Now and then, people get strapped for cash. Financial emergencies come up, and you turn to moneylenders hoping for a reprieve. 

The problem is, you’re so focused on getting the loan without taking the time to verify its legitimacy. Without realizing it, you’ve put yourself in a deeper financial crisis than before. 

So now we’re going to discuss how to make sure you’re dealing with legitimate parties and how you can spot scammers/loan sharks immediately.

False Advertising

Be vigilant on the financier’s advertising method. Legitimate lenders in Singapore can only advertise through the following channels:

  • Consumer or business directories (online or print)
  • Moneylender’s website
  • Advertisements located on their business premises’ exterior

Don’t fall victim to those who use social media as their platform since this is not allowed. Block them immediately on your mobile devices and report them to authorities. 

Large Processing Fees

Fictitious financial institutions ask for large amounts of money masked as “processing fees” before giving out loans. Victims are forced to shell out thousands of dollars in money transfers to comply.

If this happens to you, immediately cancel your loan application and report this fraudulent activity. 

Financial Institution Singapore 

Immediate Approval

Real financial brokers run a credit check and go through your credit history before approving any loan. An interview is common and you should expect clear and proper documentation of the said loan.

Loan sharks on the other hand automatically transfer funds to your account without your approval. Leaving you no choice but to take the loan with extremely high-interest rates. 

Hasty Response

Counterfeit financial officers demand hasty responses from loan applicants. They tell the borrowers they need to apply immediately or lose the chance completely. So now the applicant needs to send cash for a quick deposit.

Reputable moneylenders explain everything you need to know and give you time to think things through before pushing through with the said loan. 

No Brick and Mortar Address

It’s common for con artists not to have any physical address. They operate remotely using mobile devices so clients never find out their exact location. They do this to eliminate the chances of getting arrested, thus making it extremely difficult to apprehend them.

Legitimate moneylenders, on the other hand, invite you to visit their office to make the transaction and leave you their office number.

None-Existent Contracts

Lenders doing fraudulent activities never provide borrowers with contracts, because they cannot afford any paper trails that could be used to track them down. If you ask them for a contract and they refuse, cut all ties immediately. 

Legitimate lenders always provide clear contracts with the actual loan amount, loan terms, and interest rates. They will also make sure that you understand everything stated in the contract before letting you sign.


Cash Note

How to Check a Licensed Financial Institution?

Now that you know the red flags used in identifying scammers, here are the things to check in verifying a licensed financial institution:

Confirm Their Legal Status

1. Go to Singapore’s Ministry of Law official website. Click on the link- List of Licensed Moneylenders in Singapore.

2. Download the PDF file or use another browser window to open it.

3. The PDF file will also provide the list of companies having a suspended license. 

Licensed moneylenders must only lend an amount not exceeding the borrower’s income. This legal requirement is put in place to protect the borrower and lender. 

The total debt servicing ratio or TDSR in Singapore is 60%. This means that the maximum amount a borrower’s monthly income can go to a loan repayment is 60%.

The contract must state the amount borrowed, the licensed money lender interest rate charged, the period of repayment, late payment fees and other charges. 

The contract is legally binding for the borrower and financier and protects the interests of both parties. The contract is legal and can be used in court if either one violates any of the terms.

Fixed Interest Rate

Small financial institutions are restricted by law on the interest rate they can charge to prevent the borrower from being exploited. The maximum interest that can be charged per month is capped at 4% of the principal amount. 

Limited Fees

Licensed moneylenders can only charge for loan processing fees, late payment fees, and legal fees which are also listed. Late payment fees cannot go over $60 a month while loan processing fees are capped at 10% of the principal amount. 

Physical Location

Legal financial institutions must have a physical address to conduct their operation. This is done to track them down should any problem arise.

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Security and Privacy is Made Top Priority

Authentic moneylenders will never keep an NRIC, passport, driver’s license, or any personal identification from their borrowers. 

Also, they must never ask for passwords of your SingPass account, email account, or internet banking.


Illegal money lenders Singapore are everywhere. They can get the leads or information they need from reputable institutions and from there, lure borrowers into a bottomless pit. 

There are instances however when people choose them because they cannot get a loan elsewhere like banks due to bad credit. Others would borrow from them to use it for gambling. 

Whatever your reason is for borrowing money, don’t fall victim to loan sharks. They present themselves as legit when they are anything but. They are willing to shell out money more conveniently, without the tedious and lengthy application process. Those in dire need of financial assistance are the ones who often fall into their trap. 

When the borrower can no longer repay the loan because of extremely high interest and other charges, the loan shark Singapore will start to assert their power and instill fear. Be vigilant. Know your rights. Do not be a victim.