How To Run Away From A Loan Shark In Singapore

Getting a loan from a money lender is a legitimate way to get funds when one has an emergency.

Yet some rogue lenders, or loan sharks, have affected the reputation of the moneylending sector by behaving unlawfully.

Loan sharks have mastered the art of manipulation and may use violence, harassment, intimidation, and other illegal means to make the lives of their customers-turned-victims a misery.

Nonetheless, once you learn how to run away from loan shark in Singapore, such unlicensed lenders won’t be able to do anything to you.

This article covers all the details you need to protect yourself from the dirty schemes of these illegal money lenders.

How To Know If You Are Dealing With A Loan Shark

To deal with loan sharks in Singapore successfully, you first should learn how to identify them.

Here are the most common signs to look out for:

1. Loan Sharks Advertise Through Illegal Channels

The Singapore government requires registered money lenders to advertise their services only through the following channels:

  • Their official websites
  • Consumer and business directories
  • Inside or outside their physical premises (gates, doors, walls, etc)

Since loan sharks aren’t registered and don’t follow the law, they often ignore this simple requirement.

They bombard their customers with texts, e-mails, and calls. These “lenders” also use social media and other modern tactics to reel in unsuspecting victims.

2. Loan Sharks Pretend They Can Lend You Any Amount

Another simple way to detect a loan shark is to look at the amount it’s willing to lend you.

These unlicensed lenders appear to be generous financial institutions that are more than willing to help you out of the abundance of love in their hearts.

Chances are, they won’t look at your repayment ability. They might not even ask you to provide proof of income to verify whether you qualify for their loans.

On the other hand, licensed lenders understand that there is a limit on how much you can borrow from them and use your annual earnings and nationality to determine your loan limit.

Here is a table that summarises the maximum amounts that the Ministry of Law imposes:

Annual EarningsSingaporeans And Private ResidentsForeigners Living In Singapore
Less than $10,000$3,000$500
From $10,000 to less than $20,000$3,000$3,000
$20,000 and above6x of their monthly income6x of their monthly income

3. Loan Sharks Charge Unreasonable Interest Rates

Before accepting any loan, check whether your lender’s interest rates fall within the legal limits.

Your findings should help determine whether you are courting harassment from unlicensed money lenders.

According to the law, licensed money lenders in Singapore must charge a maximum of:

  • 4% interest rate per month
  • $60 late penalty fee

You also have a reason to be concerned if the lender’s interest rates are too low. It could be an invitation to intolerable troubles.

4. Loan Sharks Impose Other Illegal Fees

Checking other fees your money lender charges is another foolproof way to know if you are dealing with a loan shark.

You are at risk if the lender asks you for an admin or loan processing fee before approving your request.

Licensed lenders in Singapore can only charge you an admin fee of up to 10% after approving your loan, which they deduct from the principal amount.

Other than this, they can charge you costs ordered by the court if you fail to repay your loan as agreed.

Now that you know the laws governing loan fees and how to run away from a loan shark in Singapore, it could be a grave mistake if you ignore the glaring red flag of illegal fees.

5. Loan Sharks Do Not Offer You A Valid Contract

Most loan sharks in Singapore won’t offer you any reliable contract to avoid possible legal action.

If your lender doesn’t offer you any contract, you don’t need to doubt that you are dealing with a loan shark.

If it does, be sure to countercheck whether the contract:

  • Outlines the specific rights and obligations for both parties
  • Features the exact interest rates, other applicable fees, and a flexible reimbursement schedule
  • Details the courses of action regarding loan defaults and late reimbursements
  • Provides detailed, complete terms and conditions

If any of these is missing, run for your dear life.

You should do the same if the dealer says it must keep your documents such as your NRIC as collateral.

6. Loan Sharks Threaten Their Victims

If you can’t repay your loan in time, a loan shark can resort to dangerous and frightening practices such as verbal abuse, harassment, and threats. Other methods they often use are:

  • Vandalism
  • Stalking
  • Physical violence

Licensed money lenders are always professional. Some of them can help you to consolidate your loans when you have no way of following through your loan agreement’s terms.

How To Deal With Loan Shark Harassment In Singapore

You won’t want to deal with loan shark harassment in Singapore because of the lenders’ scary reputation. That makes sense, so avoiding them is the perfect solution.

Nonetheless, if you or your loved ones are already entangled with them, you must take action.

So whether you know how to stay safe, it’s still important to learn how to run away from a loan shark in Singapore.

Here’s what you need to do:

1. Check If the Money Lender Is Registered With The Ministry of Law

Loan sharks construct personas online that appear 100% legitimate. Their websites are often professionally designed and feature fake testimonies complete with highly persuasive elements.

These illegal lenders can also trick you by claiming that the Ministry of Law has not put its company on its list of licensed money lenders in Singapore for some good reasons.

For example, one can say that it’s still new in the industry. Another can insist that the Ministry has approved them to start trading, but not updated the list yet.

This is a lie as MinLaw has stopped granting moneylending licenses in Singapore for now.

As someone who now understands how to solve loan shark problems in Singapore, you can’t entertain any of that.

Review the licensed money lenders list on the Ministry of Law’s official website. If you can’t see the lender on this list, don’t do business with it. It’s a loan shark.

2. Report It To The Relevant Authorities

Loan sharks are not above the law in Singapore, so they shouldn’t cause havoc around you. Here are a few places where you can report them for swift action:

  • Singapore Police: 1800-255-0000 (for crime-related information); 999 (for emergencies)
  • Loan shark Singapore hotline: 1800-924-5664
  • E-complaints police form: Click here
  • Loan shark helpline Singapore: 1800-2255-529

3. Don’t Submit To Harassment

Loan sharks are masters of mind games and can manipulate you to participate in their illegal dealings. However, you can also learn how to fight loan shark harassment and overcome a loan shark’s threats.

Please remember that it’s an offence to borrow from a loan shark or submit to its harassment in any way.

So you shouldn’t even pay your lender’s loan once you’ve discovered that you are dealing with a shark.

How to run away from a loan shark in Singapore in such a situation? File complaints as soon as you sense that you or someone else is at risk of being entangled with a loan shark.

This way, the authorities can respond before the situation worsens.

4. Contact Social Service Agencies For Help

As you might have known, dealing with a loan shark might leave you with massive financial and psychological distress.

The good news is that there are institutions that you can contact for moral and financial support:

Examples of social service agencies that can assist you are:

  • Credit Counselling Singapore: 6225-5227
  • Arise2Care Community Services: 6909-0628
  • Blessed Grace Social Services: 8428-6377
  • MSF ComCare: 1800-222-0000
  • One Hope Centre: 6547-1011
  • Silver Lining Community Services: 6749-0400
  • Association of Muslim Professionals: 6416-3960
  • Adullam Life Counselling: 6659 7844

Punishment For Loan Sharks In Singapore

The punishment for first-time offenders who have committed or attempted to commit acts of harassment may include the following:

  • Up to five years in jail
  • A fine of between $5,000 and $50,000
  • Three to six strokes of the cane for men

Running Away From A Loan Shark In Singapore Helps

Even though unscrupulous money lenders cause lots of problems, you have nothing to worry about now that you know how to run away from a loan shark in Singapore.

Use the tips above, and you won’t deal with an illegal lender that is only interested in making your life difficult.

Are you looking for a licensed money lender in Singapore that understands its responsibility? Consider Horison Credit.

We offer affordable loans, and you can apply for a loan today and receive the money within a day. Contact us now.


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