Loan sharks are wreaking havoc in Singapore.
Anyone can fall prey to them, regardless of age, education level, or economic status, because they know exactly which buttons to push to hook you in.
Once you borrow money from them, loan sharks become unpredictable and violent. Even if you repay them diligently, they can always come up with new demands, such as additional fees or shorter tenure. Loan shark harassment is very real in Singapore.
That’s because: Loan sharks want to get as much money from you as possible.
To this end, they’ll apply unimaginably harsh tactics. If you’ve started dealing with a loan shark, don’t despair. We’ll teach you how to deal with loan shark harassment in Singapore in this guide below.
How Do I Know If I’m Dealing With A Loan Shark In Singapore?
Dealing with loan sharks in Singapore is extremely dangerous. We’ll help you learn to recognise the signs so that you can take action.
1. Loan Sharks Advertise Through SMS, Flyers And E-mails
Loan sharks advertise through texts, WhatsApp messages, e-mails, flyers, social media, and so forth. All these loan advertising means are illegal, according to the Ministry of Law.
Licensed moneylenders in Singapore have limited advertising channels:
- Business directories
- Consumer directories
- Their company’s official website
- Ads placed on their company’s headquarters, like their walls, gates, or doors
2. Loan Sharks Claim To Lend You Any Amount
Loan sharks don’t care about your income, credit score, or other paperwork. They’ll hook you with the promise of lending massive amounts without any due diligence. Once you’ve stepped into their trap, these loan sharks will harass you to no end.
If banks rejected your loan applications before, this promise is a huge temptation. However, due diligence isn’t useless:
The licensed loan agent has to make sure you can repay the loan.
That way, they reduce the risk of default on their company and ensure you don’t sink into too much debt.
To get a better idea, here’s the rule of thumb of how much you can borrow depending on your nationality and income:
|Yearly income||Singapore Citizens and PRs||Foreigners|
|Between $10,000 and $20,000||$3,000||$3,000|
|>$20,000||6 times your monthly salary||6 times monthly salary|
If you need to get a loan urgently but was rejected by banks, consider applying for a fast loan from reliable licensed moneylenders like Lending Bee.
3. Loan Sharks Charge You Extremely High Interest Rates That Are Not Legal
Loan sharks use illegal means to get more money in a short period. That’s why they’ll impose excessive interest rates even on the smallest loan.
But there’s more:
- Loan sharks don’t respect a repayment schedule. Therefore, they can ask for full repayment at any time.
- Loan sharks can demand higher interest rates without any reason.
- Loan sharks demand massive penalties.
Instead, MinLaw caps licensed moneylenders in Singapore at a 4% maximum interest rate per month. Legal creditors can only impose these other fees apart from the monthly interest:
- $60 maximum/month late fee
- 10% of your principal loan amount when you take up the loan
- Legal costs decided by a judge if the moneylender takes you to court for defaulting on your loan
All the charges above can’t add to more than the amount you’re borrowing.
4. Loan Sharks Impose Processing Or Admin Fees
No licensed moneylenders in Singapore can charge you before approving your loan. The only fee they can impose is 10% of the amount they borrow after you both sign the contract.
Loan sharks, on the other hand, are devious about their pre-loan fees.
At this stage, Ah Long will probably ask you for a small amount to hasten the approval process. Another strategy is to tempt you with a more massive amount soon if you pay a meagre fee now.
Remember that you will never need to pay any amount in order to get your loan approved.
If you wish to speed up your loan process, follow these tips instead.
5. Loan Sharks Draft Unreliable Contracts
All licensed moneylenders and banks in Singapore are obligated by law to write up a comprehensive loan contract. This contract includes both parties’ obligations and rights.
Yes, financial institutions have obligations too.
Besides, an expert loan agent will have to explain all the terms and conditions to you. You can ask as many questions as you want until you feel you’ve fully understood these terms.
Your contract should include:
- Precise interest rates
- Tenure length with an instalment schedule
- Any other fees
- Legal measures in case of late repayment and loan default
Here’s what Ah Long do instead:
- They don’t draft any contract
- They show you a contract with incomplete conditions
- They ask you to sign blank or incomplete files
- They demand your NRIC or bank account passwords
- They hold onto your ID
- They agree to a loan via texts or calls
- They don’t give you any copy of your contract
6. Loan Sharks Use Threats
All licensed moneylenders in Singapore are polite and professional, even if you can’t meet your contractual obligations. The best ones will also search for new customised solutions to help you respect the terms you signed up for.
Instead, loan sharks:
- Threaten you and your family
- Harass you, your family members, and work colleagues with phone calls
- Visit your home and office
- Call you outside of business hours
- Use physical violence
How To Deal With Loan Shark Harassment In Singapore?
Now that you know how to recognise a loan shark let’s see how you can deal with them quickly.
1. Check If They Are Registered Licensed Moneylenders With The Ministry Of Law
Before taking up any loan, make sure the agency you’re working with has a MinLaw license. You can find the updated list of licensed moneylenders in Singapore here.
Loan sharks will lie about why they’re not on that list if you confront them with it. For example, they’ll say:
- The list is known to be incomplete.
- They’re new, and the system hasn’t inputted their name yet.
- Their business is operating under two names.
2. Report Them To The Police
Even licensed moneylenders can break the law. You should immediately call the police or the X-Ah Long hotline at 1800-924-5664 if:
- A creditor is advertising its business through flyers, calls, or texts.
- They ask you to pay pre-loan fees.
- You don’t sign or receive any contract.
- Someone is holding onto your ID.
- Someone is harassing you.
Remember that harassment includes:
- Showing up at your home in large groups of over five people
- Vandalising and destroying your property
- Following you incessantly
- Taking your assets without a court order
- Phone calls to third-parties
- Phone calls outside business hours
Here’s what else you can do:
- If a licensed moneylender is harassing you, you can contact the Registry of Moneylenders at 1800-2255-529.
- If you don’t want to call the police, you can file an online complaint here.
- Report as spam any phone number or e-mail that’s harassing you.
- Block the loan sharks immediately.
Warning: Loan sharks don’t protect your privacy. They’ll share your phone number and e-mail with other Ah Longs, who may get in touch with you later. These illegal lenders will tempt you with amazing-looking deals to help you get rid of the first loan shark.
As a result, you’ll fall into the vicious circle of getting more and more loans from tens of loan sharks. Don’t think it could happen to you? Read how one person’s $20,000 loan increased to $400,000 here.
3. Don’t Submit To Harassment
We know it’s almost impossible to remain levelheaded when someone threatens you and your loved ones. Your instincts tell you there’s no way out except doing what you’re told.
Remember: the best solution is always to contact the police immediately.
Here’s another thing you may not know: agreeing or assisting the loan shark is a criminal offence in Singapore. So, if you’re harassing other people or letting them use your card, you may be found guilty.
These offences are punishable with gaol time for up to five years, a fine, and strokes of the cane.
Pro tip: If a loan shark is harassing you, change all your passwords and phone numbers.
4. Don’t Pay The Loan Shark
Here’s a common mistake people do:
They keep reimbursing Ah Long even after contacting the police.
One reason is that you are too afraid of the loan shark and prefer to keep them on your right side until they’ve been prosecuted. Another reason is you’re being intimidated. Loan sharks can tell you that you’re facing gaol time if you’re not repaying your debt to them.
Fearing loan sharks and their harassment is understandable. They are dangerous.
But at the end of the day, loan shark activities are illegal. No loan shark can demand payments to an illegal loan. You will have to deal with the loan shark smartly.
Remember: If you find out that a loan shark is impersonating a legal moneylender, you should stop paying them immediately.
5. Contact Social Service For Further Assistance
If you need more help fighting off a loan shark, Singapore has plenty of counselling and social services institutions to help. They are mostly non-profit and will help you with debt management.
Below you’ll find a list of the best ones where you can ask for support:
|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?
At the end of the day, other than good debt planning, you will need to repay all the loans under your name.
If you have issues with repaying your debt, you can try the solutions below:
Debt Consolidation Loan
Licensed moneylenders in Singapore offer affordable debt consolidation plans. The basic idea behind these loans is that preexisting debt snowballs because of accumulating interest rates.
You can solve this issue by amassing all your debt into a single loan.
This loan has a lower interest rate and longer tenure. That way, you’ll reimburse it in smaller installments that don’t make a hole in your budget. You can easily apply for a debt consolidation loan within minutes right here.
The overall interest you pay will be significantly lowered, especially those from credit cards.
Credit counselling agencies help you negotiate directly with your creditors and offer plenty of money management resources. For example, Credit Counselling Singapore provides debt consolidation plans and debt repayment options for bankruptcy.
The sooner you come up with a plan to repay your debt, the better it is.
Don’t fret, if you have any financial questions or questions regarding loans, you can submit your query here for free. Our trained staff will get back as soon as possible. No obligations!