From time to time you may need to borrow some cash. Therefore, you will find yourself searching for legal lenders. Differentiating licensed lenders and loan sharks is not a difficult task. The process is easy. But, when in trouble, staying away from loan sharks can be hard.
While you are having a hard time differentiating the two. The following tips will help you in recognizing the differences.
The legal lenders are on the list of the Law Ministry’s website. Make sure you check their website. This way you will confirm the lender is listed before you contact them. When the lender isn’t listed, it’s possible they are loan sharks.
The only situation that could lead to approved moneylenders not listed. It’s when they recently got their license. It could mean that it hasn’t been updated using the licensing information. When this is the case, contact the ministry to confirm. This way you will tell if they are genuine moneylenders.
Advertising Limitations For Licensed Lenders
The advertising restrictions for certified lender allow 3 channels. They can advertise only through these media. These include consumer or business directories. Additionally, they can use their websites for the adverts. Or use the exterior and within their business premises to advertise.
You could differentiate the two by looking at adverts you receive. Should you get flyers and SMSes providing you loans. Then it’s prone to be a loan shark or delinquent licensed lender. Consider filing a complaint with Singaporean Police Force or the Singaporean Law Ministry. Delinquent licensed moneylenders can be put under investigation.
Usually, the Moneylender Registry will carry this out. And the loan sharks are investigated by the Singaporean Police.
Compliant with the law, licensed lenders should have offices. Their offices have to match the address they registered. They should ensure it’s the same what’s on the Law Ministry’s website. Normally, a certified lender will do their business transactions here. This is well-maintained space within the given building. This is like to accountants and lawyers have offices.
Your primary meeting will often be done in the office. Also during the contract-signing phase of the process, it will be used. They, however, will contact you by telephone or email afterwards.
Then again loan sharks often won’t have an office space. Neither will they have a fixed phone line. Because of their business is run illegally. They always do not need to get worried about what is stated by the law. Therefore, the permissible requirement of an office doesn’t pertain to them.
Should you come across someone who says to be in money lending business. Yet they run their business operation completely online. Then be cautious and when try not to deal with them. They might also openly confess that they don’t have an office. There forth proceed with caution. It’s possible this is a loan shark. or it may be someone who conducts illegal money lending business.
Interest Rates Charged
Loan sharks often charge very high rate of interest. They might even offer you a 40 percent interest a month. This type of lender will have no written documents. Also, they only will rely on spoken commitment. It’s because the written documents may not be official. This is because loan sharks have not been issued with a license.
The licenses are issued by Law Ministry. With a license, the loan sharks will be able to conduct lending services. In addition, it means they will have to adhere to regulations. These regulations are set by Moneylenders’ Registry.
The Loan Terms And Application Process
The Singaporean law requires moneylenders to use easy language. The language needs to be understandable. And it’s especially useful when they are explaining loan terms. This will cover providing responses to all questions. This could include all unclear terms regarding your personal loan. The lender needs to explain further the rates of interest. They should also touch on repayment methods. And lastly, explain the repayment period of the loan.
As you come across a money lender giving you a loan contract. And he does not take time to explain the loan terms. Be sure to leave with no intention to go back. Such a lender will possibly be a loan shark.
Often time’s loan sharks will possibly not take time for this. They will not want to work through the questions you have. Neither will they want to work on your personal loan settlement scheme. They instead will tend to brush you using patronizing phrases.
When doubtful, do trust your instincts and make sure you walk away. It will save you a lot of grief. This is because dealing with a loan shark can be your ruin.
Use Of Abusive Language And Threats
Nearly all loan sharks rely on intimidating behaviour. They also use abusive language and threats when collecting the fees. Professional dealings do not permit licensed moneylenders to do as such. Therefore they avoid these tactics when collecting the debt money. Should you encounter a lender who is known for using these tactics. These can include threatening and abusing clients.
Be sure to avoid dealing with this lender. It could very well be a loan shark. Unfortunately, such actions usually begin after the loan is given. They will then confirm your personal loan then issue it fast. Always make sure you check the Moneylenders Registry. This way you can confirm that the lender is listed as a certified.
Licensed moneylenders are required to have loan contract. The Singaporean law requires the lender to have their customers sign it. This agreement is often written by a lawyer. And it will include details like:
- The repayment period set for the loan
- The rates charged on the loan
- costs to be charged in case of late repayment
While somebody offers you loan money. And they do not draft a contract or they ask that you sign a blank paper. Or they could give you an incomplete contract, don’t take their offer. These individual doesn’t fulfill requirements of a certified moneylender. This individual could be a loan shark.