Is It An Offence To Borrow From Loan Sharks In Singapore?

LifestyleLoansPersonal Finance

Is It An Offence To Borrow From Loan Sharks In Singapore?

August 4, 2022

Money is a crucial part of our lives, and sometimes we may find ourselves in a situation where we need to borrow money from a loan shark.

But before you do so, it’s essential to understand the risks involved and whether or not it’s legal to borrow from loan sharks in Singapore.

In this blog post, we will explore the legality of borrowing from unlicensed money lenders in Singapore and what you can do if you fall victim to one.

What Are Loan Sharks?

Unlicensed lenders that demand high-interest rates are referred to as loan sharks. Loan sharks, unlike professional loan providers, are unlawful and unregulated, placing anybody who deals with them in danger of nasty methods and untrustworthy loan agreements. In order to collect their loans, many loan sharks use harassing and intimidation tactics. Most significantly, under Singapore’s Moneylenders Act, loan sharks are not authorized by the government to lend money, and hence borrowing money from them is illegal.

Why You Should Not Borrow From Loan Sharks

Borrowing from a licensed money lender or another legal funding source is a far safer option if you require financial assistance.

But sometimes, you may need a quick loan at very short notice and find yourself wondering if you should borrow from a loan shark or not.

That said, borrowing from loan sharks in Singapore is always a bad idea. Here are some ways you can spot a loan shark.

Loan Sharks Offer Enticing Terms To Trap You

Loan sharks are everywhere in Singapore. They’ll send you SMSes, WhatsApp messages, emails, and flyers offering easy loans with no questions. However, these offers are not as straightforward as they seem because they are all traps set by loan sharks to lure you and more victims to sign up for their loans with sky-high interest rates.

They Charge Exorbitant Interest Rates

A major reason why you should never borrow from loan sharks is because they charge exorbitant interest rates.

The average illegal moneylender Singapore charges between 20% to 60% per month. This means if you borrow S$100 from a loan shark, you will need to repay S$120 to $160 within one month.

This is an incredibly high interest rate and not sustainable in the long run. If you cannot repay the loan on time, you will be charged even higher interest rates, which can quickly spiral out of control.

Loan Sharks Will Ask You For Money Before Processing Your Loan

Loan sharks trap their victims by asking for money upfront before they process your loan. They will claim that the purpose of the money is to cover administrative fees or insurance.

However, once you have paid them the amount, you will never hear from them again.

They Will Approve Your Loan Remotely

Loan sharks will convince you that it’s unnecessary to go into their office and fill out any paperwork.

However, once you send them money (even via online banking), they will start calling and demanding payment.

They will also resort to using illegal methods to collect their debts if you do not pay up.

They Do Not Provide Loan Contracts

When you borrow money from a licensed money lender, you will be given a copy of the loan contract that outlines the terms and conditions of the loan, including the interest rate and repayment period.

However, unlicensed money lenders and loan sharks do not provide loan contracts because they are operating illegally. It means you will not have any legal protection if things go wrong.

They Offer You A Loan Without Checking Your Income

Loan sharks will offer you a loan without checking your income first because they only care about how much money they can get from you after you borrow from them.

This can lead to financial ruin if you cannot repay the loan on time.

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Methods of Harassment by Loan Sharks

In Singapore, loan sharks are known to resort to methods of harassment to collect on debts. These include:

Sending Threatening Messages

Loan sharks often send their victims threatening messages to scare them into paying up. They can send these messages via SMS, WhatsApp, emails, or even flyers. The loan sharks will often include their contact information and a demand for payment.

Making Phone Calls To Threaten Or Intimidate

Loan sharks will use every opportunity to harass their victims into paying up. They might call you repeatedly, day or night.

This means those who owe them money will find themselves getting collection calls at any time of the day until they pay up.

Showing Up At Your Home Or Workplace

Loan sharks know that if they show up at your home, you will find it tough to refuse their request. They might also follow or wait for you outside your workplace to intimidate and frighten you.

Damaging Your Property

Loan sharks will go to any lengths to get you to pay up, including damaging your property. They might spray paint or break into your home or even wreck your car.

Assaulting Or Harming You Or Your Family Members

Loan sharks will not hesitate to resort to violence if they feel it is necessary. They might threaten or assault you or your family members to get back the money they are owed.

How to Deal With Loan Shark Harassment

Loan sharks are likely to harass you day and night if you fail to repay your loan on time. Here are a few things that you can do to stop the harassment.

Call The Police

If loan sharks are harassing you, the first thing that you should do is to contact the police. The police will be able to investigate the matter and take appropriate action against the loan sharks.

Do Not Give In to Their Threats And Demands

Loan sharks are known to resort to methods of harassment to collect debts. However, try to stay calm and not yield to their threats and harassment.

If you give in to their demands, they will continue to harass you for more money. Contact the police for help.

Keep Evidence Of The Harassment

Retain all evidence of the harassment so that you can use it as evidence in court, including:

  • Emails sent or received by you (both incoming and outgoing)
  • Text messages sent from/to your number, including those related to work situations
  • Voice recordings were made on phones where you were targeted at your residence
  • Photos/videos taken directly of camera surveillance systems fitted within buildings

Getting a medical report is essential if you also have any physical injuries because it will help prove your case in court.

Seek Other Avenues

You can also contact these helplines:

  • ComCare: 1800-222-0000 (
  • X-Ah Long Hotline: 1800-924-5664
  • Registry of Moneylenders: 1800-2255-529

What Is The Loan Shark Helpline?

The Loan Shark Helpline is a service set up by the Singapore Government to help people who have borrowed money from loan sharks. The helpline provides advice and support to loan shark victims and allows them to report loan shark activity.

It also works with the police and other agencies to investigate loan shark cases and track down loan sharks.

In addition, the helpline provides information about how to avoid becoming a victim of loan sharks and raises awareness of the problem.

The Loan Shark Helpline Singapore is a valuable resource for anyone who has been affected by loan sharks or wants to avoid becoming a victim in the future.

If you have any information about loan shark activities, you can call the Loan Shark Helpline at 1800-233-0000 or SMS/MMS to 7469 0000.

You can also email them at [email protected]. All information will be kept confidential, allowing public members to report loan shark harassment cases anonymously.

If you need a loan urgently, apply for one with Credit Thirty3 here or talk to any of our friendly and experienced consultants today.

FactorPersonal LoansLoan Sharks
RegulationsLegal and regulated by the Ministry of LawIllegal and unregulated
Rates of InterestFixed rate, up to 4% each monthFluctuates, up to 20% per week
Processing FeesTypically 1%-5% of loan amountNo official fees, but hidden fees may be charged
Repayment TermsBetween 1 to 7 yearsTypically short-term, can be weekly or daily
Loan AmountsUp to 4-6x monthly salaryVaries widely, but there is no certainty of repayment

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