Why is borrowing from an unlicensed money lender a bad idea?
Why do many Singaporeans turn to unlicensed money lenders to get some quick cash? Well, in Singapore, borrowing money from banks can be a very tedious process. For one, there is a ton of paperwork involved, and banks usually require you to be in decent financial standing to borrow from them. It also takes banks ages to approve a loan, and there is no guarantee that you will be approved. As such, some people approach money lenders when they need to take out a quick loan. However, it can be dangerous to borrow from an unlicensed money lender. What is an Unlicensed Money Lender? Unlicensed money lenders are better known as ah longs or loan sharks. These money lenders charge very high interest rates, possibly up to 40% of your loan. Additionally, they can resort to using force and threats if you do not pay them back on time. One famous example is the “O$P$” spray paint on one’s house or property. Loan sharks may even hang pig’s heads outside one’s door if they are late for payment. Unfortunately, it is usually easier to make a deal with an unlicensed money lender than with a bank, as ah longs do not care much about your financial standing or paperwork, only that they will be able to get their money back with a high interest rate. As a result, Singaporeans that are unable to make enough money to repay both their loans and high interest usually end up constantly being harassed by these loan sharks. You probably do not wish to fall into the predicament of being unable to repay a loan shark, but what if you are also unable to borrow money from banks? Who can you turn to then? Licensed Money Lenders Thinking of money lenders may bring to mind ah longs or loan sharks, but actually, not all money lenders are bad. There are licensed money lenders out there who are required to abide strictly by Singapore’s law, under Ch. 11.2.3 Section 2 of the Law of Credit Security, Commercial Law of Singapore. Most of these licensed money lenders are credit institutions that have been approved by Singapore’s law. Why Licensed Money Lenders? Licensed money lenders usually do not restrict the amount of money you can borrow. Unlike banks, they are more likely to offer small loans as it is also less of a loss to them if the deal becomes a bad debt. However, if you are looking for a larger sum of money, they are probably not a good option due to their higher interest rate. You can also get your loan approved much faster with licensed money lenders than you would with a bank. Since the loan amounts are smaller, they do not check as much paperwork and you can even get the loan approved within half an hour! Additionally, licensed money lenders are more lenient with your financial standing. Since they tend to cater to individuals that are unable to borrow from banks, they do not pay as much attention to poor credit ratings. However, you should still make sure that you do not have any outstanding loans or a large credit card debt.
How to check the validity of licensed money lenders?
In spite of putting our best efforts, at times we do seek help to meet our immediate or sudden financial needs. This is when a licensed money lender comes to the rescue! You may also consider borrowing from a financial institution like bank though, it might consume a bit more of your time and energy to fill those papers and submit documents with a fixed rate of interest charged as per the loan tenure. Taking financial help from reputable money lenders make it a lot easier and convenient in terms of flexible repayment options, low rate of interest, flexible loan tenure and amount as per your convenience. Having said that, we do fall for institutions that charge a lot more than the standard market price when borrow from them, however, you should know the difference between a genuine (or certified) and a hyped money lender, to avoid falling into a fiscal pitfall. Also, do not believe any sort of myth that you may have regarding borrowing money from lenders; as they say, “Moneylenders are not banks, neither are they loan sharks!” What to know from your licensed money lenders in Singapore? If you put up in Singapore, this is probably one of the best options to go about when you are in an immediate need of cash! You are most likely to find a lot of licensed money lenders in Singapore, just check a few facts, reviews, terms of repayment, documents required and interest rates with them prior hand to understand the process completely. Do not hesitate to ask questions in case you need clarity on any hidden clause or fee(s) for that matter! Loan representatives are available to your service round the clock, make sure you do your homework well to enjoy the benefits of borrowing money from a reputable financial lender. Make sure you know your purpose in borrowing money! This is the first and most important thing you need to do. Once you know the purpose, the rest of the things and parameters will follow. You would be in a better position to take maximum advantage from your loan amount. Also, a certified money lender comes with a lot of benefits! How to check whether the money lender is licensed or not? Well, to check and confirm that the license of a money lender is valid or not, you may see the details on the Singaporean Law Ministry website to get a clear idea of the authenticity. They usually offer regular updates (every month) on the licensed lenders all across Singapore. By examining this, you may save yourself some time and any later hassle that would have been troublesome if figured out later (like any hidden charges or elevated interest rates than what was shown earlier). Also, these days if you have proper work permit and regular cash inflow in your bank account, a few of the loans are readily available online, in case your money lender asks you to sign any black or additional papers, just keep a check on what the terms and conditions are and why is this needed! Being a little alert helps in the long run for sure.
How to avoid scam while looking for money lender in Singapore?
We all need money sometime or the other, what if the money need is very urgent? You would like for borrowing feasibility from a financial institution, banks, and money lenders and so on. In case you are not cordial with the terms and conditions of your bank then go for a licensed money lender in Singapore. Also, make sure you consider certain parameters and double-check on the potential ways to avoid any scam or fake scheme before borrowing any money; 1. Credit check- not necessary Most reasonable lenders check your credit statement to regulate and analyze if you’re in a position to repay them or not! A high credit score showcases that you repay your arrears on time, without any irregularity. In case a money lender doesn’t want your credit score, then it’s an alarming sign! A scammer usually does not pay much attention to your solvency as it is required after your personal information and that’s what he needs! 2. The moneylender does not have a government-issued license The Singapore government need creditors to list themselves for a license. In case you find a corporate is not licensed to function in Singapore then it is better not to respond to its loaning queries. You might just be got targeted by a fraudulent website via a business’s name to make cash. Approved money lenders in Singapore usually mention their authorization number on their websites. 3. Your loan offer details are incomplete As per the Moneylenders Act, all lenders are required to arrange for complete terms and conditions applicable if anyone borrows a loan, together with the closing cost of the principal and interest before one signs the loan agreement. If your loan offer lacks details or has incomplete information, then it might work out adversely thereby, always know and understand every term of the loan from your licensed money lender before applying for a loan. 4. The physical address of money lender not available If a creditor is unable to provide you a physical address for verification or contact information, then you might need to reconsider your loan application. Probable scammers revel as less of information as possible so that it gets difficult to trace them or pursue any legal action for that matter! 5. The loan offer expires soon or is for limited time Often loan offers that are for a limited time only or offers that need you to act soon sounds somewhat like a fraudulent offer! Licensed money lenders in Singapore provide loan offers and discounts from time to time so you don’t have to rush things up! Keep in mind the above-mentioned pointers and be a bit careful as to whom do you borrow money from! For more information on what types of loan can you avail or know more on the interest rates, book your appointment with a loan officer or money lender in Singapore today! Apply for a loan without any hassle!
Things You Must Know About Reputable Money Lenders
The process of finding credible money lending firms is one of the hardest nuts to crack while trying to source funds. In Singapore alone, there is an estimate of about one thousand loan sharks waiting to deceive borrowers while there are only about 160 accredited lending companies. Now, this is the more reason people prefer transacting with banks. But not to worry, I’ll be pointing out some nuggets with which you can point out responsible money lenders from the rest. With these, you can escape the traps of loan sharks. Check out for licenses legalizing the company’s incorporation A reputable money lender will have the necessary permits and certifications to operate. Check out for listings of licensed money lending institutions in government directory. The companies that make the list are those that are certified by the Ministry of Law. This is a major difference between responsible and irresponsible money lenders. Online presence and the authenticity of the company’s website The company’s website is another important pointer. Most loan sharks do not have websites at all, and others that do, do not always have solid information on their pages. Proper scrutiny of the web page will confirm or dispel your doubts. Check out for reviews too. A responsible money lending firm will have realistic reviews from satisfied borrowers. Responsible money lender s will offer realistic rates and terms Notwithstanding the fact that these licensed money lenders are trying to stay competitive and within the government’s specified lending rate limit, do not expect ridiculously low rates. This is another way to know responsible money lenders. They have flexible terms and will propose terms that will favor both parties but once they begin to try and buy you over with ridiculously low rates, or are asking that up to some amount of money before your deal is sealed, then you are onto the wrong ones. Please flee for dear life. Physical offices Any money lender that requests that you complete all of your application processes online and that there is no need for physical contacts between you both is not a responsible money lender. It is not professional and so don’t indulge in such transactions. Go to your money lender’s office to confirm the company’s authenticity. With the nuggets above, you should be able to make wise decisions with your choice of money lenders. Stay careful and resist the temptation not to double-check.