illegal business, so it doesn’t make any difference to them if they have an office or not. In addition, they are concerned about being spotted easily in case illegal operations take place. So mostly, you can just find them online, with all your

8. Watch Out for Intimidation Tactocs

It is typical with loansharks to be quite abusive and threatening to their customers. They may use intimidation and threats each time they collect fees from clients. This can be difficult for a borrower since it only adds to his or her stress due to financial issues. With this in mind, it is essential to be sensitive enough to steer clear of moneylenders who do these because it’s highly likely for them to be nothing but loansharks.

The initial meeting doesn’t usually bring out the loanshark’s true colour. This is why you may find it almost hard to believe that the person whom you once talked to for your loan application is nothing but a loan shark. This usually happens when they begin collecting money from you, and you’re unable to pay on time.

9. Information Available at the Ministry of Law

There are some instances when the loansharks use the same name, licence number, and address of an actual licensed moneylender with the hopes of getting more customers. Unfortunately, unsuspecting clients only fall as their prey due to this false claims given by loansharks. It is too late sometimes before borrowers discover the truth about the moneylender pretending to have good intentions for them.

So, to spare yourself from such situation, you should see to it that the moneylender is indeed reliable and legitimate. After you have checked and confirmed this, you may begin reading carefully the loan contract and repayment methods. Most importantly, you should only sign the contract personally in the lender’s office registered with the Ministry of Law. Never allow the moneylender’s request to have you sign the contract elsewhere. Also, be sure to refuse offers if there is no contract presented to you since these are sure signs that the moneylender is indeed a loanshark.

10. Follows the Advertising Rules set by Registry of Moneylenders – Ministry of Law

Based on the Advertising Rules effective 1 November 2011, a licensed moneylender is only allowed to advertise on three channels.

They are only allowed to promote within the following channels:

  • In Print or Online Business or Consumer Directories
  • Registered Website Address
  • Within Registered Business Address Premises (Within or Exterior)

Advertising beyond those channels is prohibited. Therefore, if you receive loan invitations via flyers, SMS, emails, cold calls those might be coming from unlicensed moneylenders or loan sharks. Also, a new tactic observed, a loan shark may advertise using paid search results such as in Google Search. They may also advertise as a loan comparison site and when you open this website it may ask for personal information such as:

  • Singpass User ID and password
  • NRIC card or other personal ID documents such as driver’s licence, work permit, employment pass, or ATM card

You might also see them owning a social media account such as on Facebook and claiming as a licensed moneylender.  Therefore, you are advised to ignore those advertisements and report it to the Registry of Moneylenders at 1800-2255-529 or via their website.

What would happen if you ended up dealing with a loan shark?

Dealing with a loan shark can be stressful. You may experience the following worst scenarios when you borrow money from loan shark:

1. You’ll end up paying for a higher interest rate.

Their goal is not to help but rather to earn more money from you. Since they are unlicensed, they don’t have limitations in adding interest to your loan.

They lure many borrowers since, in the first few months, they will offer very low-interest rates that can be lower than licensed moneylenders. In the next months, you’ll be paying for interest rates that you have never imagined – and as mentioned earlier, loan shark interest rates are relatively higher.

2. You and your friends and family will experience harassment.

Loan sharks are known for their disastrous action to force you in paying your loan. They will send you threats in the form of text messages. Also, they may send unsolicited messages to your friends and your family members. In an instance, a loan shark may threaten your family member that they spread their financial credentials once you did not pay the loan.

3. They apply creative yet disastrous harassment tactics just to force you to repay the loan.

They will do what it takes just to make you repay. Also, they are very aggressive in forcing you to repay a loan with a soaring high interest. The worst thing is that they can even do is to apply violence and may even affect your neighbourhood.

So, what to do if the loan shark is after you? The next tips are dedicated to you.

How to deal with loan shark harassment in Singapore?

Every worst nightmare has its end. You still have the chance to escape those illegal lenders. They may be powerful and may use violence but don’t be afraid. There are still ways that you can do to stay away from them. And here’s how you can solve your loan shark problems.

1. Don’t Panic, Stay Calm.

Having a clear mind helps create better decisions. If you’ve found out that you end up dealing with a loan shark, don’t panic, just stay calm. Remember you stil can escape them. When you panic, it can cause anxiety and you might end up having the wrong decisions.

2. Call the Ah long Hotline and Report Them.

If you are finding ways on how to report a loan shark. This is a must-do for you. The Police and the Registry of Moneylenders – Ministry of Law have been widely campaigning to fight for Ah long. You can call the Police at ‘999’or connect to the X-Ah long hotline at 1800-924-5664.

3. Report the Continued Threats to the Police

If a loan shark is still bothering even after they have been reported, don’t hesitate to call the police. This may commonly happen since they want to get more money from you.

4. Stop Your Payments

As soon as you reported a loan shark to the authorities, immediately stop your repayments. Since it is an illegal activity, there’s no need to continue your payment.

5. Get Help from Social Service Agencies

Aside from the Ah long and Police hotline. There are still authorities that can help you. Get help before it’s not yet too late. You may connect with Credit Counselling Singapore, National Council on Problem Gambling, and ComCare.

1. Credit Counselling Singapore

2. National Council on Problem Gambling
Phone: 1800-6-668-668

3. ComCare
Phone: 1800-222-0000

Stay Away from Illegal Lenders

If you have decided to take a personal loan, a payday loan, or an SME loan from a licensed moneylender, always remember to verify first the identity of the lender. It takes only some minutes to check from the list of moneylenders.

Some loan sharks may become aggressive in inviting you to get a loan from them. The best thing that you can do is to report them to the proper authorities. Don’t be frighten and never believe in their false promises. Ignore their advertisements and messages. Also, please keep in mind not to give out your personal information such as NRIC, SingPass, or bank account details to them.

If it happens that you receive a cold call or any unsolicited messages about taking up a loan, you may verify by calling the anti-scam helpline at 1800-722-6688. You may also visit to learn more about loan scams.

By the way, always remember this – coming from Unlicensed Moneylending Campaign:

Stay Away from Ah longs or You’ll have a Hell of a Life.

Nobody wants to live in a nightmare, so it’s better to start with choosing the right licensed moneylender.

Final Thoughts

Even if you are in a tough financial situation, this does not mean you should seek help from random and unknown moneylenders in Singapore. There are many loan sharks in the country who charge ridiculously high rates and fees.

But the good news is that they can’t let you get their want unless you allow them to. By knowing the difference between licensed moneylender vs. loanshark, you’re off to a good start in finding the best money lender in Singapore that you can rely on. You can find a reliable licensed moneylender at MoneyIQ.

Lastly, if you know any Loansharks (Ah Long) related activities or harassment, we encourage you to call 1800-X-AH-LONG or 1800-9-24-5664, or make a Police report with this Emergency Hotline 999.

Also, you can visit this Loan Scam Alert website:

Loan Alert - Fight for Loan Scam Singapore

Published On: May 5th, 2024

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