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Why People Still Borrow From Ah Longs and How To Deal With Loan Shark Harassment

Loan Shark Harrassment

In a pandemic-stricken world, Singapore’s unlicensed moneylenders are thriving. As individuals and businesses are driven to desperation, some are looking for urgent cash – not knowing it’ll cost them more in the long run.

In fact, 300 people were arrested by Singapore police due to loan shark activities in September of last year. According to the investigation, 67 suspects were suspected to be runners. 7 of them were believed to have carried out acts of harassment.

Under the Moneylenders Act, a person is presumed to have assisted a loan shark when their bank account or ATM card is used to facilitate a transaction. And the repercussions are serious. First-time offenders are punishable by: 

  •  A fine of between $30,000 and $300,000
  • Imprisonment up to 4 years
  • Canning of up to 6 strokes

Recent Loan Shark Harassment

Unlicensed money lenders are notorious for their cunning tactics. Some unsuspecting individuals who are desperate for quick cash may fall victim. That said, it’s best to take necessary precautions to avoid dealing with them.

Dealing with loan sharks leads to terrible consequences. These unlicensed moneylenders turn to threats and harassment to frighten borrowers who are unable to repay their loans.

Even during the circuit breaker, loan sharks in Singapore were reported to have sent their debtors hundreds of dollars of food deliveries. Some recruited runners to harass debtors while posing as stay-home notice enforcers.

Despite these dangers, why do some people still opt for Ah Longs?

Need Urgent Cash During The Coronavirus-Stricken Times

Some individuals have limited options when they need urgent cash. According to a World Bank survey, 8% of Singaporeans borrow from family and friends. However, the majority of Singaporeans said their main source of emergency funds is their savings.

With the current situation, some found themselves unemployed and thus, need emergency cash for their immediate financial needs. Unlicensed money lenders can use their desperation to trick them into getting a loan.

Strict Bank Restrictions

Banks need to carefully assess and evaluate each borrower. Why? Because they need to manage credit risk. Without proper regulation, banks may face financial problems as well.

That said, banks may require borrowers to post collateral to secure their loans. They may also look into the borrower’s credit score and history. This means a person with a low credit score will less likely be approved.

With the strict bank restrictions, borrowers who need urgent cash may not get it when they need it.

Do People Have Other Options Than Banks? 

Stringent requirements set by banking institutions in Singapore make it hard for borrowers to get the financing they need when they need it.

Of course, there are options available for borrowers. For example, they can take a secured personal loan where they can use their assets as collateral. However, borrowing from banks can lead to high interest rates and tight credit access. That’s why desperate borrowers are seeking alternatives to banks. 

That’s where a money lender in Singapore can be of assistance.

Licensed money lenders operate under the guidelines set by the Ministry of Law. Singaporeans and foreigners living in the country can borrow from credible money lenders without fear of loan shark harassment. Additionally, they don’t have to worry about vague loan terms and unfair interest rates.

In fact, effective since October 1, 2015, the maximum interest rate that licensed lenders can charge is 4% per month. If the borrower fails to pay, the late interest rate is capped at 4% per month for each month the loan is repaid late.

So how much can you borrow from licensed money lenders?

You can borrow any amount if you’re applying for a secured loan. However, for unsecured loans, there is a set loan cap:

Borrower’s annual income Singapore Citizens and Permanent Residents Foreigners residing in Singapore
Less than $10,000 $3,000 $500
At least $10,000and less than $20,000 $3,000
At least $20,000 6 times monthly income 6 times monthly income

While licensed money lenders are a great alternative to banks, they may not meet the demands of those who need a large sum of money. 

Why? Because the Moneylenders Act has set a maximum loan amount for unsecured loans.

Borrowers whose yearly income amounts to at least $20,000 can borrower up to 6x their monthly salary. However, Singaporeans with less than $10,000 annual income can only borrow up to $3,000.

Despite this cap, borrowing from a licensed money lender is still a good option.

Why Borrow From Licensed Money Lenders?

  • Faster approval speed: Licensed moneylenders have less stringent requirements as compared to banks. That said, you can get the financing you need when you need it.
  • Manageable unsecured loans: Unsecured loans usually have high interest rates. This could become burdensome with an extended repayment period. A licensed moneylender can provide enough financing with a shorter repayment period.
  • Quick access to emergency cash: Applying for a personal loan from banks can take several days or weeks. With a credible moneylender, you can get approved in less than a week. Some can even dispense cash within the same day.
  • Regulated activities: The Ministry of Law in Singapore regulates the activities of licensed money lenders. That said, borrowers are protected against potential loan shark harassments.

Never Borrow From Loan Sharks

Why You Should Never Borrow From Loan Sharks?

1. Loan Sharks Charge Very High Interest Rates – Sometimes up to 50%!

Unlike licensed money lenders who are only allowed to charge up to 4% interest rate per month, loan sharks can charge unfairly high interest rates.

Some unlicensed money lenders even charge between 24% and 60% annually!

Unlicensed moneylenders attract unsuspecting borrowers through unsolicited phone calls. Other loan sharks also advertise their services through text messages and social media.

2. Charge Processing Fee Without Approving Your Loan

Loan sharks in Singapore may instruct borrowers to pay a loan processing fee before approving their loan. They may say it’s a mandatory processing fee that all borrowers must pay.

Don’t fall for such trickery. Licensed moneylenders will never ask you to pay anything before granting your loan. Additionally, they can only charge a processing fee of not more than 10% of the principal loan amount.

What happens when a borrower decides to cancel the loan? Other loan sharks in Singapore will use threats and even go so far as harass their victims. 

3. Withholds Part of The Loan

Unlicensed moneylenders will try to get as much money from borrowers as they can. That said, they are also known to withhold part of the loan. They might come up with an excuse to do this. For example, they may say it’s a fee for processing the loan.

Remember, the law only allows licensed moneylenders to charge not more than a 10% processing fee based on the principal loan amount. Additionally, licensed lenders are prohibited from withholding a part of the loan amount for any reason.

4. No Loan Contract

Another reason why you should steer clear from loan sharks is due to the absence of a clear loan contract. Some unlicensed moneylenders will not offer a loan contract. Or they might ask you to sign a blank or incomplete contract.

This could lead to serious financial problems in the long run. Why? Because loan sharks in Singapore might change the loan terms according to their whim. For instance, they might increase the interest rate without prior notice.

Even when you’re dealing with a licensed moneylender, make sure the loan contract states the terms and conditions of the loan. It must contain sufficient details, such as the interest rate, repayment schedule, and fees.

Otherwise, cancel your application and don’t sign the contract.

5. Harassments

Because of their unfairly high interest rates and fees, debtors will have a hard time paying off their debt. So what happens when a borrower fails to pay a loan shark?

Loan sharks in Singapore resort to abusive language and threats. In fact, during the circuit breaker, there have been reports of loan sharks using food delivery services to harass borrowers. They placed multiple orders a day to be delivered to the borrower’s home.

Here are some of their most common scare tactics:

  • Send threats over SMS and WhatsApp.
  • Threaten you, your family members, friends, and work colleagues
  • Visit your home and office
  • Use physical violence
  • Vandalizing the borrower’s property such as splashing paint or writing humiliating words on the door
  • Set fire to the flat door
  • Recruit runners, who pose as stay-home notice enforcers, to harass borrowers.

How to Deal With Loan Shark Harassment?

Contact the Authorities

If you suspect that you’re dealing with a loan shark, do not make further payments. Instead, immediately report them to the authorities. Call the Singapore police force at 999 or the X-Ah Long hotline at 1800-924-5664 (1800-X-AH-LONG) to report the loan shark.

Even if you’re dealing with a licensed money lender, they can still break the law. That said, watch out for these red flags:

  • The lender advertised their services through flyers, calls, or text messages
  • They asked you to pay pre-loan fees
  • Did not explain the terms and conditions of the loan
  • You didn’t sign or receive a loan contract
  • The lender is holding on to your personal identification documents

If you find yourself facing these loan shark problems, immediately contact the Registry at 1800-2255-529 or submit a complaint via their website.

Do Not Respond To Their Harassments or Threats

It’s hard to stay calm when someone is threatening you or your loved ones. But when dealing with loan shark problems, it’s best to have your wits with you.

First, don’t make further payments and contact the police. If you are aware of the identity of the loan sharks, you can consider applying for a Protection Order under the Protection from Harassment Act.

That said, do not give in to their scare tactics. Don’t let them use your ATM or give them any bank details. 

Remember, agreeing or assisting loan sharks is punishable by law. If you’re found guilty, you may face up to 5 years in prison, pay a fine, and suffer up to six strokes of the cane.

Change Your Personal Information and Passwords

It’s also a good idea to change all your personal information and update passwords that have been compromised. Take further measures by changing your phone number. If loan sharks have been harassing you through your social media accounts, update those too.

Seek Help from Social Service Organisations That Provide Credit Counselling 

You can also seek the assistance of social service agencies that help debtors recover from their financial problems. These agencies can help negotiate directly with your creditors. Plus, they also offer money management resources to help you get back on your feet. 

For instance, Credit Counselling Singapore offers debt consolidation plans. They also have debt repayment options if you’ve filed for bankruptcy.


At first, loan sharks in Singapore do not look intimidating at all. In fact, they act very friendly and understanding to your problems. That’s why many unsuspecting borrowers fall for their tricks. So how do you deal with loan sharks?

The answer is to never deal with them. Instead, do the following:

  • Never borrow from loan sharks. They may offer fast cash and short-term relief but compared to the fear and harassment that you or your family could face – it’s not worth it.
  • Never agree to become a guarantor to any illegal loans.
  • Do not let anyone keep your NRIC or any personal identification documents.
  • ·Avoid excessive gambling. Are you a compulsive gambler? Seek help and counselling so your debt will not get out of hand.

Remember, there are legitimate alternatives to banks. You can seek the financial assistance of a licensed moneylender like 365 Credit Solutions. 365 Credit Solutions is a well-established legal licensed moneylender in Singapore. 

You can borrow up to 6x your monthly salary. To be eligible, you must be at least 21 years old with a minimum salary of $2,000. Fill out our quick form and if you’re eligible, you may get your application approved in an hour and your cash on the same day!

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