What is unlicensed money lending?
Unlicensed money lending is simply where a money lender does not have a license to loan out money. It is also known as “Ah Long” or “loan shark”. It is risky and potentially unsafe to deal with an unlicensed money lender, as the lender might try to harass or intimidate you, your employer, your family etc.
Unlicensed money lender may also be called ‘illegal money lending’ or ‘unlawful money lending’. All of these terms basically mean that the money lender must legally allowed to give out loans.
Is it legal to borrow money from an unlicensed money lender?
It is not a crime to borrow money from an unlicensed money lender, but it is risky. This is because an unlicensed money lender is not authorized or given permission to give out loans by the Singaporean authorities.
How can I check if the money lender is licensed?
The Singapore Ministry of Law has a list of licensed money lenders that you may use to check if the money lender you are dealing with is licensed.
What is a licensed money lender not allowed to do?
A licensed money lender must follow strict rules in order to keep their license. If they break the rules, the Singaporean authorities may remove their license, so that they cannot carry on their business.
Money lenders are not allowed to:
- Cold call or randomly call or text members of the public.
- Approve a loan without first checking the identity of the borrower – a loan can only be approved in person, never over the phone or Whatsapp.
- Ask a borrower to make a payment before the loan is given. The money lender can only charge an administrative fee after the loan has been granted, but usually this is deducted from the loan amount itself.
Helpful Tips
- Call the police (999) if you are in any danger.
- If you are unsure about the loan or the money lender, you may wish to contact one of the organizations listed in the resources section for help.
