The Hidden Dangers of Unlicensed Moneylending in Singapore

Even in a developed country like Singapore, unlicensed moneylenders, or “Ah Longs,” remain a serious concern. These lenders prey on individuals in financial distress, offering quick cash at dangerously high costs. Borrowing from them can spiral into excessive debt, harassment, and even legal troubles.

Borrowing from unlicensed moneylenders is a trap

Victims often turn to loan sharks after exhausting formal channels such as banks or licensed moneylenders. What seems like a quick solution can quickly become a trap. Unlicensed moneylenders charge exorbitant interest rates, create complex repayment schemes, and use aggressive tactics to ensure payment. Harassment is common: borrowers, their families, and even colleagues can be targeted, with phone threats, home visits, or workplace intimidation. Some borrowers are coerced into illegal acts or have their personal information misused.

Despite these risks, many still borrow from unlicensed lenders. Poor credit, urgent financial needs, or fear of social stigma often push individuals toward these dangerous options. The consequences can be devastating, affecting not only financial stability but also mental health and personal relationships.

What to do when facing harassment from unlicensed moneylenders

If you find yourself facing harassment from an unlicensed moneylender, it’s critical to act quickly. First, stop all payments and secure your personal information, from phone numbers to online accounts. Avoid direct confrontation with the lender. Then, report the situation to the authorities—call the police at 999 or contact the X‑Ah Long hotline at 1800‑924‑5664. Evidence such as call logs, messages, or photos of harassment will support your case.

Legal protections under Singapore’s Protection from Harassment Act (POHA) allow you to apply for a Protection Order, which can restrain the harasser and prevent further harassment. It’s also important to seek financial guidance and emotional support. Organisations like Credit Counselling Singapore and ComCare provide debt management advice and emergency aid, while trusted family and friends can help mitigate psychological stress.

Legal alternative to moneylending

Licensed moneylenders offer a safer alternative. Unlike loan sharks, they operate under clear legal frameworks, with capped interest rates, enforceable contracts, and regulated debt collection methods. Before borrowing, always verify that the lender is listed on the Registry of Moneylenders. Avoid lenders who pressure you into quick loans or ask for upfront fees outside legal limits.

In Singapore, knowledge is protection. Understanding the risks of unlicensed moneylending and your rights as a borrower can prevent financial and personal harm. Being informed, seeking licensed lenders, and knowing where to turn for help are key steps to safeguarding your financial security. Financial literacy isn’t just about managing money—it’s about staying safe, confident, and in control.