Many legal lending institutions in Singapore have developed a reputation for being honest in their business dealings. However, you will often come to encounter a lender who acts as if to be legal but is an illegal lender.
In Singapore, the licensed moneylenders are licensed by the Registrar of Money Lenders in Singapore. They are obligated to adhere to the set rules for lending, service charges, and interest rates for them to operate.
Unfortunately, the ill-famed representation of money lenders is often connected to mobsters and untrustworthy loan sharks. These represent them as lenders who will not waver to use vandalism and some other form of harassment for them to get their loaned money.
How To Recognize Illegal Money Lenders
The ideal way is for you to do your research. Do not take personal loans from that first lender you encounter. When you are pressed for time, do the best next thing. Watch out for these things that will show that the lender you choose is genuine.
It is recommended for borrowers in Singapore, to first determine the lender’s reputation prior to you choose a specific moneylender. You should look at the lender’s license in order to affirm its validness and that the lender is approved to operate legally. The license should have been granted by the Moneylender’s Registry.
In addition, you should choose a moneylender company that has been in operation for several years. This is because the duration of time in a business will also show their performance as well as their good repute.
Adhere To Money Lending Rules
Different from loan sharks, an honest moneylender will follow the set lending rules. They adhere to guidelines set by the law ministry; this includes charging the correct amount as processing fees or maintaining the lending limits. They also use right channels to advertising and never place misleading adverts. Additionally, they keep proper loan records.
Offer Free Loan Advice and Consultation
Unscrupulous lending companies are more concerned about making a sale or even pushing unappealing personal loan deals. To them, you are another money minting machine. Licensed money lending companies believe in professionally serving their clients. They will thus offer authentic advice concerning loans that will best address your business goals or personal needs. They will do this free of charge.
Legal moneylenders can set their processing fees, provided that it is 10 percent of the principal loan amount and less. But you can be sure that illegal lenders will quote the highest rates possible. A reputable lending company will not exploit your urgent need and bill you higher rates for smaller borrowing.
Easy to Find
Licensed moneylenders are proud of their work. They do not run their businesses from some dingy locations like the Ah-Longs. They do have a brick and mortar office for you to visit and even have staff members that are willing to assist you. Many moneylenders have embraced the use of the Internet and now command an online presence. Take a look at their website ahead of deciding to work with them.
Records And Gives Proof Of Loans You Take
A genuine moneylender will give you a copy of the loan contract immediately after your personal loan has been approved. These lenders will not retain any of their client’s original documents much longer than it is needed. They also will give you proper receipts for every loan repayment and for any other relevant charges.
No Hidden Costs
Few lenders make up additional loan clauses in fine print and fail to inform you. Such hidden terms and charges might take effect after the personal loan has been approved or even during the repayment period. Some caveats will include the first claim on any proceeds from asset or property sale. A reliable licensed moneylender makes sure they mention all fees and loan terms upfront.
Do Not Use Unlawful loan Recovery Methods
The major difference between reliable moneylenders and illegal ones is the post-lending conduct. Even when you miss a payment or delay making payment, licensed moneylenders will not use unlawful methods to recover their money. Intimidating methods and abusive language are not how they handle their loan recovery process. Look at the client reviews to eliminate bad lending companies.
Benefits Of Working With Licensed Moneylenders
More Tolerance For poor Credit Scores
Many borrowers know that credit scores affect their loan application procedure. Banks often scrutinize them prior to approving and they will not hesitate to plainly turn down an application if you have a very damaged rating.
But then, the licensed moneylenders are a lot more tolerant when looking at a client’s credit score. This is because the loan amount they offer in loan products are much smaller when compared to what banks offer. Former bankrupts will be able to get access to loan facilities offered by licensed moneylenders. Given that they are able to present their discharge letter.
Due to the reality that licensed money lenders primarily offer smaller personal loans amounts. Their turnaround as well as loan authorization process is very much fast-tracked. Additionally, they scarcely have any bureaucratic tiers of management personnel who have to extensively deliberate over the loan application you have submitted.
As you are dealing with licensed moneylenders, borrowers who readily have the necessary financial documents can get their personal loans authorized in a period of 30-minutes. The fast approval process helps to ensure that borrowers can obtain the sum of money they need to manage their pressing financial obligations.
They offer Smaller Loans
For most Singaporeans, licensed moneylenders are a much-needed resource for those seeking to obtain small loans. These personal loans can be used to handle minor things like car repairs, settling emergency medical bills, etc. Licensed moneylenders in Singapore often offer these low-risk loans in order to lessen the negative impact caused by any pending debts.
According to the Singaporean law, the regulations for the lending limit set for the licensed money lenders do not exceed 2-4 times the salary a borrower receives each month.