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    Getting a loan from a money lender in Singapore can sometimes be a life-saver, especially when you need immediate financial assistance. However, there might be instances where you find yourself unable to pay back the loan. So, what happens then? This article will guide you on the possible repercussions and the sensible solutions you can utilize to navigate such a challenging situation.

    Factors to Consider Before Taking a Loan

    Before you decide to seek a loan from a money lender in Singapore, there are critical considerations you should make. Here are a few reminders:

    Confirm the Legitimacy of the Money Lender

    Ensure that the money lender you’re dealing with is licensed. This will protect you from loan scams and unscrupulous individuals masquerading as lenders.

    Understand Your Eligibility for Financial Assistance Schemes

    The Singapore government offers various schemes to help its citizens get financial assistance. Before you approach any money lender, see if you qualify for such programs. These schemes often don’t come with extra charges and may even be grants.

    Understand the Terms of the Loan

    You should be fully aware of the loan terms. Licensed money lenders in Singapore are required to explain the loan terms to their clients in understandable language. Make sure you comprehend every aspect of the loan, including the interest rate and any applicable fees.

    Borrow Only What You Can Repay

    It’s crucial to borrow the amount that you can comfortably repay. If you fail to repay the money lender, you could incur late fees and might have to default on the loan.

    The Implications of Not Paying a Money Lender

    If you are unable to pay back your loan, there can be several consequences. These include:

    Denial of Future Loan Applications

    If you fail to repay your loan, your loan repayment history and unpaid loans will be recorded in the Moneylenders Credit Bureau (MLCB). This information can influence the decision of money lenders when you apply for new loans in the future.

    Loss of Collateral

    For secured loans that require collateral, failure to repay the loan could result in losing the asset you used as collateral. Licensed money lenders in Singapore have the legal right to possess the collateral to recover their debt.

    Legal Action

    Failure to repay your loan can lead to legal action against you. This could involve court proceedings and additional legal fees.

    Actions Money Lenders Can and Can’t Take

    If you’re unable to repay your loan, a licensed money lender might take certain steps to recover what is owed to them. However, there are also actions that they are legally prohibited from taking.

    Actions a Money Lender Can Take

    Licensed money lenders can:

    • Send a letter to your home demanding repayment.
    • Visit your home or office to deliver the letter.
    • Call or text you during reasonable hours to ask about payment.
    • Initiate legal action.

    Actions a Money Lender Can’t Take

    Even if you fail to repay your loan, there are certain actions that money lenders cannot take. They cannot:

    • Inflict physical injury on you.
    • Engage in vandalism against you or your property.
    • Stalk you or your family members.
    • Harass, intimidate, or threaten you or any member of your family.
    • Seize or damage your property without a court order.

    Sensible Solutions If You Can’t Repay a Money Lender

    If you find yourself unable to repay your loan, there are a few strategies you can employ:

    Renegotiate the Repayment Terms

    If you’re struggling to repay your loan, you can request the money lender to reconsider the loan repayment terms. They may agree to lower the monthly payment or extend the loan tenure. However, keep in mind that extending the loan duration will mean you’ll be repaying the loan for a longer period.

    Seek Debt Counselling

    If you’re struggling with debt, debt counselling can be beneficial. Reputable debt counselling organisations in Singapore provide counselling and resources to help manage and repay debts.

    Consider Bankruptcy

    If your debt exceeds $15,000 and you’re unable to repay it, you can consider filing for bankruptcy. However, this should be your last resort as it comes with severe consequences and restrictions.

    Can the Registry of Moneylenders Help?

    While the Registry of Moneylenders does not have the mandate to negotiate on your behalf, you can approach organisations like Credit Counselling Singapore for tips on managing your debt.


    Finding yourself unable to repay a loan can be a stressful situation. However, with the right approach and assistance, it’s a situation that can be managed effectively. At Credit Hub Capital, we believe in providing reasonable loans that you can comfortably repay. Contact us today for more information on our flexible loan repayment structures.