Licensed Money Lenders in Singapore
A Beginner's Guide to Smart Moneylending Solutions in Singapore
Dealing with money can be complicated. It gets even more difficult when you need to shell out cash that you only do not have. No matter how much you try to prepare yourself for sudden emergency expenses, there’s always going to be a case when your cash on hand isn’t enough. In such times, you will need the help of dependable and licensed moneylenders – people who will not exploit your vulnerability to their advantage.
Things to consider before seeking moneylending solutions for your financial situation
Desperate financial situations would require immediate cash disbursement, and it is during these times when moneylending is one of the first things that come to mind. After all, what could be the harm in borrowing money from companies and institutions that have been licensed and accredited by the government? The short answer is this: a lot of things, actually.
You must understand that the moneylending industry, just like other institutions, isn’t giving you access to fast cash out of the goodness of its heart. There’s always going to be the business aspect of moneylending. There is a certain set of rules that must be followed. You need to make sure that you strictly comply with these requirements.
To help you decide whether or not to consider licensed moneylenders for your financial situation, here are some things you should think about:
Do you have access to government-backed financial assistance schemes?
There are many reasons why people need more money than what they currently have. It can be for an urgent medical emergency. It can also be used for investing in businesses that you have faith in. Right now, Singapore has its own government-backed loan systems that its people can take advantage of for business purposes. Some of these include the SME Micro Loans, SME Working Capital Loan, Loan Insurance Scheme, and SME Venture Loan.
If you think you qualify for these business loans, try approaching these government-backed financial institutions first before ultimately deciding on a moneylending company. Research more on alternative ways to get the amount of money you need first before approaching a moneylender.
Have you read the loan contract from the moneylending institution thoroughly?
You must know that you are obliged by law to strictly meet every terms and requirement written in your loan contract. Before committing to a loan contract with a moneylending company, make sure that you can abide by the terms. Otherwise, your borrowed money can become an even bigger burden for you and your financial situation.
Make sure that you let your chosen moneylender explain the terms to you in words you can understand. They are legally obliged to make sure that you understand all terms, schedules, and interest rates written in the contract.
Have you looked around for the best moneylending offer available?
You may think that the first moneylending offer that falls into your lap is good enough, but you’ll come to find that there are actually a lot more moneylending companies that offer better options for borrowers like you. Shop around for moneylenders first and find the one that offers the best terms and conditions.
Finding the right moneylender to help you solve your financial issue
As mentioned, you should look around for your moneylending options before committing to a moneylending company. The government has sanctioned moneylending for companies that meet a set of criteria. You just have to make sure that your chosen company is included in the list of accredited lenders.
Here are some of the considerations you should look into in order to find the best moneylending company for your financial needs:
Your chosen moneylender must be licensed
By now, you should know that borrowing from unlicensed moneylenders is illegal in Singapore. There’s actually a database that shows you the most recent list of the accredited moneylenders in the country. Look into the latest list released by the Ministry of Law now to see if the moneylender you’re in current contact with is authorized by the state.
Read client reviews of your potential moneylending service provider
The best people to ask when discussing moneylending services are those who have experienced the whole ordeal themselves. That is the reason why reading unbiased reviews can be extremely helpful. You’ll find the best and worst points of each company, and be more informed about your choice later on.
Make sure that your moneylender is reliable and honest
No matter how strict the licensing process for moneylending companies is, the government wouldn’t be able to track the individual performances of every single one of them. For that reason, there may be moneylending companies that look good on paper, but are actually unprofessional in person.
If you see or hear your moneylenders behaving in a threatening or seedy manner, you have the power to report them to the government immediately. Remember, however, that:
- They aren’t allowed to ask for your SingPass ID and/or password.
- They should never ask you to sign on an incomplete loan Note of Contract
- Moneylending companies shouldn’t keep the original copy of your personal ID documents (passport, work permit, driver’s license, NRIC card, etc.)
- Moneylending companies should always give you a copy of the Note of Contract before granting you a loan. They should also explain all terms and conditions clearly to the client before they can finally grant the loan.
- Moneylending companies aren’t allowed to grant loans without checking your credentials and records first. They must exercise due diligence when granting loans to potential clients. That means that approving a loan through SMS, email, or through a phone call is not allowed.
A licensed moneylender should study your loan application first, as well as your supporting documents like income tax assessment before deciding on granting your loan request.
If you encounter any of these issues from the government’s list of approved moneylending companies, you may report them to the Singapore Police Force immediately.
Types of loans you can get from licensed moneylenders
There are various types of loans that you can get, all with slightly varying requirements. In order to get the best deal for your financial need, you need to find the most appropriate type of loan for your situation.
Here are some of the most common types of loans that licensed moneylenders would be able to provide to you:
Personal loans are usually given as a single lump sum. You won’t need to put up items or properties as a form of collateral for this type of deal. This is useful when you need to pay something through cash as fast as possible. Usually, people use personal loans in order to pay for accidents, medical bills, credit card bills, and even personal debts.
Cash advance (sometimes called instant cash loan) allows certain individuals to borrow an amount of money based on their income levels. Usually, your existing credit score wouldn’t factor in when applying for a cash advance. This type of loan has a higher interest rate compared to other types of loans.
Payday loans are often used by people when paying for bills and everyday expenditures that can’t be delayed until the next payday. People who take a payday loan worth less than their monthly salary usually get their applications approved or authorized faster.
For foreigners, getting loans isn’t as easy as it is for locals. Since you do not have an existing credit history nor do you have income statements in Singapore, normal loan companies wouldn’t be able to approve your application right away. Moneylenders can have access to foreigner loans as long as they have a valid work permit, employment pass, proof of residence, and other common personal documents.
Apart from these types of loans, there are others that you should look into when deciding the best kind of loan for your financial situation. Look up debt consolidation and bridging loans, among others, when you study existing trends and rules regarding borrowing money.
Benefits of getting loans from licensed moneylenders
Borrowing money is never easy. However, seeking the assistance of licensed moneylenders can lighten the burden of looking for a fast and dependable cash source. Still on the fence when it comes to approaching legal moneylenders in Singapore? Here are some reasons why you should try to do so:
Perhaps one of the biggest selling points of licensed moneylending in Singapore is the quick release and disbursement of the cash you will need for your financial problem. Compared to banks, there is a lot less red tape and steps when borrowing money from moneylenders.
Unlike banks which require collaterals and a long list of requirements before allowing the borrowing of money, licensed moneylenders get their request approved with just a couple of documents. Some of the most common requirements you’ll need in order to process this is your proof of residence, ID, pay stubs, and tax returns.
Competitive interest rates
Licensed moneylenders more or less have a standard or average interest rate across the board. Depending on the moneylending company you’ll approach, there may be slight differences. The rates, however, are going to be more or less the same. That’s because the interest rates in this industry are extremely competitive. In order to entice clients, they have to offer the best possible rates they can provide.
What’s also great about licensed moneylenders is that people from the lower end of the economic spectrum has a higher chance of getting their loan requests approved compared to when applying on established banks. Since there is practically no asset needed for some types of moneylending loan deals, these people would be able to get approved forms regardless if they have a good or bad credit score.
How much you can borrow from licensed moneylenders
Now that you know the basics about moneylending in Singapore, you may ask: at the end of the day, how much money will I be able to borrow through this scheme?
The answers differ depending on your current financial situation. If you get secured loans using some of your properties as collateral, you can borrow almost any amount of money. However, for unsecured loans, there’s a maximum amount that you may borrow at any time across Singapore.
If you earn less than $10,000 a year, you can only borrow $3,000 if you’re a citizen or permanent resident, and $1500 if you’re a foreigner. If you have at least $10,000 but earn less than $20,000, you can borrow $3,000 if you’re a Singaporean citizen or permanent resident. For foreigners, they can borrow up to $3,000. To those people who earn more than $20,000 a year, they can borrow at an amount 6 times their monthly income, both for permanent citizens and foreigners.
Interest rates and fees
Moneylenders have an interest ceiling of 4% per month for unsecured loans. If the borrower fails to pay the loan on time, they can charge an additional interest rate on the amount that is repaid late. Some of the other fees that moneylenders can charge you are the following:
- Late repayment (not exceeding $60 for each late payment per month)
- Admin fee 10% or less of the principal loan
Look for the best licensed moneylenders around your area now
If you’re ever in need of fast cash for your immediate emergency, or if you want to invest on your future through business loans, seeking the help of licensed moneylenders is an option that you should consider.
Singapore has one of the best and most organised moneylending systems in the world. Look through our directory of licensed moneylenders today to know if you can find a moneylending company that would suit your taste.
Do you need assistance in choosing the best moneylending company for you? Contact us now and let us help you decide!