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How to Spot Loan Scams in Singapore
(And Choose a Licensed Moneylender)
25 Jul 2025 | Monetium Credit
Loan sharks, “Ah-Long” or Unlicensed Money Lenders , call them however you want, they’re the same: con artists who scam people into borrowing money from them. The practices employed by these are illegal, immoral, and forbidden in Singapore, but that doesn’t stop them from happening. Just this February, the Police has caught over 100 people aged 15-73 for suspected links with UML. The scammers are thriving and, under such acerbated circumstances, one has to be extra careful when dealing with moneylenders.
Monetium Credit is a Singapore-licensed moneylender and will never engage in any loan scam-like tactics. Today, we are here to tell you, a potential borrower, how to spot and avoid loan scams, so that you can keep yourself and your finances safe from the practices of unlawful moneylenders. The effects of signing with loan sharks are never short-term, and they often include harassment and violence, on top of financial distress. UML must be avoided but if you don’t know how to, you risk falling victim to their loan scams. Read this article to find out how to avoid loan scammers.
The Rise of Loan Scams in Singapore
You might be inclined to think loan scams are a thing of the past, but unfortunately, that’s not true. Every day, people fall victim to the infamous tactics of scammers. This April, the Police have issued an Advisory on yet another variant of loan scams, in which scammers would request, via text messages, personal information in order to process a loan. Sometimes, they would even ask their victim to pay the administrative fee resulting from the loan ahead of receiving the promised money.
We would like to remind you, at this time, that a licensed moneylender will never approach you or solicit a loan via text messages, phone calls, or social media platforms, under any circumstances. It is forbidden by the law and there are no exceptions to this rule, not if you’re a legal entity. If you get any such messages from someone claiming to be an authorized lending institution or asking for your personal information, they’re most certainly not truthful and should not be trusted. Chances are, you’ve been picked by a loan shark.
The market of loan sharks in Singapore is thriving. Year by year, there are more and more cases reported. Their target demographics include first-time borrowers, people with low income, foreign workers who are not accustomed to these illegal practices, and individuals who are in desperately in need of cash, fast. In other words, everyone is targeted. This means one can be too prepared, too secure, or too safe from falling victim to these scammers. We have to understand that, when it comes to scams, anyone is a potential candidate in the eyes of a scammer, even if they don’t fit the targeted demographic. You need to know how to protect yourself from loan scams. In the following section we are going to look at some of the most commonly used tactics scammers would use in order to attract and pull in their victims.
Remember that these scammers don’t cause just financial loss. More often than not, they involve identity theft, emotional trauma, and long-term repercussions on one’s credit score.
Common Scam Tactics
- Asking for upfront fees: scammers would often push for all kinds of upfront payments, sometimes disguised as “processing fees”, “admin charges” or “insurance payments”. They do this before disbursing the loan, making people pay money in order to get their money. Here at Monetium Credit, we will never ask for any sort of upfront payment before issuing a loan. No licensed moneylender will ever do that, so if your moneylender asks you for money before you get the loan sum, you’re most likely dealing with a scammer.
- Another common scam tactic involves the sending of unsolicited messages or “cold texts”: as mentioned before, licensed moneylenders are not allowed to contract or advertise via private messaging. It is part of operating under the Moneylender Act. If you receive texts claiming to offer “low interest rates” or “fast approval loans”, the sender of that message is most definitely an Unlicensed Moneylender. For your information, the rates offered by an authorized and licensed moneylender are capped at 4% and, with the help of an online loan application, here at Monetium, you can get a personal loan approved in as little as 24 hours.
- Impersonating licensed moneylenders: Sometimes these loan sharks would go as far as impersonating legitimate and licensed moneylenders. They will copy their web pages, they will choose similar names or elements of visual identity, and they will operate under their name, all in hopes of confusing people enough to believe they are the real deal. Before signing any contract, before even considering a possible moneylender, always check to see if their institution is registered under the Ministry of Law. You can find the list here.
- They often make unrealistic promises: there are a few giveaways you can look for when interacting with money lending institutions, one of which is their language. Licensed moneylenders are required by law to explain you’re the terms of the contract in a manner that you understand, with no fancy or complicated words. Loan sharks, on the other hand, will try to win over their audience with claims such as “guaranteed approval”, “no credit checks required” or “zero interest”. If a money lending institution approaches you with any of these claims, then you should disregard them, no matter how appealing the offer sounds. Licensed moneylenders will check your credit score because we want you to be able to pay off your loan as much as you want to avoid going into debt.
- They resort to the use of threats and harassment: scammers often turn to intimidating tactics in order to pressure their victims. These tactics include threatening to take legal action (which will not happen because they themselves are not legal entities), or harassing your contacts, including family and close friends (which has been reported in the past. Sometimes scammers continue to harass their victims even after the debt has been paid), or they can try to scare you into accepting things fast by claiming you’re now liable for all kinds of fees.
How to Verify a Legal Moneylender
Sometimes you can tell right from the start if you’re dealing with a scammer. However, their tactics and operations keep getting better and better and a time will come when you might not be able to tell right off the bat, no matter how confident you are. When that time comes, here is what you should do to make sure you’re not signing with a scammer.
Step 1
Check the Ministry of Law’s Registry. MinLaw has posted a list titled “List of Licensed Moneylenders” where you can check if your institution of choice is present. If it is not there, then they’re not legit and you should stop any ongoing operation you have with them.
Step 2
Visit their physical office. Any licensed moneylender is required by the same Ministry to operate within a registered physical location that is registered. If your moneylender works on a remote-only basis, then they’re most likely unlicensed. Here at Monetium Credit, you can find us at 10 Jalan Besar Sim Lim Tower and, although our loan application is 100% online, we will always ask for a face-to-face meeting before handing over the loan money.
Step 3
Ask for the loan contract. Before concluding any financial transfer, you are required by law to be given a loan contract stipulating the loan amount, your repayment schedule, the interest rate, fees and penalties, and the total cost. This way, you know right from the start and have proof in writing of the financial obligations you’re signing up for. Moreover, as we have stated before, licensed moneylenders are required by law to explain everything you need to know and to communicate the terms of the contract in a way that is understandable. If you have any uncertainty regarding the terms of your contract, you can ask an advisor or a consultant from a licensed money lending institution to repeat and explain the terms.
Step 4
Check communication styles. Any respectable moneylender will communicate in a way that shows professionalism, respect, and excellence. The communication will not be done through personal channels such as DMs or private texts, but through professional communication channels that have been approved beforehand, such as email accounts. Moreover, the tone of voice would not be violent or urgent, nor would it intentionally try to manipulate the respondent, creating a sense of FOMO.
Step 5
No upfront payments are required. You already know that asking for money before getting the loan is a common tactic used by scammers. The golden rule is you repay after getting your money, never before. If your moneylender asks for any kind of money, be it a “processing fee” or some “admin charges” or another type of similar legit-wannabe charge, do not give them the money and contact the local authorities. Speaking of authorities…
What To Do in Case You Get Scammed
If you presume you’ve been scammed, or maybe if you’re certain of it, then there are steps you can take in order to minimize the damage and loss. The faster you act, the better.
- Contact your bank and freeze all of your accounts immediately. It is not always guaranteed that you can recover the money you’ve lost, but the least you can do is try to protect the remaining of your finances from being stolen by scammers.
- Report to the police, even if you don’t end up saving the money, you can help save other people from falling victim as well. Your call to the police might be the reason someone’s lifetime savings are still intact. Do not underestimate the power of a call and try to contact the police as soon as possible, while the details are still fresh in your mind.
- Additional steps you can take: contact ScamShield or the Anti-Scam Center, report to the Monetary Authority of Singapore, seek legal consultancy from Credit Counselling Singapore or the Consumer Association of Singapore
How to Choose the Right Moneylender in Singapore
Now that you know what not to choose and how to protect yourself from loan sharks, let us look at some of the things you want from your Singapore-licensed moneylender:
- They have transparent interest rates: if your moneylender is a legit one, there will be no issue in providing a clean and clear image of your interest rates and financial obligations.
- They operate in a physical office and offer face-to-face consultation: a legit operator will always welcome individuals into their office, where they can further discuss any details or questions one may have.
- They provide clear and legal contracts: as stated before, contracts are crucial when establishing the legitimacy of a moneylender. You must have all the terms written and explained before signing any contract.
- They encourage responsible borrowing: the steps required by a licensed moneylender to go over in order to assess a borrower’s capability to pay off a loan are there for a reason. Here at Monetium Credit, we do not encourage over borrowing and we work in order to ensure responsible borrowing practices, as should any respectable money lending institution that puts the client first.
Conclusion
The risk imposed by loan sharks is more and more present as days go by. Every day, every week, someone is losing money, possibly even life savings, to the hands of illegal and unethical money lending institutions. But they don’t lose just money, they lose hope and peace, they lose the liberty of living a free life and they lose their sleep and sanity over someone’s illegal acts.
It is up to us to educate ourselves on the tactics these loan sharks use, in order to know what to protect ourselves from. If you want to learn more about the financial sector, you can consult our Newsroom page, where you will find many “how to” or “why you should” articles. Always remember to do your research before signing any contract and, if you’re in doubt, it’s safer to pull away than in.
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