If you need a quick loan, you can apply for a loan with a bank or licensed money lender near you.

For emergencies that require you to get money quickly, the latter may be a more viable option. But just because the loan is relatively easy to obtain, it does not mean that you don’t need to repay the money.

In this article, we will discuss what will happen if you are unable to pay money lender Singapore.

Before we explain what will happen to you if you owe a money lender in Singapore, let’s talk about something that you should do weeks or even months before taking a loan.

What You Should Consider Before Taking Up A Loan

Before you decide to approach a bank or a legal money lender in Singapore for a loan, the Ministry of Law says borrowers must know if the money lender they are dealing with is licensed. Borrowers must avoid loan scammers and loan sharks at all costs.

It has also stipulated several things you should put in mind as a borrower. Here are some of the reminders from the Ministry of Law:

  • The government of Singapore has various schemes for helping its people get financial assistance. So before you approach any bank or legal money lender in Singapore, see if you qualify for such financial assistance schemes. In many cases, these schemes do not come with extra charges. In some cases, they are grants.
  • If you decide to contact licensed money lenders for a loan, you will be legally obliged to uphold your part of the deal – in other words, you must repay the loan as per the terms of the contract.
  • Make sure you are fully aware of the terms of the loan. On this, the Singapore government has directed all licensed money lenders in the country to explain the terms of the loan to their clients in a language they understand.
  • Before you sign the loan contract, make sure you understand everything concerning the loan, including a licensed money lender’s interest rate and any other fees that might be applicable.
  • Using the Ministry of Law’s list of licensed money lenders in Singapore, shop around to see which of them has the most favourable terms and read all the terms carefully before you agree.
  • Borrow the amount that you can repay without any difficulty. If you are unable to pay money lender Singapore, you run the risk of incurring late fees and may even have to default on the loan.

What Happens When You Are Unable To Pay A Money Lender?

Be sure that there will be dire consequences if you are unable to pay money lender Singapore. In the eyes of the law, any legal money lender in Singapore has the right to get back the money you owe because it is not free money, but a loan.

The following things are likely to happen to you if you are unable to pay money lender Singapore:

You Might Not Be Able To Access Future Loans

If you fail to repay what you owe a money lender in Singapore, you might not be able to access any future loans.

When issuing loans, licensed money lenders do not check your credit score as banks do. Even so, before your loan application is approved, legal money lenders in Singapore have to do a background check on you.

The check, which goes through the Moneylenders Credit Bureau (MLCB), shows among other things, your loan repayment history, the number of unpaid loans, and the current borrowing limit.

So if you have any missed loan repayments, you can expect that they will be recorded in MLCB’s database. It is up to the licensed money lender to approve or reject your loan application.

If your loan repayment history shows that you are a borrower who doesn’t repay your loan, licensed money lenders in Singapore will reject your application.

You May Lose Your Collateral

If you took a secured loan that requires that you list a valuable asset as collateral, and you fail to repay your loan, you may well lose your collateral.

Banks and legal money lenders in Singapore are allowed to possess what you listed as collateral as repayment.

Legal Action May Be Taken Against You

If you fail to abide by your payments, a legal money lender in Singapore can take legal action against you.

You may be required to pay legal fees if the licensed money lender used the services of the court to recover the debt.

What Licensed Money Lenders Can And Can’t Do

For borrowers who are unable to pay money lender Singapore, licensed money lenders will look for means to get back what is owed to them.

Mostly, licensed money lenders in Singapore or the debt collectors they employ for such purposes may use the following means to get back their money:

  • Send a letter to your home demanding you to pay back their money
  • Visit your home or office to deliver the letter
  • Attempt to call or text you at reasonable hours to ask about payment
  • Take a legal action

However, licensed money lenders in Singapore cannot do the following even if you do not pay back the money you owe them:

  • Inflict physical injury on you because you are unable to pay money lender Singapore
  • Engage in any form of vandalism against you or your family
  • Stalk you or your family members
  • Harass, intimidate, or threaten you or any member of your family
  • Seize or damage your property unless they have a court order

Options To Take If You Are Unable To Pay A Money Lender

Before you took the loan, you may have been sure that you would manage to repay as per the terms and conditions of the loan, but things happen.

In such cases, there are a few things you can do if you are unable to pay money lender Singapore.

This section looks into three ways you can settle licensed money lender in Singapore.

Renegotiate The Repayment Terms

As mentioned, unforeseen circumstances may make it difficult for you to honour the terms of the loan repayment schedule.

If you really want to repay your debt but cannot do so under the current conditions, you can try renegotiating the deal by requesting the money lender to reconsider the loan repayment terms. Upon reviewing your proposal, the licensed money lender may lower the amount you pay every month or extend the loan tenure.

Whatever the money lender decides, you should be able to get a flexible loan repayment schedule that will make it easier for you to repay the loan.

However, extending the loan repayment duration and or lowering the amount you pay each month means that you will continue repaying the loan for longer than you thought, so beware.

Some make the grave mistake of taking another loan to pay the current loan. Remember the reason why you are requesting a fresh repayment schedule – you are unable to pay money lender Singapore.

Therefore, it is not advisable to take a second loan to pay for the first loan, which you are already having difficulties repaying. Taking another loan will only worsen things by making your debt pile up and extending the repayment term.

Look For A Debt Counsellor

Debt counselling can be useful, especially for those who are struggling to repay their loans.

Reputable debt counselling organisations in Singapore try their best to counsel their clients on the various ways of dealing with stalled debts.

These organisations use resources that are geared at helping those that are unable to pay money lenders in Singapore.

The Ministry of Law has a list of licensed debt counselling organisations, which you can find here. 

File For Bankruptcy

To file for bankruptcy, you need to have a debt of over $15,000 that you have problem paying.

Depending on the outcome of the assessment from relevant authorities, you might qualify for a Debt Repayment Scheme, after which the High Court will direct an Official Assignee to manage your debt.

Can The Registry Of Moneylenders Help You Negotiate With The Money Lender?

The Registry of Moneylenders does not have the mandate to negotiate on your behalf if you are unable to repay your loan.

This is because a loan constitutes a private contract between you and the licensed money lender.

However, when it is obvious that you are unable to pay money lender Singapore, you can approach Credit Counselling Singapore (CCS) to get tips on how to handle your debt. For example, you can attend its online debt management course.

There Is Always A Way Out

No one wants to be in the situation of being unable to pay money lender Singapore. You may have a good plan but somehow, something happens and you are unable to pay what you owe your money lender.

Thankfully, there is a way out. You can ask your money lender to restructure the repayment terms or schedule, or talk to a debt counsellor.

At Lending Bee, we believe in offering reasonable loans that you can repay. Our team will be happy to answer any questions you may have.

Get help from our friendly loan officers or get started by applying for a loan now.


About Ashley Sim

Calling herself a “professional multi-tasker”, Ashley worked as a relationship manager in a bank for five years. She left her job just before the pandemic happened and became a freelance writer for about a year. Now, she’s making the most of her love for writing and knowledge of the banking and financial industry in her role as a content marketing lead. She hopes to help people make better financial decisions through her content and campaigns.