How Do I Identify A Loan Scam MLA Moneylenders Loan Academy Singapore

WhatsApp messages and SMSes are being sent, offering credit services to random users. The senders (scammers) claim to be staff from a reputable and licensed moneylender. Some people are duped into transferring money as a deposit to aid in loan processing and disbursement. After making the transfer, you will realize that the scammers are gone and there is no way to contact them.

Sometimes, the scammers request for your personal information like contact details, SingPass details, and NRIC. Later, they could use these details to threaten you to make further payments.

It can be challenging to tell a scam and a legit loan offer. Therefore, it’s best to know the specific red flags to look out for and compare various moneylenders before making a choice.

1. A credit check isn’t necessary

Many legitimate moneylenders will first check your credit to determine if you will be able to repay the loan. A higher credit score shows your ability to use credit wisely and repay loans on time. That implies you pose a less financial risk, and a lender may be willing to advance loans to you. In case a lender isn’t interested in a credit check, be wary. Scammers won’t care about a borrower’s creditworthiness. They’re just after your personal information and duping you into making some payments.

2. The offer is incomplete

According to the moneylenders Act, all lenders must provide the complete terms and conditions regarding the loan, including the final cost of the amount borrowed (principal) plus the interest amount. You must understand these terms before you sign any paperwork. If you realize that your loan offer is missing some details, has many grammar errors, or other mistakes that raise an eyebrow, the chances are that it’s a loan scam.

3. The moneylender is not registered by the Ministry of Law

In Singapore, all moneylenders are required to get registered by the Ministry of Law and acquire the right license. If you ever find a business or lenders who are not registered or licensed, never respond to their lending offers. Some scammers use websites that seem legit to get their victims to believe in them. Remember, a licensed moneylender will always mention their license number on their business websites.

4. You can’t find the moneylender’s physical address

If a moneylender hasn’t provided contact details or physical address, don’t negotiate any loan with them. Scammers try as much as they can to make it difficult for their victims to contact them later. Therefore, they avoid all legal actions you are likely to take against them because you cannot find them in the first place.

5. You are guaranteed loan application approval

In the business world, there is no such thing as guaranteed loan approval. A legitimate lender will first check your credit score to and analyze your application to verify your information. The application can only be approved if you meet the moneylender’s minimum requirements. On the other hand, scammers will lure you in with the so-called guaranteed loan approval so that they can successfully collect fraudulent upfront fees.

6. Your loan offer expires soon… act now!

Well, ‘urgent loan offers’ are likely to be a scam. If you are faced with such offers, avoid them. Licensed moneylenders offer steady rates, and this depends on your credit record. Indeed, the lenders want to be sure that you will be able to repay the loan on time, and for this reason, an ’urgent’ loan offer isn’t one of their services. Remember, scammers, try as much as they can to create a sense of urgency to drive to act long before you realize its fraud.

7. You are required to make an upfront payment

Nearly all loans demand ‘insurance,’ ‘processing,’ and other types of fees before approval are all frauds. Anyone asking for payment to get your loan approved is a scammer in need of quick money. Licensed lenders uphold transparency and will treat you professionally during loan application, processing, and approval.

8. Requests a gift card as a form of payment

Gift card payments are just the same as cash payments. Once that money is spent, you cannot trace or get a refund. There is no legitimate, licensed lender will pressure you to make a gift card payment. Just find a licensed moneylender providing legitimate loan services.


Avoid personal loan scams

Whenever you get an email or text message with an instant offer of a personal loan with no credit check and a very low-interest rate, watch out. It’s probably a fraud, also known as a loan scam. Here is how to protect yourself from loan scams.

Phishing scams

The most common personal loan scams are involve phishing, where fraudsters focus on getting your financial or personal information. The fraudulent lender will send you a website where you can access a form that appears to be legitimate. Sometimes, you might even speak to them through phone and end up providing all your personal and financial information.

Before you apply for any loan online, make sure you are on an encrypted webpage. Check for a ‘padlock’ to the left of the webpage URL, and the site’s URL must start with ‘https.’

Advance fee scams

In case the lender asks you to make upfront payments, just stop the loan application process. There’s no legitimate lender who will ask you to make any form of payment unless your application. Though some licensed lenders charge a fee for their loans, the amount is usually deducted from the loan amount.