WhenCovid-19   truck the entire world in 2020, economies collapsed, and millions of people were affected. It has not been easy to get back on track using the little savings in the bank account. That is what was used to maintain families as the scientists looked for solutions to end the pandemic.

When lockdowns were lifted, it was time to gather back what was lost. Singapore, being one of the busiest business hubs in the world, participated in the global economic rise, andentrepreneursneeded cash to help the economy rise.

Individuals who were employed had to go out of their way and get financing for their children’s education and pick up their projects where they left.

With this increased borrowing rate, there is always a window for loan sharks who prey on innocent borrowers, leading them into more agony than before. If you need finances, this article will guide you on preventing such predators from interfering with your finances and moving forward in peace.

What is A Loan Shark?

A loan shark is an unlicensed money lender operating as a financier, and they target low-income individuals or those who need emergency financing. They work contrary to the money lenders already licensed by the Ministry of Law in Singapore to lend money in difficult times.

In the event you borrow money from loan sharks, some of the outcomes that will come with such loans include;

  • They pressure you into taking a loan with them
  • Getting a loan with high-interest rates.
  • Experience harassment in case you are late in repaying your loan.
  • Access the loan with bad terms unknowingly.

How Can You Avoid Loan Shark Scams?

Before accepting any contract with a lender, several activities ought to be carried out. You will avoid being scammed earlier than trying to get out when you have already been scammed.

  1. Research on the Qualities of a Licensed Money Lender.

The first and foremost thing you need to do is research and spot a loan shark. Some of the ways that can help determine the illegality are;

  1. A legitimate moneylender will have a physical office- The initial meeting should be a physical office for the moneylender you intend to work with. Since the ministry of law does not regulate unlicensed money lenders, they avoid having an office where they can be traced, and they have briefcase offices.
  2. Form of advertisement– While licensed money lenders advertise on business directories and their websites, loan sharks advertise using SMSs and phone calls which is a red alert towards getting a bad loan.
  3. Fees– Legitimate money lenders do not impose upfront fees before signing and disbursement of funds.
  4. Mode of Disbursement– Loan Sharks prefer cash as opposed to using a bank account.
  5. Always check if they are listed on the ministry of law website; if they are not, it should be a no-go zone for you.
  1. Check on the interest rates being Offered.

In the case of regulated financial institutions, such as banks, credit unions, or licensed money lenders in Singapore, their interest rates do not go beyond 4%. Any financial institution offering such interest is worth working with. But loan sharks charge as high as 20% per annum, which is unreasonable.

Take note of these high-interest rates and avoid them as much as possible, however much the financial pressure you may be going through,

Watch out, too, and avoid giving any personal information to these lenders because they can use the information against you and access your account fraudulently.

  1. Approach Your Usual Lender Before Anything Else.

If you are struggling with your repayments and could be you wish to offset the debt, approach your lender first and see if there is any way that you can organize and reschedule the loan for better terms. A licensed money lender will listen and figure out the best possible solution for your loan.

For instance, there are hardship plans that banks and licensed money lenders offer, and any reputable organization will be happy to see their client at peace.

Working with a licensed money lender such as the Online Credit PteLtd will give you peace of mind regarding loan rescheduling with arranged fees and lower interest rates.

  1. Insist of Signing a Contract.

Loan sharks avoid signing contracts to manipulate the borrower later in terms of interest rates, hidden charges, and repayment schedules. Ensure that the loan application document is complete with all the required information before entering into an agreement. If the lender is hesitant in such, always keep away.

Some of the necessary critical information is the terms and conditions page, the repayment schedule, loan amount, annual percentage rate, and others that you would find relevant for the loan in question.

  1. Report Suspected Loan Sharks to Authorities.

This is important to prevent other individuals from falling prey to the scams. File a complaint with the ministry of law officials by providing the name of the fraudulent company and giving any information that can lead to them being tracked and brought to books.

If you had given out your details to the loan shark, keep reviewing your credit reports and other financial information. If there be any irregularities, report them immediately toavoid them from messing up with your credit scores or using your information for other fraudulent activities.


We can’t say it better than now; try to avoid working with loan sharks, however much they are appealing. These scammers have messed with people’s lives; those who used their collaterals as security have seen it all. To avoid all these, work with a legal avenue to ensure that you are financially safe and that you can take care of others who could be scammed unknowingly.

The future of loan shark scams is in the hands of the government, and only in a while will the government catch up with them.

If you need finances and are looking for a money lender near you, Online Credit Pte ltd is a licensed money lender that offers exceptional financial support in time of need.