At one point in your life, you’re going to need money you don’t have. It could be for a new car, a hospital bill, an emergency roof repair. Needing some financial help happens to the best of us and it’s nothing to be ashamed of.
We do, however, need to be mindful of how we borrow money, and where. An Ah Long is a loan shark in Singapore and Malaysia, and one you should avoid at all costs. These lenders place ridiculously high interest rates on their loans and take advantage of someone’s desperation for some quick cash. Desperation, after all, is the lifeblood of their business. Their usual victims include gamblers and people who can’t borrow from legal sources.
Resorting to an Ah Long for some quick cash has major downsides and can lead to dire consequences. These reasons explain why you should steer clear of these loans sharks:
A lot of these loan sharks pretend to be licensed money lenders. They attract you with the pitch that it’s easy to borrow money from them. They present themselves as “100% real lender” and lure you in with “easy, fast approval”.
And once you’ve been ensnared in the trap, that’s when they reveal their true colours and start charging ridiculous fees and exorbitant interest rates. The possible maximum interest rate allowed by Singapore’s Minister of Law is 4%—loan sharks will demand an interest rate of up to 20%. That’s five times the allowed amount. Worse, if you default on payments, this number will only go up.
They Use Harassment Tactics
According to the Singaporean police, loan sharks will resort to harassment methods and even violence to demand payment. They will harass the borrower either via email, text, call, and even stalk them on Facebook if necessary until they’re paid.
In one extreme case in Kuala Lumpur, an Ah Long recorded a video firebombing a home with a petrol bomb as a scare tactic to get the family to pay him.
They Don’t Let You Track Your Payment History
As if that’s not bad enough, Ah Longs want to keep you in the dark. They don’t show you your repayment history, and without the paper trail, you’re vulnerable to more lies and deceit. They can easily deny your claim that you’ve paid off a certain amount, and on top of that, you will also have to pay the crazy interest.
How to Deal with an Ah Long
If you’re being harassed by an Ah Long, report them to the police immediately. There should be zero tolerance for their unreasonable demands and threats. If you feel like there’s nowhere else to go, head over to Credit Counseling Singapore. They can help you get your debt under control with a payment plan.
We understand—life can be tough and no one is spared from a little cash hiccup. Before turning to loan sharks, think long and hard about the potential consequences of dealing with unregulated money lenders. There are so many other better options out there. Licensed money lenders are honest when they say they offer easy application and fair interest rates. Make the right decision.