When seeking a loan, you need to consider getting one from a licensed moneylender. The unlicensed moneylenders can easily frustrate you, and you won’t like it.
You need to know how to differentiate between licensed and unlicensed moneylenders in Singapore. That will save you from a lot of issues when getting loans, interest rates, and paying them back.
You can decide to go to a bank or other reputable financial institution like SGP credit Singapore Pte LTD to get funds. If you opt for unlicensed moneylenders, have in mind that they aren’t legal entities. Therefore, they can even con you easily.
Just ensure you browse through the licensed moneylenders to know the most ideal financial partner for you. Always be careful to prevent falling victim to unlicensed money lending in Singapore.
The Risk Associated With Unlicensed Moneylenders
Certain risks come with associating with an unlicensed moneylender.
1. Lose your money
In as much as some unlicensed moneylenders can provide fair deals. In most cases, you may end up losing your money. This is because in some cases when you approach an unlicensed moneylender, they will ask for the processing fee before the money transaction happens.
After you get the cash, they might cease speaking to you. That’s not right, because if you just talked through the phone and got the loan, they can come up with false claims on how the loan processing was done.
With licensed moneylenders, there are physical documents that are normally signed to ensure transparency. However, without such documentation, you may be forced to pay more than required.
2. Pay High-Interest Rates And Fees.
All financial institutions have interest rates based on the money you take out as a loan. Some are normally fair, while some are unfair. However, the unlicensed moneylenders can easily take advantage of this and charge a large interest rate as compared to the licensed moneylenders.
In the case that you have no documentation with the unlicensed moneylender, they can harass you to pay a larger fee than you should. The law limits in Singapore only allow an interest rate of 4% per month. However, for them, they might charge more. In addition, you may end up paying more fees than required.
If it’s a personal loan, the loan processing fee should not exceed 10% of the principal amount, the late payment fee must not exceed $60, and so on. Therefore, you need to be careful. The unlicensed moneylenders never follow this.
With an unlicensed moneylender, you can easily get harassed when you don’t pay up the loan on time. Unlicensed moneylenders don’t provide a clear contract. Therefore, if you are not careful, they will come up with issues that you didn’t know at the start. That’s why it is important to ask for the terms and conditions and the policies before taking up any loan.
If you assume all these and just run to get the loan, you are going to fall short as a victim. Also, in the case that you disclose any sensitive personal data, the unlicensed moneylender can use it against you.
However, if you are dealing with a licensed moneylender, you are assured that your data will be safe. Your bank details should be kept a secret, however, unlicensed moneylenders can compromise that.
4. Hidden Agendas
In most cases, you find that the unlicensed moneylenders tend to have some hidden agenda. You may find that they don’t answer some questions clearly, therefore you go in with insufficient data. There might be some hidden costs that the moneylender doesn’t want to tell you about.
Also, unlike licensed moneylenders who won’t disturb you after you have finished paying the loan. The unlicensed moneylenders can continue promoting some loan offers even after you have paid the full amount.
They might even keep messaging you so frequently. This is a form of pressure on you. This can even lead to you losing your peace of mind.
What To Do To Avoid Unlicensed Moneylenders.
To avoid falling prey to unlicensed moneylenders, consider checking the list of licensed moneylenders. Also, try to gather reviews and do thorough research before signing up with the moneylenders.
You need to be careful regardless of whether it is a bank or other financial institution. Knowledge is key, and once you know what you are signing up for, things will be easier to handle. Also, try and browse through the moneylender’s website or go to the physical address before accepting any loan terms.
This will save you a lot. Also, try your best to discuss the general terms of the loan. Moreover, be assured that no licensed organization can ask for your Sing pass user ID or password. Additionally, try and avoid their promotional phone calls.
You may end up taking a loan that you didn’t need in the first place. If you can avoid the unlicensed moneylenders, please avoid them
How To Deal With Unlicensed Moneylenders
In the case that you find you have fallen victim to the unlicensed moneylender, don’t worry, it’s solvable:
Step 1: Identify The Legitimacy Of The Moneylender
First, identify whether the moneylender is licensed or unlicensed through the official website. This will let you know whether the moneylender is legit or not.
Step 2: Report The Unlicensed Money Lender
Report the loan shark to the authorities once you verify that they are unlicensed and were harassing you. It will be much easier to deal with them using the authority’s help.
However, only do this when they disturb you and aren’t legit. In the case that they are legit, there is no need to report them.
Step 3: Notice Any Form Of Harassment
Even if they harass you, try not to fall prey to their demands or tactics. Just try and stay calm. If you can manage to pay the loan, pay it to get them off your sleeve. However, if they are harassing you or taking matters into their own hands, you can consider consulting the authority.
Some ways can include taking your property, locking your gate with a lock, causing you shame, harassing you at work, intimidating your loved ones, sending threats, or posting your photos online for not paying the loan.
Step 4: Get Assistance From The Social Services Agencies
If it reaches that point, stop paying the payments to the loan shark. Then try and get assistance from the social services agencies. You can get advice on how to handle the situation.
When getting a loan, try and learn more about the moneylender to prevent you from falling victim to loan sharks that can frustrate you. However, with licensed moneylenders, you have no worries at all.
Also, always be careful when sharing your details with any financial institutions because they can even use them against you and that won’t be alright. Always be careful not to fall victim to unlicensed money lending in Singapore. Just be careful about your finances.