How To Choose A Licensed Money Lender Singapore

In need of quick cash? Don’t worry, there are ways where you can meet your needs.

In Singapore, there are places you can borrow money legally, but you want to make sure you’re going to a good one. A trustworthy lender will be upfront and honest with you about everything.

The tricky part is that there are a lot of lenders out there, and it can be overwhelming to pick the right one, especially for your first time. Let’s break down some things to consider so you can find the best fit for you.

Borrowing money can be scary, but in Singapore, there are safe and legal options. The key is to avoid loan sharks, also called “Ah Longs”. These are bad guys who don’t follow the rules and can be really aggressive if you can’t pay them back.

Instead, look for a licensed money lender Singapore. They’re like banks, but for smaller loans and sometimes for people with a trickier financial history. The government keeps a close eye on them to make sure they treat you fairly.

They can only charge a certain amount of interest, and they have to follow clear rules for how they collect payments if you miss one.

There’s an official list of these safe lenders on the Ministry of Law’s website. They update it regularly, so you know you’re getting the latest information. Don’t borrow money from anyone who isn’t on this list!

Is It Allowed For Licensed Money Lenders To Advertise Their Services?

Ever get bombarded with loan offers via text message or phone call? Those are huge red flags! They’re most likely from loan sharks trying to trap you in debt.

In Singapore, legit money lenders can only advertise in specific ways: on their websites, business directories, and signs at their actual office. If you see loan ads anywhere else, like on social media or random websites, those lenders are probably not following the rules.

Here’s what money lender sg can’t do to advertise:

Blast your phone with texts or calls.
Shove flyers in your hand.
Knock on your door trying to sell loans
Put up ads anywhere but their own office.
Pay for radio or TV commercials.
Sticky loan offers in newspapers or magazines

If a lender breaks these rules, they can get fined or even shut down completely. They also can’t lie in their ads. If they get caught making false promises, they could face a hefty fine and even jail time!

The bottom line is that if you see a loan ad that seems suspicious, it probably is. Stick with lenders who advertise according to the rules for your safety.

Costs And Interest Rates That Are Charged By Authorised Money Lenders

Borrowing money from a licensed money lender online has clear guidelines on fees and interest rates. Here’s the breakdown:

Interest: This is capped at 4% per month. They can only charge interest on the amount you still owe, not the whole loan amount.
Late payment fee: This can be up to $60 per month, but only if you miss a payment.
Loan approval fee: This can be up to 10% of the total loan amount, but that’s a one-time fee when your loan gets approved.

Most importantly, the total fees and interest you pay cannot be more than the amount you originally borrowed. So, you’ll never end up owing more than double what you borrowed!

Identifying the Signs That It Is a Loan Scam

Be careful not to fall for loan shark tricks because borrowing money can be stressful. Here are some red flags to watch out for:

Shady Lenders: Real lenders explain everything clearly beforehand, like interest rates and fees. They won’t pressure you into signing anything you don’t understand. If someone asks for a deposit upfront or sends you a loan contract over WhatsApp, walk away!
Sneaky Advertising: Licensed lenders can only advertise in specific places, like their website or on signs at their office. If you see loan ads on social media or random websites, those lenders are probably breaking the rules.
High Fees and Rates: Real lenders have limits on what they can charge. Interest rates are capped at 4% per month, and late fees can’t be more than $60. They can also only charge a one-time fee of up to 10% when your loan is approved. The total fees and interest should never be more than the amount you borrowed in the first place.
Unrealistic Loan Amounts: There are limits on how much you can borrow. If someone offers you a huge loan with no income verification, that’s a scam!

By knowing these red flags, you can avoid loan sharks and find a safe lender if you need to borrow money.

Is There a 24-Hour Money Lender?

Ever see those ads for super-fast, 24/7 loans? Those are probably scams! Here’s why:

In Singapore, there are no actual money lenders with offices open 24 hours a day. Real lenders might let you apply online anytime, but they’ll process it during business hours.

Here’s how to spot a loan scam:

Super-Speedy Approval: Real lenders will want to meet you and verify things before giving you a loan. If someone approves your loan over the phone or by text without meeting you, that’s a red flag!
No in-person meeting: Scammers won’t want to see you face-to-face. Real lenders will need you to come to their office to sign the paperwork.
24/7 Availability: This is a big sign of a scam. Real lenders have regular business hours.

If you’re looking for a loan, be careful and avoid these scams!

Steps To Take Prior To Applying For A Loan

Money lender loans can seem tempting for a quick fix, but hold on a sec! Here’s what to consider before you jump in:

Credit Check: Even for money-lender loans, your credit score matters. They see these loans as risky and prefer borrowers with a good credit history. Check your score with the Moneylenders Credit Bureau first.
Choose Wisely: Only borrow from licensed money lenders or banks. Shop around! Different lenders offer different interest rates and repayment terms.
Interest Rates: There are two types: flat and effective. Effective rates include things like compounding and fees, so it’s a more accurate picture of what you’ll pay overall. Use effective rates to compare loans.
Extra Fees: Beware of “free” loans! They often make up for it in fees like processing fees (deducted upfront) and late payment fees. Read the loan agreement carefully and understand all the charges.
Repayment Terms: Most lenders have a minimum loan term, like 12 months, even if you could pay it off faster. This means more interest for them. Consider other options, like a credit card that can pay off quickly.
The Contract: Don’t just sign on the dotted line! Get the lender to explain everything, and consider having a lawyer look over it to make sure there aren’t any hidden fees or unfair terms.

Looking for a loan but worried about loan sharks? Here are some red flags to watch out for to make sure you’re dealing with a legit money lender:

Check the Ministry of Law’s list: This is the easiest way. Their list of licensed lenders is updated monthly, so you know it’s current. Just compare the company’s name and information to what’s on the list.
Meet in person: Real lenders will want to see you face-to-face before finalising anything. You should also be able to visit their actual office. If they only deal online or over the phone, that’s a bad sign.·
Do Your Research: Look them up online and see what people are saying. Trustworthy companies will have a good reputation.
Never Sign a Blank Contract: Don’t sign anything until you understand everything and have a copy for yourself.
Protect Your Documents: Never give a lender your original ID (NRIC), driver’s license, work permit, or ATM card. They only need copies.

Discover also the guide in finding best licensed money lender near me.

Here are some other things illegal money lenders might do:

Hidden Fees: They might add extra charges without telling you upfront.
Missing Paperwork: They won’t give you a loan contract or any record of your payments.
Threats and violence: They might resort to scare tactics if you’re late on a payment.
Unclear Terms: They won’t be upfront about interest rates or loan details.
Blocked Payments: They might even try to stop you from paying your loan back on time.
Unnecessary Collateral: They might ask for collateral (like your car) even if your loan doesn’t require it.

By following these tips, you can avoid loan sharks and find a safe lender if you need to borrow money.

How To Proceed Once The Loan Has Been Approved

Here are a few things to keep in mind after your loan application was approved:

Double Check the Amount: Make sure the loan agreement matches the amount you requested. Sometimes lenders deduct a fee upfront, so factor that in.
Pay on time: This is crucial! Late payments add up quickly with extra fees and interest.
Get Receipts: Always ask for a receipt after every payment and check it for accuracy.
Yearly Statements: You should get a statement of your loan at least once a year. Review it carefully to make sure everything looks right.
Save Your Records: Keep all your receipts and statements. These are your proofs of payment.

If You Are Being Treated Unfairly, Where Can You Go To Get Help?

It is illegal for a money lender to threaten or harass you! Here’s what to do:·

Report It: If a money lender uses scare tactics, file a police report. These actions are serious and will be punished.
The Registry Helps: The Registry of Moneylenders investigates complaints, so don’t hesitate to report them as well.
Debt Help: If you’re struggling with a loan from a licensed money lender onlineand also have a bank loan, Credit Counselling Singapore (CCS) can help. They’ll create a plan to manage your debt.
Government Debt Programme: The Debt Repayment Scheme (DRS) is a government programme that lets you combine all your debts (up to $150,000 total) into one monthly payment.

Conclusion

It is tempting to look for quick answers from lenders who promise fast cash when you are confronted with emergencies that require immediate financial assistance. Numerous illegal lenders who frequently lack valid contracts and explicit terms advertise these loans. These kinds of cons can be very expensive to fall for.

A portal that allows Singaporeans to check whether or not a money lender is operating legally is made available by the Ministry of Law. This is done for the purpose of protecting individuals. You may rest assured that you are working with trustworthy lenders because this list is updated on a regular basis.