Fake Moneylenders: How They Trick You Into Believing Them

Fake Moneylenders: How They Trick You Into Believing Them

Due to the need to take loans to support the salaries that most Singaporeans earn, there has been an increase in the sources where you can go to take a loan. Among these are moneylenders. Moneylenders have always had a bad rap for being loan sharks and cheats, making people borrow from them without full disclosure of the terms and conditions of the loan, and then coming back to charge high-interest rates and even threatening the debtor. In October 2015, the Ministry of Law set down some rules and regulations that moneylenders had to follow if they wanted to remain in business.

  • All moneylenders have to be licensed and registered with the Ministry before they will be considered legal and allowed to work.
  • For both secured and unsecured loans, the interest rate is capped at 4%. If a loan is repaid late, an interest rate of 4% should be charged to the late payment.
  • Moneylenders are required to explain the terms and conditions of the loan to the customer in a language that the customer understands, and should give the customer their own copy of the terms and conditions for personal perusal and documentation.
  • No licensed moneylender will ask for your SingPass password. No moneylender is to keep your documents with them either.
  • The only fee a moneylender can charge you is 10% of the principal loan amount (administrative fee).
  • A moneylender shouldn’t charge you more than S$60 a month on late repayments.
  • Moneylenders should issue receipts with the proper signatures/stamps anytime you make a repayment.

Despite all these regulations put in place to curb illegal moneylending activity, illegal moneylenders still exist, and Singaporeans are still getting ripped off by them. One of the ways illegal moneylenders operate now is by stealing the advertisements of licensed moneylenders, and then affixing their own contact details on them. You or anyone took a loan from a fake moneylender, call that number and ask for a loan. And that is how the problems begin.

How Singaporeans Get Themselves Into Sticky Financial Situations

Cases abound of Singaporeans who fall into the traps of loan sharks disguised as licensed moneylenders. For instance:

  • A Singaporean, Mr Jack (not his real name), was really strapped for cash because his salary was not stable and he had a family to take care of. One day in January, he received an SMS offering him an instant cash loan without any fuss whatsoever (first red flag: no licensed moneylender will send YOU an SMS soliciting for business).He called the number but got no reply: two hours later, a Malaysian number called him, with the fluent, professional English speaker saying he was a staff of a registered moneylending institution. Jack said he needed a loan of S$2000, and the speaker asked for some documents to process the loan. Jack said he didn’t have those documents, but could he still get the loan?The speaker said yes (second red flag: you must provide documentation for them to see and verify before getting a loan), and asked for Jack’s SingPass login password (third red flag: no licensed moneylender needs your password for any reason).This password was used to find Jack’s residential address, and in a few hours, someone called him to meet on the void deck of the HDB flats where Jack lived. The visitor then called his boss, saying Jack was where he should be, and two hours later S$2000 was in his account. He didn’t have to present any documentation whatsoever.When he delayed in his repayments, things took a bad turn. He received threats on his life and that of his family, and, out of desperation, got more loans from moneylenders who had sent him SMSs (without meeting a single one of them). Jack’s debts ran up to S$12,000, and he didn’t know how he will pay all of that back.

This is just one instance; there are many of them, showing how anyone has taken loan from a fake moneylender, who isn’t actually licensed nor legal, rope themselves into financial problems with illegal moneylenders.

Fake Moneylenders: How They Trick You Into Believing Them

How A Loan Snowballs Into A Huge Debt

As in the example above, loans can metamorphose into huge debts when you keep borrowing to settle already existing debts, which all carry interest rates and a maximum time frame for repayment.

Also, when you borrow more than you earn per month/ per annum, it tends to be very difficult to repay loans with interest. Then you take another loan to settle the previous debt, and a different loan to settle that one, all with different interest rates, and that is how the debts just pile up till you don’t know what to do anymore.

What To Watch Out For In An Illegal Moneylender Pretending To Be A Legal One

  • All licensed moneylenders use only three mediums to advertise their business: business or consumer directories (print or media); websites (owned by the moneylender); and ads placed in, on, or around the moneylender’s building/place of business. Any moneylender who approaches you with a flyer, or uses emails, SMSs, radio or TV ads is not a legal moneylender.
  • A licensed moneylender will never send you an SMS soliciting for business.
  • A legal moneylender will always ask for your documents, including your income tax assessment records. Once they have gone through them, they will be returned to you.
  • A legal moneylender will always be courteous and patient, explaining every detail to you until certain that you understand. An illegal moneylender will definitely slip up on anyone of these points.

What To Do If You Really Need A Loan From Licensed Moneylender

The easiest thing to do is to check the Registry for the list of licensed moneylenders. Any moneylender not listed there is not licensed and, as such, not legal. Once you have checked the list, you can ask people around about the moneylenders you are considering: customer recommendations go a long way in helping you make the right decision.


It is easy to be duped into taken loans from fake licensed moneylenders in Singapore, and it is just as easy to avoid falling into that trap. To avoid running huge debts with high-interest rates, make sure you check the list of licensed moneylenders before approaching any moneylender for a loan.

Choosing The Best And Reputable Licensed Money Lenders In Singapore

Choosing The Best And Reputable Licensed Money Lenders In Singapore

In Singapore, there are various types of financial institutions that offer financial services. A moneylender is an organization or a group of people who have a clear mandate to offer moneylending services. Moneylending entities make small personal loans accessible to individuals who have a limited access to banking institutions. Depending on your financial obligations and needs, the choice of a reliable moneylender in Singapore is very important. Different money lending institutions offer different financial loans.

Singaporean money lending institutions are licensed by the Registrar of Money lenders and are bound by rules and regulations that ensure they follow all moneylending and financial institutions laws. Moneylenders in Singapore are given a limit on the highest amount of money they can lend to individuals and the interest rates to charge.

Moneylenders should also have a clear loan application process as well as offer its customer all the necessary information they need before taking any loans. Borrowers are advised to take loans from licensed money lenders and to ensure their loans forms show details like the loan repayment period, the interest rate, repayment schedule and the legal undertaking when the borrower defaults.

Choosing The Best And Reputable Licensed Money Lenders In Singapore

The Past Stigma From Borrowing From Moneylender 

In the past, moneylenders were believed to have been charging borrowers very high-interest rates. Some also were for the idea that moneylenders were only taking advantage of people by making the repayments made to only offset the interest on the principal amount taken. In the past money, lenders were thought to be too quick in hiring debt collectors; the debt collectors are known for the tactics they use that are mostly aimed at embarrassing and eventually affecting an individual s career prospects.

However, a lot has changed in the recent past. Moneylenders are now recognised by the Singaporean Registrar of Moneylenders, for their financial services they offer to individuals and are issued with licenses before they start their operations.

Rules and regulations have been put in place to help govern their operations, therefore, ensuring they are at par with the other existing banking and financial institutions. Interest rates have been regulated by the maximum amount they can lend out has been set.

Transparency of the loan process has been put in place and money lenders are required to give borrowers all the necessary information they need to ensure there are no hidden charges.

How Moneylenders Work

After you have identified a moneylender, it is necessary you go through the loan application process. The loan application is simple and can be done in person at the lender’s offices or online through their platform. What you require as a borrower is to present relevant personal information like contacts details, current payslip, employment status and all the supporting documentations that the lenders need before processing your loan application.

With the proper documentation, your personal or payday loan will be approved immediately in a matter of minutes.

Licensed moneylenders have a variety of loan packages that they offer potential borrowers. Loans that can be accessed through the money lenders include payday loans, personal loans, foreigner loans as well as other choices that will suit your financials needs.

Do Your Homework And Research To Find The Most Suitable Moneylender

Before taking any loan, ensure to shop around for the most suitable moneylender for your financial needs. Read through the interest rates and penalty clauses as well as any other additional fees to be familiar with what you are getting yourself into before signing. Ensure you are able to make regular loan repayments on the agreed upon date to avoid defaulting charges.

Be sure to check the validity of the money lender’s license to confirm they are registered under the Registrar of Money Lenders. Ensure you understand the stipulated terms of the loan application form and when uncertain ask for clarification on the terms and details of the loan.

Consult a lawyer to help further explain the consequences of defaulting that you may face. When the terms are not satisfactory to you, you can opt to work with a different licensed lender who offers the best loan terms to meet your needs.

  • Protect Your Rights (Know The Legal Interest Rates They Can Charge)
    Borrowers are cautioned to first confirm the interest rates being offered by the accredited money-lender before settling for a payday loan or a personal loan. This will help when you are comparing guideline and rates to help pick the terms offered, that best meet your financial situation.
  • Pick Someone Who Does Not Sell You But Genuinely Wants To Help You
    Pick a moneylender who offers you the lowest possible rate, and a convenient repayment period. The repayment amount should also be affordable for you and not cause you more financial strain.
  • Ask Around For Recommendation
    The Ministry of law keeps an updated list of the licensed money lenders in Singapore, which is a good resource when you are shopping around for a suitable moneylender for your financial needs. These institutions hold legal and updated licenses as stipulated by the Registrar of Money Lenders.
  • Approach A Few Moneylenders Before Picking The Best One
    Approach a few moneylenders and, compare their interest rates they offer to help you pick the one with the most favourable terms to fit your budget.
  • Person Serving You Should Go Through Terms And Conditions As Well As Work Out The Interest Rates In Front Of You
    Ensure the person handling your loan application clarifies for you the conditions and terms of the loan you are applying for. Let them also go through how the interest rates have been worked out in front of you. This way you will confirm the rates offered and the repayment period based on the calculations hence no room for hidden charges.Ensure you understand your needs, terms, and conditions of the loan contract before signing it. Bear in mind you are duty-bound by law to honour terms of the contract once you sign.


Moneylenders in Singapore are an alternative access to fast cash for individuals who are unable to get loans from banks. Reliable moneylenders in Singapore ensure after receiving all the required documentations, your loan application is approved within minutes. These institutions ensure fast cash is availed to you to help resolve your financial emergency, thus giving you peace of mind.

Before applying for a loan from any moneylender, ensure you do your research and shop around for the moneylender, who will offer you the best rates in the market as well as a comfortable repayment period without straining you financially.

Beware That Your Helper Can Borrow Money From Loan Sharks And Leave You With The Debt

Beware That Your Helper Can Borrow Money From Loan Sharks And Leave You With The Debt

Moneylending is a legitimate business in Singapore with an illegal twist to it. Loan sharks parade around as moneylenders, offering you loans without full disclosure of the terms and conditions of the loan, and when you default on your payments they hound you, calling and texting and threatening, and their interest rates can increase to outrageous percentages on a daily basis.

Even though there are strict laws that govern moneylending activities, people still fall prey to the loan sharks in Singapore, and this shouldn’t be so. One of such examples is that of maids, or your domestic helper borrowing money from loan sharks and implicating you in the debt. Yes, this is a thing: your maid can use your name and number and take a loan, and when it is time to repay, you get saddled with the debt, because you unknowingly became her debt guarantor.

Domestic Helper In Singapore

Having a domestic helper or maid in Singapore is actually a very normal thing, especially when you have a very busy schedule and neither you nor your partner (if any) has the time to take care of the house and cook meals after hours at work. You can get a domestic helper for part-time or full-time, depending on your needs and wants.

A part-time helper is one who has keys to your flat or apartment and comes in a couple of days a week to clean, cook and stock your refrigerator with groceries. Part-time helpers are relatively cheaper than full-time helpers.

A full-time helper, usually called a foreign domestic helper and the person must be living in Singapore for the sole purpose of being a full-time domestic helper. She must live in your house, which means that you have to provide them with spacious accommodations in your house, such as a large enough room that has a bathroom. You are also responsible for their meals, health care, and a return trip ticket to their country of origin (as stated on their record).

You are required to pay a monthly fee of S$265 to the Singaporean government to buy a bond that will cover the fees if your helper decides to run away. Helpers tend to run away when they have been mistreated by their bosses, and sometimes it is this poor treatment that makes them borrow from loan sharks and saddle you with the debt.

Beware That Your Helper Can Borrow Money From Loan Sharks And Leave You With The Debt

How To Prevent Them Borrowing From Loan Sharks

Some foreign domestic helpers may have an actual need for the money and unknowingly borrow from loan sharks in Singapore, thinking that their wages will be enough to cover the loan, and that is when they find out that they have been swindled. You can prevent this by taking the following steps:

  • Educate Them To Be Honest With You
    Encourage honesty between you and your domestic helper. You can do this by showing them that they can trust you; being nice to them, and being willing to listen to what they have to say. Some employers treat their maids as though they are not intelligent enough to have an opinion, and this is just wrong. Treat them as you would want to be treated in their position, and they will be honest and open with you.
  • Educate Them About Loan Sharks And Illegal Moneylenders
    Make sure they know about loan sharks and unlicensed moneylenders and how to identify them. They should not reply any messages telling them to take instant cash loans without documentation.
  • Legalised Moneylenders
    Tell them they should approach legal moneylenders and offer to go with them if there is a need. They can access a list of legal, licensed moneylenders in the Registry. Let your domestic helper understand the dire consequences if they loan from illegal moneylenders.
  • Keep Your Identity Card And Letters/ Bills Safe
    Loan sharks will ask your domestic helper for your SingPass login password so as to verify your address: she should not give it to them. Don’t leave your SingPass letters or bills with your personal information lying around in the house, neither should you leave your NRIC unlocked. This will prevent a temptation to steal your identity and take out a loan under your name or unnecessary embroil you as a guarantor.
  • Educate Them To Avoid Talking To Strangers And Providing Personal Details
    Emphasize the importance of keeping private details private. Do not disclose any personal information to people she does not know, or people of questionable character.

What To Do If Your Domestic Helper Borrows From Loan Sharks

If your domestic helper or maid approaches you and tells you that they have borrowed money from a loan shark, do not go off the bat making unfounded accusations. Keep a calm, level head and sit them down.

Ask them when and how the transaction took place, what information they gave to the loan sharks, and how much is in involved. Once you have all the information necessary, do not waste any time in doing the following:

  • Report To The Police
    They may not follow up immediately, but file a complaint with them anyway.
  • Report To MAS
    The Ministry is highly against illegal loan shark activity in Singapore, and reporting them will put them on the lookout for the loan sharks.
  • Change You And Your Helper’s Phone Numbers
    Immediately change your phone numbers. Without a number to reach either of you on, the loan shark will be deterred in his quest to fleece you for money.
  • Install CCTV
    Install a security camera will either deter loan sharks from harassing your family or capture them in action. This additional evidence can help the police in capturing the criminals.

Having a domestic helper in Singapore is a good idea if you need one and you know that you can adequately provide for them. While they may have needs that require additional finances, encouraging honesty and openness will deter them from going to loan sharks to get loans. Educate your domestic helper on the availability of legal, licensed moneylenders in Singapore, and they can easily find them by looking at the Registry for the list of licensed moneylenders in Singapore, then they can approach a few to see about getting a loan without leaving you indebted to loan sharks.

Where To Get The Best Instant Cash Loan In Singapore

Where To Get The Best Instant Cash Loan In Singapore

Taking loans in Singapore is now a very common occurrence. The need for instant cash is ever increasing, for any number of reasons; and if you live in the city-state of Singapore, you will need to take loans for various reasons (unless you fall in that small percentile that earns enough money to handle all of their needs without needing loans).

There are many sources now where you can go to get an instant cash loan in Singapore that does not include family and friends: all you need to do is verify that they are legitimate so that you don’t get ripped off with high-interest rates and the like.

Reasons Why Singaporeans Need Instant Cash Loans

As said earlier, there are several reasons why you would need an instant cash loan in Singapore. Such as:

  • Emergency Bills
    While Singapore may have the best healthcare system in Asia Pacific, your health insurance may not cover everything when your health bills come. Not just health bills, but you may need emergency funds for other unplanned for circumstances. If you do not have funds set aside for these emergencies, you will need to get an instant cash loan.
  • Business
    Your need for instant cash may come when you want to start a business, or pay the rent, or pay your staff their monthly wages. If you are experiencing a low revenue income, you can get an instant cash loan to tide you over while you wait for the revenue stream to become greater.
  • Credit Card Debts
    Since the economy has grown more and more cashless, acquiring debts on your credit cards tends to happen more often than not. Paying off your credit card debts quickly is always a good idea, and is highly advised because the interest rates on those debts are quite high. Taking an instant cash loan with low-interest rates will go a long way in clearing your credit card debts.
  • Purchasing Luxury Items
    Buying luxury items may also require cash, and you might really want to buy it before the item runs out of stock. Sometimes these luxury items are second-hand items, so cash is always preferable to credit cards. If you do not have the money at the moment, you can take out an instant cash loan to purchase the luxury goods before you lose the opportunity to do so.
  • Investment
    Investments are usually solid ways of saving your money and gaining some interest on it. Really good investment opportunities are not easy to come by, and once you hear about one, it is usually a good idea to get your money and invest. What if you don’t have the money ready for that; or the money available is being kept for something else? Take an instant cash loan and make the investment: you will be able to pay back the loan with money to spare.
  • Dream Vacation
    So you are in dire need of a vacation, but you can’t seem to spare the money for a trip to Thailand? Take an instant cash loan. That trip will help you emotionally and mentally, soothing your stressed and frazzled nerves so that, when you return to work after a week off, you will be refreshed and on your ‘A’ game.
  • Gambling Habits
    Gambling is one of the quickest ways to gain lots of money off of a lesser amount put in. Gambling is also a quick way to lose lots of money in the space of minutes. For some, gambling is an active hobby, which means that they constantly need huge sums of money on hand. Instant cash loans can help with this, but it is not advisable.

Where To Get The Best Instant Cash Loan In Singapore

Bank vs. Pawnshop vs. Moneylender

If you are thinking of places to get instant cash loans in Singapore, there are three places that you can go that are legitimate and you are sure of getting your money.

  • Banks
    Getting a loan from a bank in Singapore is a long, tasking process. Banks have to very careful when giving out loans, so they have to cover all their bases. Banks go over your financial history to determine if you will be able to pay back the loan, and they need to view all your documents before they can deem you fit for a loan –bonus for you if you are an account holder with the bank you are requesting a loan from.Banks require collateral for their loans, and you are required to repay the loan anytime from 3 years to 7 years, with high-interest rates and stringent terms and conditions. As for time of disbursement, you will get your loan in a week, which may not be ideal if your need is very urgent.
  • Pawnshop
    Typically found near MRT stations and connecting bus stations, pawnshops have been around for a long time, and are renowned for their quick loan disbursements and hasty transactions. The only collateral they accept is luxury watches, bags, and other valuable jewellery. You will also need to show them some valid identification.Pawnshop loans only have a maximum term of 6 months, and the interest rate increases every month. Failure to repay the loan transfers ownership of the collateral to the pawnbroker.
  • Moneylender
    Once a very mistrusted source of loans, moneylenders are gaining prominence in the loan-taking scene in Singapore. With a governmental body governing their activities, moneylenders have a maximum interest rate of 4% on all loans. The process of getting a loan is very short: just present some documents and you can get your loan, without collateral. For your interest and protection, however, make sure you check the list of licensed moneylenders before transacting with any of them and make sure you understand the terms and conditions of the loan before you take it.

Getting instant cash loans in Singapore is easier than ever, and you can take a loan for whatever reason, as long as it is a pressing need. If you are tired of asking family and friends for loans, you can go to a bank, a pawnshop, or a moneylender, and you are sure to get the amount you want, as long as you meet all specified requirements.

Things You Should Be Careful About When Taking A Credit Card Cash Advance

Things You Should Be Careful About When Taking A Credit Card Cash Advance

Cash advance is the process of obtaining cash through the use of a credit card. The credit card cash advance service is provided by charge and credit card issuers. This credit service allows a cardholder to withdraw cash either over the counter or through an ATM up to a set limit. For credit cards, this is called the credit limit. Credit cash advances mostly incur very high-interest rates and it often compounds each day starting from the day you borrowed the cash. Advances made on a credit card are often higher than other transactions made with the credit card.

Credit card cash advances are short term loans that are taken against your credit card. Here individuals use credit cards instead of debit cards to access this loan facility. Although taking credit card cash advance is very easy, they are a very costly form of loan since they have a variety of fees and expenses that a regular ATM withdrawal does not have. The credit card cash advance usually does not carry a grace period meaning that the repayment is best done as soon as possible.

Before using the credit card cash advance, borrowers are often advised to consider other alternatives to getting the money they require. As a borrower, always consider the high-interest rates charged on the credit card cash advance which in the end negates all the short term benefits you are to get from the advance.

Things You Should Be Careful About When Taking A Credit Card Cash Advance

Who Needs Credit Card Cash Advance

Individuals who wish to buy gift cards online using PayPal for their loved ones could use a credit card cash advance as a safe way of shopping online. Purchases that are categorized as cash advances are often treated as credit card cash advances. Some of the purchases that banks consider as credit card cash advances even when you did not take the cash include; travellers’ checks and money orders, lottery tickets, foreign currency, casino gambling chips as well as transferring funds to a PayPal account.

A credit card cash advance can also be used by an individual who has no access to hard cash when making purchases where plastic money is not accepted, like the farmers market.

How Credit Card Cash Advance Works

Usually, when taking a credit card cash advance, you are required to pay an upfront and hidden fee charged at 6% of the borrowed amount. The credit card cash advance can be accessed from an ATM or over the counter. To obtain a credit cash advance from ATM, you will need a PIN. When your account does not have a PIN set, contacting the customer care service of the card issuer will help you get the PIN. As soon as you get your account’s PIN, withdrawal of the money will be as when using a debit card.

Things You Should Be Careful About When Taking A Cash Advance

When you use your credit card to make any minimum payments, the money is applied to purchases you made. This is so since many credit card providers channel minimum payments to items that attract lower interest rates. This means you are not able to ask that the funds be used to pay off your credit card advance before clearing your purchases. Nonetheless, the law stipulates that any payment that is over and above the minimum has to be channelled towards the highest APR balance.

Therefore it is advisable for a borrower accessing the credit card cash advance is to ensure that the next payment they make be the minimum amount plus the credit card cash advance. When possible it is best to pay off the entire amount in a single payment.

How It Is Better To Take A Payday Loan From A Legalized Moneylender

When in need of emergency funds, payday loans prove to be a reliable source of quick cash at a lower interest rate. The repayment period of the loan amount taken is often based on the outlined repayment schedule in the loan contract. This gives the loan repayment a grace period which causes ease in repayment of any loan taken by a borrower.

Payday loan requires a minimum criterion to enable approval. This includes age, proof of income and residency. Once you have applied for a payday loan the licensed moneylender often contacts you within 5 minutes and the money is transferred to your account within hours after you have submitted your application.

A payday loan is a form of a short term loan which helps you take care of your emergency financial commitments. The payday loan requires that you repay it quickly leaving you with no debt to be troubled about. This loan type is often tailored to your ability to pay it back within a set timeframe. Payday loans can be negotiable and the repayment plan adjusted to best suit the borrower’s budget. This helps greatly in terms of managing your finances since you are in a position to plan your finances.

Payday loans have simple policies on the rates offered. There is only one interest rate charged on the principal amount with no hidden charges. Payday loans offer flexibility in the repayment policy and when considering the repayment period, the payday loan is better than getting a credit card cash advance that has no grace period. Payday loans also allow low-income earners who have no access to a credit card to use this service.

When making consideration to take any type of loan, ensure you do your research prior to committing to one loan. Ensure you familiarize yourself with the interest rates charged, your ability to repay and the repayment period on the loan contract.


Cash advance is easily accessible through credit cards. However, a borrower finds himself in the endless cycle of snowball debt as he can always keep borrowing from his credit cards to roll over his debts. Once you have applied for a credit card cash advance, money is immediately made available to you. At the same time, the interest charged on the advance come into effect as soon as you receive the money. Credit cards issuers often channel funds lower than the minimum payment to items with lower interest. In order to overcome this snowballing effect, ensure that you make minimum payments plus the credit card advance or better clear-off the loan amount plus the interest accrued.

My Friend Asked Me To Be A Surety: What I Need To Know To Protect Myself

Licensed moneylenders are in the business of lending money both to individuals and businesses. When they give money, they need to be very sure that the money they are giving will be repaid together with interest.

The truth is that every time a money lender lends money, he is risking losing the money. This is because the future is very unpredictable, they can lend money to an individual or business today, and that person loses his job or the business fall.

To minimize making a loss, money lenders insist that a person or business person who borrows money provides a surety/guarantor for the loan taken. Who is a guarantor then?

A surety is a third party who promises to pay back the money borrowed plus interest even if the business fails or the individual loses his job or becomes bankrupt.

Types of Surety

  • Personal Surety – this is when the person taking a loan takes full responsibility for the repayment of the loan.
  • Third party Surety – this is when the person taking a loan finds either a friend or relative who agrees taking full liability for the repayment of the debt.
  • Collateral – the individual taking the loan raises sufficient collateral/property which in case he fails to repay the loan, the property can be sold to raise the money plus interest.

Things to Consider

Before you agree to become a surety for your friend, please make sure that:

  1. You understand your responsibilities as a guarantor;
  2. You get a photocopy of the Contract at the time that the loan is issued. Ensure that you keep a record. Always maintain the copies of the Contract that you signed as a surety. Also, ensure that you keep track of the loan’s repayment and correspondence;
  3. Ensure that the document states the amount of money and a clause which says that the money and interest is valid for only the duration of the loan;
  4. The moneylender has explained the terms in the Contract in a language that you understand;
  5. The moneylender does not withhold your NRIC card or any other personal ID documents (e.g. driver’s license, passport).
  6. The moneylender does not acquire any information that contains passwords to your user accounts (e.g. Singpass account, Internet banking account, email account).

Effects of Being a Surety

If under any circumstances a borrower fails to repay the loan, as his surety, you will end up:

  • Paying the loan requirements
  • Paying late charges
  • Paying legal fee charges and other duties.
  • The unpaid debt will reflect on your credit rating as a bad debtor.

How to Protect Yourself as a Surety

Before you sign as a surety, here is how you can protect yourself:

  1. Seek the moneylender’s signed agreement that you will not be required to pay for the loan until the original borrower is unable to repay the loan
  2. Seek a signed agreement that will only make you liable only to the unpaid principal
  3. Once the loan has been granted, ensure that you monitor the payment responsibility of your friend/relative.

Consult your lawyer before signing as a surety and when the borrower proves irresponsible.

What Factors Do I Take Into Account Before I Consider Applying For A Loan?

Before you consider taking a loan, be it for education, a house, or for hospital bills, you need to consider a few factors first.

There are several institutions in Singapore where you can go to borrow money for whatever reason you have, but you need to be smart about it, so as to best protect your interests. Banks, house loans, and moneylenders are all sources of loans. If you want to get a loan quickly and with little fuss, a moneylender would be your best bet.

However, moneylenders get a bad rep when it comes to their contracts, fees, and interest rates, despite the fact that the Ministry of Law has set up rules and regulations to make sure that their dealings are straightforward and cost effective.

  1. Study other agencies that offer loans before you settle on the moneylender. There are several options available, including financial assistance programs that are granted by government agencies. You can contact these agencies directly and find out about the schemes they have available, and which is most appropriate for you and your needs.
  2. If you have decided to go with a moneylender, make sure that they are licensed. You can check the list of licensed Singapore moneylenders to know who is and who isn’t legitimate.
  3. Not all moneylenders have the same terms and conditions. Check several moneylenders to know their policies, their terms and conditions, before settling on one. Taking a loan is not a decision to be rushed into, so take your time and do your research.
  4. The moneylender should give you a copy of the loan contract once you apply for a loan. This contract is important so that you will know what their terms are for repayments and the like.
  5. The moneylender should be able to explain the contract to you in words you can understand. The terms and conditions, repayment schemes, late fees, interest rates, and other fees need to be clearly explained to you while you go over the contract.
  6. Go over every minute detail in the contract before taking a loan. Make sure you understand everything stipulated in it and ask for clarification when you don’t understand any detail. Even though the Ministry of Law is making great strides in monitoring the activities of moneylenders, some unscrupulous elements still slip through the cracks, and it will be up to you catch them to justice. If you get into even more financial trouble after agreeing to a contract you did not understand, you would be the one to blame. Be on your guard.

Know your credit score, your income, your expenditure, and everything about your financial status. This is so as to ensure that you can actually work according to the terms of training loan contract you are taking. If the contract stipulates a monthly repayment of S$500 at the beginning of the month, while you collect a paycheck of S$500 at the end of every month, those terms may not be ones you can fulfill. Be sure that you can abide by the terms stated in a loan contract before you take it.

What Are The Interest Rates Moneylenders Can Charge?

When you have a pressing financial need, and you have no immediate way to address that need, you can always take a loan. Taking loans in Singapore is usually viewed as very easy or very difficult, but it all depends on what factors have forced you to take a loan, the lending institution you decide to borrow from, the terms of the contract of that loan, and the interests rates.

Moneylending is a legitimate part of Singapore’s consumer credit market, and licensed money lenders can provide loans to you if you need them. Rules have been put in place to monitor the activity of moneylenders, ensuring that they do not over charge customers on interest rates or applicable fees on loans.  Though moneylenders make up a small percentage of the credit market in Singapore, they have been known to bind customers in unfair contracts and charge high interest rates on loans.

The Singapore government has cracked down hard on moneylenders, and though the rules are less strict than they were some years ago, they are still in place to ensure that money lenders conduct fair business with their customers, and you, the person taking the loan, don’t get over charged on it.

Interest Rates of Moneylenders

First of all, you need to understand that there are two types of loans: secured loans and unsecured loans.

  • Secured loans are those which you get after putting up collateral, such as your car title, your house title, etc.
  • Unsecured loans are those that you get without putting up collateral but on the basis of your credit score. A good credit score will vouch for your ability to pay back the loan, while a bad credit score will discourage the moneylenders from approving your loan request.

Moneylenders in Singapore, as of 2015, have been mandated to calculate and share with you, the customer, the Effective Interest Rate of the loan you want to take before they give it to you. Effective Interest Rate (EIR) is computed by considering the total effect of frequent loan payments in a period of one year. The EIR is an interest system that best reflects the true cost of taking a loan in a one-year period.
With this in mind, for loans that had been contracted between June 2012 and September 2015,

  1. If you earn an annual salary of less than S$30,000, you can be charged a 13% EIR for secured loans
  2. If you earn an annual salary of less than S$30,000, you can be charged a 20% EIR for unsecured loans.
  3. As of October 2015, however, moneylenders are required to cap their interest rates at 4% a month, irrespective of the customers’ annual income, and irrespective of whether the loan is secured or unsecured.
  4. If you default in repaying your loan, the maximum interest rate that moneylenders can charge you is 4% a month.

The Interest you incur on late repayments is only applicable to the amount you haven’t paid. If you skipped paying for a month, the interest for late payments is charged on the month you skipped.

How Can I Tell Whether An Advertisement Is From A Licensed Moneylender Or An Unlicensed Moneylender?

Advertisements are a medium we use to let people know that we can fulfill certain needs and demands for them. With advertisements, you can tell what a particular company or organization can offer you and at what price. What you might not be able to tell from an advertisement is whether that company is legitimate.
Moneylending is a booming business in Singapore, and many people want to get in on the action. It can be difficult to separate the licensed moneylenders from the unlicensed money lenders, especially since even the licensed moneylenders tend to contravene the law as well. Before you can tell if you are seeing a licensed or an unlicensed advertisement, you need to be able to tell the difference between the two types of moneylenders.


What Is The Difference Between A Licensed And An Unlicensed Moneylender?

The easiest way to differentiate between the two types of moneylenders is to check the list of moneylenders at https://www.mlaw.gov.sg/content/rom. All licensed can be found on that site. However, it would be a good idea to avoid and report any moneylenders who:

  1. Exhibits threatening behavior towards you.
  2. Very rude and abusive
  3. Gives you a loan without following due processes, such as calling you on your cellphone and sending you an SMS to confirm your numbers and your loan application.
  4. Gives you a loan without collecting all the required documents from you, such as your income tax assessment documents.
  5. Keeps any of your personal identification documents such as your driver’s license, passport, etc.
  6. Gives you a loan without fully or clearly explaining the terms of the loan contract.
  7. Whether they are licensed or not, this is unprofessional and unlawful behavior and needs to be reported.

Moneylending Advertisements

No matter what advertisement you receive, you need to verify the information by contacting the persons behind that ad before doing business with them. Anyone can advertise one thing and do or say another.
As of 2011, advertising laws expressly state that licensed moneylenders can only advertise through three mediums:

  • Business or consumer directories – these can be print or online media
  • Websites owned by the licensed moneylender
  • Advertisements placed in, on, or around the moneylender’s place of business.

All other forms of advertisements are prohibited, including flyers, emails, messages, radio or TV ads, etc.
As such, if someone were to approach you as a moneylender with a flyer advertising their loan interest rates, they are either unlicensed or are shady licensed moneylenders. Do not respond to such advertisements, but do try to report them to the Registry, or report possible loan sharks to the police.

You should also know that it is not advisable to rely solely on the content of an advertisement from a moneylender. The advertisement is meant to make them look good, to draw you in and do business with them by taking a loan.

Once you see an ad from a moneylender, do your research. Ask around to find out more about them, get more clarification on their contract terms, and ensure that everything they do is above board before signing up with a moneylender.

6 Things To Consider Before Getting Your First Personal Loan

Taking a loan in Singapore is a normal occurrence, depending on your reason for taking that loan. There are any number of reasons you might want to take a loan, such as for a wedding, for tuition, for a house, or for a vacation, but this loan also depends on some other factors that you have to take note of.
Should you take a loan from a bank? Should you take a loan from HDB? Should you go to the moneylenders? What are their interest rates?
These days it seems taking a loan in Singapore has more cons than it has pros, so it is necessary to think of the following before going to take a personal loan.


6 Things to Consider before Taking Any Loan

  • Think of the alternatives. In Singapore, you can take a personal loan from money lenders, from banks, or from other lending institutions. There is several financial assistance schemes set up by different government agencies that could also be of benefit to you. Make sure you consider all alternatives before settling on one source of loan.


  • Any contract you enter with any lending company is binding and legal. So, if you decide to take a loan from a moneylender, read the fine print. Moneylenders are a legal lending institution in Singapore, and their contracts with you are binding on both parties involved.


  • Be careful to borrow only what you can pay back. This means that you have to consider your monthly/annual income, are your budget, and decide how much you can pay back at the end of every month. In the contract you enter with the lender, there could be a stipulated amount to be paid at a specific time every month. Failure to meet these payments as when due will incur high interest, and add to your financial woes.


  • Consider the flexibility of the contract. Will it allow you to make late payments due to some unforeseen circumstances? A good personal loan contract will have options in it that will allow you to renegotiate your contract with the lender. These terms could include increasing the amount of time needed for each payment, reducing the interest rate on your loan, or even increasing the amount of your loan.


  • Read and understand the loan contract you are getting into before agreeing to it. By law, moneylenders in Singapore are required to explain the terms of the contract to you in very clear terms, and they are also to give you a copy of the contract. Take your time to go over this contract, noting the interest rates, the repayment plans, and other terms like the applicable fees.


  • Do not agree to any contractual terms that may give the lender the opportunity to lodge a caveat on the proceeds the sale of your property when you have been unable to repay your loan. Think carefully about this before agreeing to it, because it is either you have to pay back your loan before you can sell the property, or the lender will take their repayment from the proceeds of the sale, leaving you with very little money to have.

Knowing what you are getting yourself into is the first step in finance responsibility. Only borrow from legit financial institute and never from illegal loan sharks to save yourself the hassle and the pain!