Why This Distinction Matters
Unlicensed moneylending — commonly called “loan sharking” — is a criminal offence in Singapore, and the people behind it don’t follow any of the rules that protect borrowers. Knowing the difference before you borrow can save you from harassment, unlawful fees, and far worse.
Signs You’re Dealing With a Licensed Moneylender
- They are listed on the official Registry of Moneylenders, and you can verify their licence number yourself.
- Interest is capped at 4% per month, calculated on the reducing balance.
- Any late fee is capped at S$60 per month of late repayment, on top of late interest capped at 4% per month on the overdue amount.
- All loan contracts are explained and signed face-to-face at their approved business premises — never entirely online, and never at a coffee shop or void deck.
- They will never contact you unsolicited through SMS, WhatsApp, or cold calls to offer a loan.
Red Flags of an Unlicensed Lender
- Unsolicited loan offers via text message or messaging apps.
- Requests for your Singpass login, ATM card, or banking passwords.
- Upfront fees demanded before any loan is disbursed.
- Interest or fees that seem disproportionate, vague, or change after the fact.
- Threats, harassment, or vandalism (such as paint splashing) used to collect repayment.
What To Do If You’re Unsure
Don’t take a caller’s word for who they represent. Independently look up the company name or licence number on the Ministry of Law’s registry before sharing any personal or financial information. If you believe you’re being contacted by an unlicensed lender, or pressured into borrowing by someone impersonating an official, treat it as a scam and report it — see our Scam Alert page for the exact steps.