The most basic activities to sustain life need to be carried out by paying for them, like paying for food, paying rent and other bills, paying for your daily commute, etc. These are expenses that cannot be ignored and over time add up to be a huge sum of money. Living in an expensive city adds to this burden and sometimes it may become quite difficult to pay off all your dues all by yourself. If you live in Singapore, you know that it is one of the most expensive cities in the world to live in. Living in such a place, the pressure of paying your dues or fulfilling any other activity that requires money can be overbearing. This is where the services of a licensed money lender Singapore will be helpful.
Everybody tends to borrow money at some point in their life, be it from friends and family or from a bank. There’s no shame in getting some help. You can go to a bank or to a moneylender for personal loans in Singapore. These institutions have various plans and schemes for you to choose from; you will find a plan that suits your needs and is convenient for you to pay back. Many people like to go to a moneylender when they need a loan on an urgent basis. A money lender can lend you amounts that will fulfill your short term needs. Moneylenders are popular in Singapore as they can provide faster personal loans with minimal paperwork and at better interest rates and convenient repayment schedules.
There are plenty of money lenders in the market, but can you trust all of them? Probably not. A licensed money lender is the safest option, as they are registered with the Ministry of Law, so you can be assured that the organisation is legit and is not a fraud. Since money lending is a common practice in Singapore, fraudsters look at it as an opportunity to scam genuine borrowers. Borrowers should beware of such illegal money lenders, also known as ‘loan sharks’. If you are confused and don’t know how to identify an illegal money lender, the following tips will help you in doing so.
Here’s how to identify an illegal money lender:
- Interest rates: Typically, a moneylender cannot charge you interest rates that are more than the market rate. A licensed money lender is allowed to charge interest rates up to 4% in Singapore. If a money lender is asking for anything more than that, it is an indication that something is fishy. A legit money lender has to abide by the law and is allowed to charge only up to 4% interest per month, even for late payments. An illegal money lender may charge you well above that limit and levy extra charges for late payments.
- Paperwork: Documentation and verifying paperwork is an unavoidable aspect of money lending. Every money lender has to do some of the other paperwork before lending you the money. If a money lender is not asking to verify your documents and is willing to lend you money without paperwork, you should know that the moneylender may be illegally doing so.
- Contract: A licensed money lender will explain the terms of money lending before actually lending the money. They will also have you sign a contract that states the terms of the money lending agreement, the interest rates, repayment schedule, and other official details. It is mandatory to do so. If a moneylender offers to lend you money without a contract, it is highly likely that the person is an illegal money lender.
- Transparent: When it comes to lending and borrowing money, it is in the best interest of both parties to clearly know the terms and conditions and the rules and regulations binding them in the money lending contract. A licensed money lender will walk you through the terms and conditions of the loan very clearly and will not hide any details or the agreement. They are bound by law to provide you with a contract containing all the details, so there is full transparency. But an illegal money lender won’t provide you a contract. Instead, these loan sharks may send you PDF files on your phone that supposedly give you details about loan plans. Be wary of this, as it is all part of a scam, and do not make any payments to such money lenders in advance.
- Advertisement: As per the rules of the Ministry of Law, a licensed money lender Singapore is allowed to carry out advertisement activities through business or consumer directories online or in print media, money lender’s website, and on their business premises. If a money lender is using any other method of advertising, such as text messages, emails, sending files through Whatsapp or any other social media platform, that money lender is probably an illegal one.
- Loan amount: A money lender can offer you short-term personal loans Singapore. A licensed money lender is allowed to lend an amount only up to the maximum limit, which is decided according to the person’s annual income. A licensed money lender cannot lend you an amount higher than the set limit. If a money lender is willing to offer you a loan that exceeds this limit or is ready to lend you money regardless of your annual income or without checking your creditworthiness, it may be a sign that he is carrying out such operations illegally.
- Debt collection: As per the rules of the MinLaw, a money lender may involve debt collection agencies if the borrower refuses to pay, but cannot use aggressive means of doing so. An illegal money lender may use aggressive behavior and abusive language when it comes to debt collection.
- Place of business: A licensed money lender will always have their own registered office out of where they carry out their business activities. An illegal money lender does not have a dedicated place of business and does not operate through official means.