What Happens if I Am Unable To Pay a Moneylender in Singapore?

If you can’t keep up with your loan repayments, remember that you’re still legally bound by the contract. Licensed moneylenders can charge late interest and fees (within strict caps) and may even take legal action to recover the debt — but harassment, intimidation, or any form of criminal conduct is not allowed.

The Registry of Moneylenders (ROM) does not step in to mediate or negotiate with your lender. If you need help, you’ll have to negotiate directly, get a lawyer, or seek support from a social service agency. Credit Counselling Singapore (CCS) can also help you work out structured repayment plans through their programmes like the Debt Management Programme (DMP) or Moneylender Debt Management Programme (MDMP).

If you experience harassment or suspect unlicensed moneylending (loan shark activity), report it immediately to the Police at 999 or call the X-Ah Long hotline at 1800-924-5664. For licensed moneylender misconduct, file a complaint with ROM.

Licensed moneylenders can add fees and interest if you miss payments, but these are capped by law.

• Late interest: Up to 4% per month, but only on the overdue sum (not your entire outstanding loan).

• Late fee: Up to S$60 per month.

• Upfront admin fee: Up to 10% of the principal loan amount.

• Total charges: Across the life of the loan, charges cannot exceed the original amount you borrowed.

Moneylenders can also take reasonable steps to collect repayment — such as calling you or visiting your home or workplace. If you still don’t pay, they can sue you in court to enforce the contract.

Be cautious with property caveats: Some secured loan agreements allow lenders to lodge a caveat on your property proceeds if you default. This could block a sale until the loan is cleared and eat into your sale proceeds. Courts may set aside contracts that are “exorbitant or substantially unfair,” but it’s best to get legal advice early.

Even if you owe money, there are strict rules about how lenders can behave. They are not allowed to harass, threaten, or intimidate you. Specifically, they cannot:

• Inflict injury or threaten violence

• Damage your property or vandalise your home

• Stalk, doxx, or show up in groups to menace you

If you face such behaviour, report it to the Police immediately and inform the Registry of Moneylenders (ROM).

The Registry of Moneylenders regulates licensed lenders and enforces the rules. However, ROM does not mediate or negotiate repayment terms on your behalf. Their role is to investigate complaints and ensure lenders follow the law.

If you’re struggling with repayments, you’ll need to negotiate directly with your lender, get a lawyer involved, or work with an accredited agency like Credit Counselling Singapore (CCS).

If you’re genuinely unable to cope with repayments, there are structured options:

Credit Counselling Singapore (CCS)

• Offers the Moneylender Debt Management Programme (MDMP).

• Works with the Credit Association of Singapore to create a formal repayment plan with licensed moneylenders.

• Criteria: You must show the ability to repay all your debts, clear moneylender loans within two years, and possibly be on a Debt Management Programme (DMP) for bank debts.

Social service agencies (advised by ROM)

• Include Adullam, AMP, Arise2Care, Blessed Grace, One Hope Centre, and Silver Lining.

• These groups can support borrowers under stress and help with financial counselling.
  

Unlicensed moneylending (loan sharking) is illegal. Loan sharks often harass, intimidate, and vandalise — and you have zero legal protection if you borrow from them.

If approached by one:

• Call the Police (999)

• Use the X-Ah Long hotline (1800-924-5664)

The Singapore Police Force runs regular operations to clamp down on loan sharks, but it’s important you don’t engage with them in the first place.

Here’s what you should do right away:

• Stay contactable: Don’t ignore calls or letters. Explain your situation honestly.

• Negotiate early: Ask if the lender will let you pay lower instalments, extend your loan tenure, or waive late fees. Always get it in writing.

• Keep records: Save all receipts, statements, and messages. Licensed lenders must issue receipts and statements twice a year (in January and July).

• Seek help: If you have both bank and moneylender debts, CCS can help you structure repayment across both.

• Report harassment: Call the Police for criminal behaviour; file a complaint with ROM if it’s licensed-lender misconduct.

• Self-exclude: Consider applying for self-exclusion under the Moneylenders Credit Bureau (MLCB) to block new unsecured loans for 1–2 years while you recover financially.

Missing loan payments is stressful, but you’re not powerless. Understand what moneylenders are legally allowed to do, get help early, and use structured repayment options if you qualify. And most importantly, avoid loan sharks at all costs.