Is Taking A Loan From Loan Shark Illegal in Singapore?

loan from loan shark

Is Taking A Loan From Loan Shark Illegal in Singapore?

Borrowing money or taking a loan like a foreigner loan can be a necessity at times, but in Singapore, as in many other countries, it’s essential to understand the legal implications of how you acquire those funds. Loan sharks, colloquially known as “Ah Longs” in Singapore, offer quick financial solutions but are often associated with illegal activities and severe consequences. 

In this article, we will delve into the world of loan sharks in Singapore, their legality, and the safer alternatives available such as licensed money lender to those in need of financial assistance.

Understanding Loan Sharks

Loan sharks are unlicensed, often criminal lenders who offer short-term, high-interest loans to individuals who may not qualify for traditional bank loans. They operate outside the boundaries of the law and typically use intimidation, harassment, and violence to enforce debt repayment. While they may seem like a quick fix for financial troubles, borrowing from loan sharks can lead to a host of legal and personal problems.

The Legal Implications

Laws Regulating Loan Sharks

Singapore has stringent laws in place to combat illegal money lending. The Moneylenders Act and the Moneylenders Rules regulate and control moneylending activities in the country. Licensed moneylenders are authorized under these laws, but loan sharks are not. Borrowing from unlicensed lenders is illegal and punishable under Singaporean law.

Consequences of Dealing with Loan Sharks

Dealing with loan sharks can have severe repercussions. Borrowers may face harassment, threats, or even physical harm if they fail to repay the borrowed amount on time. Additionally, engaging with loan sharks can result in criminal charges and imprisonment.

Alternatives to Loan Sharks

While borrowing from loan sharks might seem like a quick solution, there are safer alternatives available. One such alternative is turning to licensed moneylenders. These legal entities offer financial support with regulated interest rates, ensuring that borrowers are protected by the law.

How to Avoid Loan Sharks

To avoid getting involved with loan sharks, it’s crucial to be informed and cautious. Always verify the legitimacy of the lender by checking the Ministry of Law’s list of licensed moneylenders. Never engage with lenders who resort to harassment or intimidation tactics.

Reporting Loan Shark Activities

If you encounter loan shark activities or harassment, it’s essential to report them to the police. Singapore has a dedicated unit, the Unlicensed Moneylending Enforcement Team (UMET), which focuses on investigating and prosecuting loan sharks. Reporting such activities can help protect not only yourself but also the community.

The Role of Moneylenders

Licensed money lenders play a significant role in Singapore’s financial landscape. They provide a regulated and legal means for individuals to access loans, ensuring that they are protected by the law. This distinction between licensed moneylenders and loan sharks is essential for borrowers to understand.

Loan Shark vs. Licensed Money Lender

The table below highlights the key differences between loan sharks and licensed moneylenders:

AspectLoan SharkLicensed Moneylender
Interest RatesExorbitantly highRegulated by the law
ProtectionNoneLegal protection for borrowers

Impact on Borrowers

Borrowing from loan sharks can lead to a cycle of debt and personal suffering. It often traps individuals in a web of fear and financial instability, making it essential for borrowers to seek legal and safer alternatives.

The Fight Against Loan Sharks

The Singaporean government, alongside various community organizations, is actively fighting against loan sharks. Their efforts include public awareness campaigns and strict law enforcement to protect individuals from the clutches of unlicensed moneylenders.


Borrowing money is a common need, but dealing with loan sharks is not the solution. It is illegal in Singapore, and the consequences can be severe. It’s essential to explore legal alternatives, such as licensed moneylenders, to ensure you remain within the bounds of the law while addressing your financial needs.

If you like this article, you may want to read this article about 9 Easy Steps to Secure a Loan via SingPass in Singapore.


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