It is common for anyone to experience a cash crunch. There are situations when even routine expenses such as paying off bills can prove to be a challenge due to unavoidable circumstances. For instance, you might be faced with a medical situation where you need to pay hospital bills, or you might be short of funds and need cash for important expenditures. If you’re getting married, then too you would need to spend large amounts which may necessitate taking a legal personal loan in Singapore. In such instances, banks may not be the easiest option, especially if you need the funds urgently. This is where a licensed money lender in Singapore comes in as the ideal choice since moneylenders normally approve and disburse the loan faster than banks would.
However, there are concerns related to the genuineness of a money lender in Singapore as nobody wants to get trapped by the infamous loan sharks. It is easier to spot a licensed money lender in Singapore if you are alert enough and pay attention to some core differences as highlighted in this article.
Here’s how you can correctly identify a licensed loan company in Singapore:
The best money lender for you would be a loan company that is licensed and governed by the Ministry of Law (MinLaw). All such licensed moneylenders are listed on MinLaw’s website, and the list is updated on a monthly basis. You can check your loan company’s name on this list to know who is the best money lender for you and which one might be illegal.
Checking the loan company’s advertisements
This one is fairly simple and requires little effort. If you receive phone calls or text messages from someone claiming to be a licensed money lender in Singapore, chances are that it is not a legal business. As per the regulations of MinLaw (posted on their website), a loan company in Singapore is allowed to advertise only in the business/consumer directories (online/offline) or on websites that are owned by the moneylender.
The other option would be to advertise on the interior/exterior areas of the money lender’s office space such as on the wall, door, shutter, gate or window, etc. Also, you must thoroughly check the terms mentioned in the ads, and shouldn’t blindly trust whatever is publicised.
Interest rates and other fees
A registered loan company in Singapore can only charge the interest rates fixed by the Registry of Moneylenders. The limits are set at maximum monthly interest rates of 4% as well as an equal late interest rate subject to the late fee not being more than $60. The administrative charges can’t be more than 10% of the total loan disbursed and the money lenders in Singapore also need to explain all the interest rates and fees to their lenders. If there is a violation of any of the above terms then chances are that you are not dealing with a fraud company.
Physical Location of the Money Lender
As per the law, a loan company is required to have a physical business location, and that’s where you need to go once you are approved for a legal personal loan in Singapore. If a moneylender provides you with the loan amount by meeting at a random place or your own home, then chances are that it is not the best money lender for you.
Although you would have the facility of applying for the loan online, you would still be required to go to the registered office of the moneylender for a face-to-face verification. Any moneylender sending you an email or text message to confirm loan approval without any in-person visit is likely to be a fake and not the right choice.
Sharing of documents
A genuine loan company would always return your NRIC and other personal identification documents after verifying them. You will also get a loan contract and complete information on details such as the interest rate, repayment terms, late payment interest and term of the loan, etc. On the contrary, an illegal loan provider will, however, avoid sharing those details.
By focusing on these steps of identification, you can easily differentiate between an authentic loan provider and a loan shark.