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Scam or legit? No-collateral loans from online money lenders in Singapore

Glass jar full of silver coins beside stacks of coins and wads of cash
Glass jar full of silver coins beside stacks of coins and wads of cash

A no-collateral loan is another name for an unsecured loan, where the borrower does not need any assets to apply for a loan. If you are thinking of applying for a personal loan, an online money lender in Singapore is a good place to start.

Here, we take a closer look at why some people think no-collateral loans are too good to be true and whether they are right or wrong.

Debunking the Myth

One of the reasons that no-collateral loans are regarded with suspicion is their association with illegal money lending. Banks and other major lending institutions ordinarily do not extend loans to anyone with a shaky financial record. If they do, they ask for assets as collateral to protect themselves.

‘Ah longs’, on the other hand, have a reputation for extending loans to people in need without asking any questions. It is part of their modus operandi to entrap as many unsuspecting victims as possible.

As a result, most people cannot imagine that a legal money lender in Singapore would do the same. Fortunately, the formal regulation of the local moneylending industry has created a happy medium.

Legal online money lenders in Singapore offer the same convenience but within the government’s tightly regulated framework. Borrowers can get fast loans in Singapore with no collateral and without giving up any of their consumer protections, either.

Treading Carefully

We have established that it is indeed possible to get some of the lowest interest rate personal loans in Singapore legally. That does not mean every lender that promises the best personal loan in Singapore is licensed or legal.

For all the fast loans Singapore lenders offer, there are also many scams. Anyone looking for a no-collateral loan should take the necessary precautions to avoid falling into that trap. Here are four things you should be aware of:

1. Advertising is strictly regulated for legal lenders

Moneylenders are only allowed to advertise their services on their websites, at their registered office, and in business directories such as the Yellow Pages.

We have all received messages on social media and chat sites advertising loans and similar services. Almost all of these are from unlicensed and illegal lenders. There is unfortunately a small minority of legal lenders who engage in this practice as well.

If they are willing to compromise on such basic guidelines, it does not speak to their integrity or trustworthiness. Avoid any company that sends you unsolicited loan offers.

2. Legal lenders must operate a registered office

When you are looking online for the best personal loan in Singapore, it can seem like there are lenders everywhere. However, Singapore law requires every legal money lender to have an actual office.

Many lenders that offer no-collateral fast loans in Singapore allow you to make an application through their website. This is a convenience designed to save time but the formal validation and approval process should be performed at their registered office.

A company that seems to have no office, and where the lender meets you in public instead, should raise red flags.

3. No collateral is legal, no credit check is not

Many of the best personal loans in Singapore come with the convenience of provisional online approval but this must be followed up with a formal in-person process.

Part of that process is a credit check as well as an identity verification procedure. The applicant will need to provide a basic ID such as NRIC, FIN card, and/or passport. Financial documents such as an employment letter, bank records, CPF contributions, and tax statements will also be required.

These steps protect the public against identity theft and other scams. Any company that skips them may not have your best interests in mind.

4. Some deals are too good to be true

Just because a company advertises the lowest interest rate personal loan in Singapore does not mean it is true. Look closely before you decide.

Legal lenders in Singapore are limited to charging a maximum of 4% interest per month, regardless of the type of loan. They may lower that rate for repeat customers or during special promotions but not significantly.

If you come across ads for no-collateral loans that seem extraordinarily low, read the fine print before you sign on the dotted line.

No-collateral loans – legal and convenient

It is certainly possible to get a legal no-collateral loan from an online money lender in Singapore. Be safe by knowing the danger signs we explained here and avoid lenders who flout the rules. Before you apply for a personal loan, read this page that explains all the basics.


The information provided on our website is for educational and informational purposes only and is not intended to be a substitute for legal or financial advice. While we try to ensure that information on this website is accurate, we do not warrant that the information will be free from error. We shall not be liable for any loss or damage that may arise from the use of this website.

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