The most common problems people encounter when tying up with unauthorized moneylenders are unending harassment. We heard so many harassment issues involving unknown loan sharks, we even see this in movies, but this kind horror is happening in real life.
Remember that no matter how long the process or the meticulous list of requirements a licensed moneylender asks from you, you can never deny the peace of mind you’ll earn knowing you are protected by the law and that you’re dealing with a company that would not put their license at risk.
Still not convinced? Here are 10 benefits of borrowing from a licensed money lenders and the advantages of dealing with money lenders that
There are thousands of unregistered money lenders in Singapore alone. They usually present themselves as reputable businessmen to take advantage of someone’s financial crisis.
You may not know it, but these opportunists usually earn millions through unimaginably high interest rates from their victim’s debt.
Here are some characteristics of a loan shark:
- No contract or documents
- Would offer you a large chunk of money
- No office address
- Over the top interest rate and unjustifiable charges
- No licensed number issued by Ministry of law
By avoiding loan sharks, you can save yourself from future terrifying situations such as being harassed when you have problems with paying debts. But just to be sure, here‘s the complete list of licensed moneylenders in Singapore.
One of the advantages of borrowing from a licensed money lender is skipping the meticulous and tedious application procedure. People have respective reactions when they hear the word ‘licensed’ — it could be a relief for some, while others might think that dealing with a legitimate company or an official business may ask for loads of paperwork.
Good news is that money lenders these days have fewer requirements than banks. They would usually give you a short list for your identification and verification. Also, they would ask you about the essential details such as your source of income.
Another advantage of getting loans from an authorized money lender in Singapore is that you won’t need to have a high credit score. Unlike in banks, money lending companies won’t have to dig deeper in your credit history. As long as you have a stable income, you’re good to go. But if you have a high score, that could be an additional point.
If you’re targeting a secured loan, you are allowed to borrow any amount. For unsecured loans, here is a table provided by Ministry of Law Singapore, a government agency website, of the total maximum credit that you may borrow:
|Borrower’s Annual Income||Singapore Citizens and Permanent Residents||Foreigners Residing in Singapore|
|Less than $10,000||$3,000||$500|
|At least $10,000 and less than $20,000||$3,000|
|At least $20,000||6 times monthly income||6 times monthly income|
As stated in the Ministry of Law Singapore, moneylenders cannot exceed the 4% interest limit per month. Regardless of the borrower’s total income, this cap should apply. Furthermore, the nature of loans should not affect the interest rates, secured or not, the 4% cap should remain.
If the borrowers fail to settle the loans on time, the money lender company is allowed to charge 4% for each month that their loans are repaid late.
Get additional information about the full computation of interest rates from Ministry of Law Singapore.
Here are the permitted charges money lenders are allowed to impose according to Ministry of Law Singapore:
- a fee not exceeding $60 for each month of late payment;
- a fee not exceeding 10% of the principal of the loan when a loan is granted; and
- legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.
You may find additional information from Ministry of Law Singapore.
Out of all the benefits customers could get when they decide to borrow money from a licensed money lending company is having less time investment just to have the loan application approved. Especially if the customers are targeting urgent loans, a long and tedious process might give an additional burden.
If you need instant cash, among the benefits you could get when you borrow from licensed money lenders, is the quick disbursement of the money right after you signed the agreement. Just make sure you have read everything before signing a contract.
Out of the many reasons why you should choose official money lenders over an unregistered money lender, is the fact that money lenders offer repayment arrangements that are tailored fit to the situation and financial capabilities of the borrower, is the most ideal. Most money lenders in Singapore normally have 6-12 months repayment terms to make the monthly payment more affordable.
Aside from having low interest rates, among the important things we need to find when looking for a good money lender is their willingness to customize a loan package. Perhaps, the most customer friendly feature of a licensed money lender is that they can tweak the nature of the loan and their services.
Of course you may still opt to borrow from banks. But if you are looking for a much quicker way but don’t want to compromise your safety, a licensed moneylender is the way to go.
A good money lender will listen to its customer’s needs and will try to suggest a suitable arrangement based on the financial capabilities of the borrower. You, as the client, should be honest enough to disclose necessary details that could help the lender determine the best plan for you.
Always keep in mind that a ‘licensed’ money lender is a safe choice.