Identify Unlicensed Money Lenders in Singapore with Easy Ways

Close up hand holding pen sign contract

It’s very easy to fall prey to unlicensed money lenders, especially during these hard times.

People who are facing a financial crisis from losing their jobs or suddenly having to deal with large bills desperately look for ways to get much-needed cash.

If you are in need of cash, you should get a loan from licensed money lenders, instead of loan sharks. Legally, licensed money lenders in Singapore can only charge interest rates up to 4% per month for their loans.

Here are easy ways to identify and avoid unlicensed money lenders in Singapore:

How to easily verify a licensed money lender

The first thing that you need to do to verify whether your lender is licensed or not, is to check if they are included in the list of registered moneylenders by Singapore’s Ministry of Law.

Licensed money lenders will not hesitate to show you their Ministry of Law license evidencing their legal status.

Advertising Rules

In Singapore, money lenders are prohibited from advertising or soliciting borrowers through SMS, telemarketing services.

If you receive a message or a call that’s offering personal loans, don’t entertain them by replying or answering.

The only legal means that licensed moneylenders permitted to advertise through are:

(a) business or consumer directories (in print or online media)

(b) websites belonging to the money lender

(c) advertisements placed within or on the exterior of the money lender’s business premises.

Permitted Loan Amount

In Singapore, you can borrow any amount for loans secured with collateral.

For unsecured loans, here is a table of the total maximum amount that you may borrow from all money lenders:

Annual Income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than $10,000 $3,000 $500
At least $10,000

and less than $20,000

$3,000 $3,000
At least $20,000 6 times monthly income 6 times monthly income


The maximum interest rate that a licensed money lender in Singapore can legally charge is 4% a month regardless of the borrower’s annual income or the loan amount. This limit applies to both the nominal interest rate and the late interest rate/late repayment/late fees.

You can tell if a lender is a scam by the interest they charge which is typically much higher than the legal rate.

Scams or unlicensed money lenders will not bother to follow legal and official procedures and will resort to unscrupulous means. Here are things that licensed money lender are prohibited to do in Singapore:

5 Things Moneylenders Are Not Allowed To Do

1. Call or send unsolicited WhatsApp messages or SMS

A licensed money lender follows advertising rules and is only allowed to solicit borrowers through websites or blogs belonging to them, customer directories, and ads within their premises.

So if you randomly receive from other channels, such as text messages, WhatsApp messages, SMS, or calls from lenders, they’re most likely unlicensed money lenders looking for new victims.

2. Approve or grant a loan to a borrower remotely

When borrowing money in Singapore, the law requires that the borrower visit the licensed money lender in person or on their premises where he will be filling out the application, submitting documents, and signing loan contracts.

To speed up the application process, unlicensed money lenders are willing to approve the loan application through email, SMS, or phone call without any documentation which is prohibited by law.

3. Accept payment before the disbursement of the loan

Any processing fee that a licensed money lender may charge will always be deducted from the principal amount after the loan is granted. They are not allowed to ask for any payments before approving the loan.

Unlicensed money lenders will try to make these payments seem legitimate by posing them as mandatory processing fees or as collateral for the loan.

4. Ask for your SingPass username and password

Unlike licensed money lenders who will encourage official methods verified by the government, unlicensed money lenders will pressure you to share your SingPass through text or other means.

In Singapore, a licensed money lender is not allowed to obtain extremely personal information like Singpass usernames and passwords.

5. Make you sign a blank contract

If your “licensed” money lender does not offer you a loan contract, you are most likely dealing with a loan shark. Aside from not having a loan contract, another indicator that a money lender is unlicensed is when they offer you a blank or incomplete contract to sign.

The agreement will often have vague terms and conditions that a loan shark will neglect or refuse to explain.

Other illegal practices:

1.Retain your ID or other personal documents

No licensed money lender will ask to retain your NRIC card or any other personal ID documents like your driver’s license, passport, work permit, employment pass or ATM card. Unlicensed money lenders will ask to keep your ID in hopes of intimidating you by promising to give it back only when you repay them. Whatever their reasons are, they are not legally allowed to do this.

2. Use abusive or threatening language

The Protection From Harassment Act protects borrowers from intimidation, vulgarities or threats employed by money lenders or debt collectors to extract payment.

In Singapore, money lenders are prohibited from threatening, using abusive words or behaviors with the intent to cause harm or distress. If they violate the Act, don’t hesitate to report them to the authorities.

What happens when you fall victim to loan scams?

  • You might be unable to repay your debt

Because transactions with unlicensed money lenders often involve extremely high-interest, the total charges that you would have to repay could easily sky-rocket into a massive amount that you would not be able to pay.

You could end up owing twice the amount you originally received in just a short period of time. It could leave you in a worse position than before you even got the loan.

  • They will try to manipulate you

They will make it seem like they’re the only ones that can lend you money instantly without having to submit extensive requirements and documentation.

However, it’s important to know that the government has financial assistance programs available to help you. Here are some government financial assistance schemes in Singapore that you may apply for:

  • COVID-19 Recovery Grant

It provides temporary financial support to lower- and middle-income workers (both employees and Self-Employed Persons) with less means and family support, who have been affected by the economic impact of COVID-19.

You can apply online from 18 Jan 2021 to 31 Dec 2021 on the Ministry of Social and Family Development’s website.

  • CDC Vouchers

The government gives out $100 worth of Community Development Councils (CDC) Vouchers to each Singaporean household. These vouchers can be used at participating heartland shops and hawker centres.

If you wish to sign up for the 2020 GST Voucher, you can send an email to or visit this website for more information.

  • Post-Secondary Education Account (PSEA)

This is part of the Post-Secondary Education Scheme that helps pay for all eligible Singaporean’s post-secondary education.

Find out more details about the PSEA on the Ministry of Education’s website.

  • You will experience all sorts of dirty schemes

Loan sharks are very creative and resourceful when it comes to their scheming process. They often employ dishonest tactics like having their borrowers sign-up for a phone line or a phone plan.

And to collect the loan amounts, there have been some instances where loan sharks splash paint on their debtor’s property to pressure them into paying. Some unlicensed money lenders resort to harassment even on social media.

  • They will harass you

Other than employing dirty schemes, loan sharks will do worse things like threatening you and your family. They will harass you, your family members, and work colleagues by calling or visiting your home, office or business premises. Some even use physical violence.

Here is an article detailing the unpleasant experience of a victim transacting with a loan shark:

woman with two arms crossed

How to deal with an unlicensed money lender?

Totally avoid talking to them

Avoiding them completely is the only sure-fire way to be safe from their deceiving tactics and manipulation. If you don’t talk to them, you won’t be enticed to borrow money from them or pressured to comply with their demands.

Too good to be true? Don’t fall for it

They will promise you large amounts of money and they will downplay the consequences of entering into a loan agreement with them. When it all seems too good to be true, run the other way because it usually is. While loan sharks can be very persuasive, take a step back to look at the bigger picture and don’t fall for their outrageous offers.

Verify the license

As mentioned, you can check out the list of licensed money lenders on the Ministry of law Singapore website to see whether or not you’re dealing with a loan shark.

Do not engage

To contact you, loan sharks will often use unauthorized outlets like flyers, emails, text messages and calls. The best thing to do is not to respond to them. Licensed money lenders are only allowed to promote their company on directories, money lender-owned blogs, and ads within their premises.

Where to complain?

If you find yourself in a shady situation involving an unlicensed money lender, you can call the police or file a complaint via the I-Witness portal at

Seek Assistance from Social Service Agencies

There are financial experts who can give you professional advice and help borrowers recover from serious debt by providing general credit management information, credit counselling, and providing assistance in debt repayment plan.

Adullam Life Counselling 9423-8832
Association of Muslim Professionals (AMP) 6416-3960
Arise2Care Community Services 6909-0628
Blessed Grace Social Services 8428-6377
Credit Counselling Singapore 6225-5227 / 6338-2663
One Hope Centre 6547-1011
Silver Lining Community Services 6749-0400

Final word

If you are in a financial crisis, it may be tempting to engage with loan sharks. However, don’t fall into their trap and seek out legitimate ways of getting financial assistance instead.

Before entering into a loan agreement, take the time to learn more about the licensed money lender you’re dealing with and check out all your other options first. If you need funds, you can always try getting a loan from legal institutions.

If you want to get a quick loan in less than an hour, you can check out A1 Credit, a licensed moneylender in Singapore that can grant you a loan of up to 6x your salary!

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