How To Run Away From A Loan Shark In Singapore
January 5, 2023

In recent years, the Singapore government has been active in creating awareness of loan sharks. This is to protect its citizens from falling prey to these loan scammers.
Yet, there are still citizens borrowing from loan sharks. This is because not all borrowers have multiple borrowing options nor the necessary knowledge about loan sharks. So when desperate times hit, loan sharks become the best and perhaps only option available for such borrowers.
If you’re in such a situation, do note that dealing with a loan shark is illegal. Such engagements can also put you and your family in danger of verbal and physical harassment. So cut the cord before it gets to that.
In this post, we’ll tell you how to run away from loan shark and what to do if you and your family are harassed by loan sharks.
How To Know If You Are Dealing With A Loan Shark
The first step in how to run away from loan shark is to learn how to differentiate a legitimate lender from an illegal one.
The laws in Singapore have set specific guidelines on how licensed money lenders in Singapore should operate. Being unlicensed, loan sharks work outside the law.
As such, to identify a loan shark, take note of the following:
Mode Of Advertising
As per the law, a licensed money lender can only advertise its services through three channels:
- Its official website
- Consumer and business directories (print or media)
- Posters put up on the interior or exterior of its business premises
A loan shark or “Ah Long” does not follow these rules. As such, it will advertise its loans via:
- Text or WhatsApp messages
- Emails
- Flyers
- Phone calls
In essence, an “Ah Long” will advertise its loans through unlawful means. Of late, loan sharks have also become craftier as they employ different methods to build trust in unsuspecting victims.
Loan Amount
As shown in the table below, the law in Singapore stipulates how much you can borrow from a licensed money lender.
Annual Income | Maximum Loan Amount For Singapore Citizens And Permanent Residents | Maximum Loan Amount For Foreigners |
---|---|---|
Below $10,000 | $3,000 | $500 |
From $10,000 to $20,000 | $3,000 | $3,000 |
Above $20,000 | 6x their monthly income | 6x their monthly income |
This means you may not always get a higher loan amount when you need one.
However, loan sharks in Singapore promise to lend you any amount since they are not governed by the law. This can be two or three times higher than what you’d get from a licensed money lender.
Such amounts, along with the sky-high interest rates, will make it impossible for you to repay your loan. You may even be forced to borrow other loans to repay your loan with an “Ah Long”.
Interest Rates And Fees
In Singapore, the monthly interest rate that licensed money lenders can charge is capped at 4% per month. They can also charge the following fees:
- A maximum processing fee of 10% charged on the principal loan amount upon loan approval
- A maximum late monthly fee of $60
- Late interest capped at 4% per month
To maximise their profit, loan sharks in Singapore charge incredibly high interest rates of about 22%, which is more than four times higher than those charged by licensed money lenders. The processing and late fees charged will also be much higher.
You should also note that interest rates for loan sharks are subject to review with or without your consent. In addition, an “Ah Long” may also request that you make advance payment for the loan to be processed. Licensed money lenders never charge such fees.
In the end, you are likely to end up paying higher interest rates than the principal amount. This can easily lead you to a debt trap. You may be subject to harassment when you are unable to pay up.
If you are experiencing harassment or threats from a loan shark, reach out to the loan shark helpline in Singapore for professional assistance.
Remember that licensed money lenders cannot harass you for failed or delayed payments. However, some licensed money lenders may also go rogue, operate as illegal lenders, and harass you.
In such a case, cease communication with the lender immediately and file a licensed money lender harassment report with the Registry of Moneylenders so it can take appropriate action against the lender.
What Happens When You Don’t Pay A Loan Shark
Your first interactions with a loan shark will be smooth, and it will play friendly to get you to trust it. However, that friendliness will only last as long as you comply with the terms of the contract.
If you delay payment or fail to repay the loan, the loan sharks will turn aggressive and resort to abusive behavior to get you to repay the loan. Some will also increase the fees and rates charged on your loan.
This mistreatment is often verbal but can also turn physical. As such, avoid dealing with loan sharks at all costs.
Where To Get Help
If you’re already dealing with a loan shark and wondering how to solve loan shark problems in Singapore, you can reach out to these agencies for help:
- 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
You can also get counselling from these loan shark hotline agencies in Singapore, which will advise you on how best to manage your debt.
How To Deal With Loan Shark Harassment In Singapore
Let us now look at how to run away from loan shark and fight loan shark harassment in Singapore. If, for any reason, you get involved with an “Ah Long”, you can take the following steps to rectify the situation.
1. Check Its Legitimacy
As stated earlier, loan sharks have become craftier. Some will market themselves as licensed money lenders to make you trust them.
For those who don’t know much about the topic, it is easy to mistake a loan shark for a licensed lender. To avoid this, you must always check the legitimacy of the money lender. Look up the Ministry of Law’s list of licensed money lenders in Singapore online.
With this list, you can check whether the lender you are dealing with is licensed. Cross-check the information the lender provides, such as its business name, phone number, and address, with what is stated on the list. If the details are not a 100% match, the lender is most likely a loan shark.
However, as mentioned, there are also licensed money lenders who go rogue. They may be on the licensed money lenders’ list but still act outside the law, break the rules, and harass you.
The harassment can take the form of:
- Vandalism
- Verbal and physical abuse
- Damaging or destruction of property
- Stalking
In Singapore, such acts are against the law.
2. Make A Report To The Relevant Authorities
If you encounter any of the above treatment from a loan shark or licensed money lender, report them to the relevant authorities through the loan shark hotline in Singapore at 1800-924-5664.
You can lodge a complaint against the lender through the Registry of Moneylenders at 1800-2255-529.
You should also report and block any phone number or email address that calls, emails, or sends you text messages advertising loans or requests you to make loan repayments.
If they continue to harass you after you’ve filed your complaint, do not take further action – let the authorities handle the matter.
3. Cease Communication
Once you’ve done the above, you should cease any communication or interaction with the loan shark. This includes making loan repayments.
Since “Ah Longs” are operating illegally, failing to repay the loan is not illegal.
Punishment For Loan Sharks In Singapore
If you’re wondering whether it is an offence to borrow from a loan shark, the answer is yes.
Dealing with a loan shark is punishable by law under the Moneylenders Act. This means that if you assist a loan shark in laundering money through your bank account, advertising its loans, or harassing other borrowers, you can be jailed for up to four years or be fined up to $300,000.
Loan sharks can also receive higher fines and longer jail terms for offences such as harassment, abuse, violence, and destruction of property.
Lastly, on how to run away from a loan shark, if a loan shark is threatening you, report it to the relevant authorities in Singapore immediately.
Stay Vigilant Against Loan Sharks
Borrowing from a loan shark can make your life a misery. Loan sharks will charge you high rates and fees to maximise their profits. This can quickly get you stuck in a debt cycle.
You should take the necessary steps to avoid this. Only engage with licensed money lenders and know your rights as a borrower.
However, if you have already contacted an “Ah Long” and are wondering how to run away from loan shark, you should report the loan shark and cease any communication with it. Do not heed its threats and leave it to the authorities to handle the matter.
If you need urgent financial assistance, contact licensed money lender GS Credit, and our loan consultants will be glad to help. We abide by the rules in the Moneylenders Act and offer transparency, fast approval, and competitive rates.
Contact us now or apply for a loan today.