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.

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

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.

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

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.

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.