How to File a Complaint Against a Money Lender in Singapore

Key Takeaways

• Know Your Rights: Licensed money lenders in Singapore must follow strict regulations under the Moneylenders Act, including transparent fees, fair interest rates, and ethical debt collection practices.
• Take Action When Needed: Borrowers can gather evidence, contact the lender, or file a formal complaint with the Registry of Moneylenders or MinLaw if unfair practices occur. Unlicensed lenders or harassment should be reported immediately.
• Prevent Problems Early: Always verify licences, read loan terms carefully, avoid unsolicited offers or upfront fees, and borrow responsibly to reduce the risk of disputes and maintain control over finances.

Managing personal finances can be challenging, and sometimes borrowing money becomes necessary to manage emergencies or bridge short-term gaps. While licensed money lenders in Singapore operate under strict regulations, borrowers may occasionally encounter unfair practices, misleading information, or even harassment. Understanding how to file a complaint against a money lender is essential to protect your rights and ensure fair treatment.

Thousands of Singaporeans take loans from money lenders each year, and while most licensed lenders operate ethically, some borrowers face issues ranging from excessive fees to aggressive collection tactics. Knowing your rights, the legal framework, and the proper complaint channels can make a significant difference in resolving disputes efficiently and safely.

Understanding Your Rights as a Borrower

Singapore’s moneylending industry is governed by the Moneylenders Act, which sets clear rules to protect borrowers. Licensed money lenders are legally required to protect borrowers’ personal information, disclose all fees and interest rates, provide clear loan agreements, avoid aggressive collection practices, and are barred from any form of harassment.

Being aware of these rights allows borrowers like yourself to recognise unfair practices and take appropriate action. It also empowers you to approach disputes with confidence, knowing that the law protects your interests and provides recourse when lenders act outside of legal or ethical boundaries.

Common Reasons Borrowers File Complaints

There are many reasons why borrowers might lodge a complaint against a money lender. Some of the most common issues involve excessive or hidden fees, misleading information about repayment terms, harassment or aggressive collection practices, and violations of borrower privacy.

Other complaints can arise from unlicensed lending practices, where a borrower may be drawn into predatory loans with hidden interest and fees, or errors in loan statements and calculations that unfairly increase repayment amounts. Regardless of the issue, identifying a valid reason to complain about the money lender is the first step toward resolution.

Steps to File a Complaint Against a Money Lender

1. Gather Evidence

Filing a complaint against a money lender begins with gathering all relevant evidence. This includes loan agreements, payment records, receipts, and any correspondence or communication with the lender. Detailed documentation helps strengthen your case and provides a clear record of the dispute. Include date and time stamps to substantiate your case further.

2. Contact the Money Lender

Before escalating the matter, it can be helpful to contact the money lender directly. Clear communication may resolve misunderstandings without further action. When reaching out, explain the issue, specify the resolution you are seeking, and set a reasonable timeframe for a response. Always keep records of these interactions, as they may be needed later if the complaint progresses.

3. File a Formal Complaint

If the issue is not resolved, you can file a formal complaint against the money lender with the Registry of Moneylenders. You will need to provide your personal details, the lender’s name and licence number, and a thorough account of the incident that has led to the complaint.

The Registry takes money lender complaints seriously — it will investigate them and can enforce penalties, including suspending or revoking licences, issuing fines, confiscating security deposits, or initiating legal proceedings.

Dealing with Unlicensed Lenders or Loan Sharks

Immediate action is crucial when dealing with unlicensed lenders or loan sharks. Cases can be reported via the I-Witness platform, the X-Ah Long hotline at 1800-924-5664, or by calling 999 in emergencies. Social services such as MSF ComCare and other community support organisations can also offer financial guidance, legal advice, and emotional support.

How MinLaw Handles Complaints

Once a complaint against a money lender is lodged, the Ministry of Law follows a structured process to ensure fairness and accountability. First, the complaint is acknowledged, confirming receipt and outlining the next steps. An investigation is then conducted, during which additional information may be requested, and the lender is contacted for clarification.

Depending on the findings, enforcement measures may include instructing the lender to correct the issue, issuing fines, suspending or revoking licences, or pursuing prosecution in court. Borrowers are informed of the outcome, ensuring transparency and accountability throughout the process.

Tips for Protecting Yourself Before Taking a Loan

While knowing how to file a complaint against a money lender is important, preventing problems from arising in the first place is equally crucial. Always verify that a money lender is licensed through the official Ministry of Law registry. Carefully read and understand all loan terms, including interest rates, repayment schedules, and penalties.

Borrow only what you can realistically repay, and document all interactions and agreements with the lender. Be cautious of unsolicited loan offers, high-pressure tactics, or loans with upfront fees, as these are often signs of unlicensed or predatory practices. By taking preventive steps, borrowers can avoid disputes and maintain control over their financial situation.

Red Flags to Watch Out For

While most licensed money lenders abide strictly by the regulations, it is still helpful to recognise warning signs of rogue lenders to protect yourself from illegal or potentially harmful behaviour.

Unsolicited Advertising

Some lenders target individuals in financial difficulty with repeated calls, messages, or emails promising quick loans. This practice is not only unethical but also illegal. Licensed money lenders are only allowed to advertise in business directories, consumer directories, their official websites, or their physical premises. Any outreach beyond these channels should be treated with caution.

Closing Deals Outside Official Premises

Licensed money lenders are required to conduct face-to-face verification and document checks at their registered business premises, even if documents are submitted online. Lenders offering to meet at your home, carpark, or elsewhere may be trying to rush you into signing without proper consideration. Such practices are often associated with unlicensed or unscrupulous lenders.

Upfront Processing Fees

Legal lenders may only charge an administrative fee of up to 10% of the loan amount, deducted upon loan disbursement. Any request for payment before loan approval, such as for faster processing or better rates, is likely a scam or an unauthorised action on the part of the lender. Borrowers should never pay money upfront for a loan.

Illegal Interest Rates and Fees

Interest rates and fees are strictly regulated. Licensed money lenders cannot exceed 4% monthly interest on the outstanding balance or charge more than 4% late interest on missed instalments on non-business loans. Lenders cannot impose late fees over $60, either. Practices such as flat-rate interest calculation, excessive penalties, or sudden contract changes are illegal and should be reported.

Loan Amount Limits

Loan amounts must comply with Ministry of Law caps and depend on your income and residency status. The maximum unsecured loan amount you can get across all licensed lenders at any one point is strictly capped. Ignoring these limits when designing a loan plan for a borrower is considered unlawful, illicit lending.

Prohibited or Dangerous Practices

MinLaw prohibits coercive or dangerous practices. Lenders cannot threaten or harass borrowers, disclose debt information to third parties, make you sign blank or incomplete contracts, retain personal items like NRICs or driving licences, or request account passwords or PINs. Any such behaviour is illegal and should be reported immediately.

Conclusion: Work with Trusted Licensed Money Lenders

Dealing with unfair lending practices can be stressful, but knowing your rights and proper complaint channels empowers you to take action. Prevention is always better than cure, and working with licensed money lenders ensures transparency, ethical conduct, and legal protection.

At Prosper Credit, we are a licensed money lender in Singapore dedicated to providing clear loan terms, fair interest rates, and personalised solutions. Whether you need a personal loan or a monthly loan, our team offers safe and responsible guidance. Contact us today or apply now to access fast, reliable, and trustworthy financial support, and take the first step toward greater financial peace of mind.