How Do I Tell If A Licensed Moneylender Is Reliable Or Not?

When we run into financial emergencies, the last thing we need is for our loan application to be rejected. Getting a personal loan in Singapore can be easy or difficult, depending on the lender. To apply for a personal loan, you can get one from a bank in Singapore or from a reliable licensed money lender in Singapore.

Before you reach out to a licensed moneylender, remember to do your research because you will be legally obliged to fulfill any loan contract with them.

Loans, especially short-term loans, are the go-to solution when you need a few thousand dollars quickly to sort out an emergency. But how do you identify a reliable money lender? If you desperately need money and you don’t know which money lender to work with, we have got you.

This is a guide to help you borrow from a reliable and legal money lender. To help you decide who to work with, this article will guide you through the process of choosing a reliable money lender. This guide will look at questions you should ask when looking for a good lender and how to tell if they are reliable or not.

Steps To Take Before Borrowing From A Money Lender

Before you talk to a money lender here are a few things you should do.

1. Review your needs and decide on the type of loan you want.

Before you visit any money lender, review, and see how much you need to sort out your emergency. Is it a minor or a major emergency? For instance, if you need to renovate your house after a storm, then you will need to involve experts who will give you the exact amount you need.

2. Research on the type of loan

Once you have decided on what you need, visit a few money lenders, and get details on repayment terms. Ask about the interest, loan tenure, and penalties that apply in the event of default.

3. Check your eligibility

In Singapore, the maximum loan you are eligible for depends on your income. Find out how much you can get based on your income bracket.

4. Prepare the documents you need.

Prepare the documents you need before approaching any licensed money lender. This simplifies the process and makes it smooth. Here are some of the documents you will need.

• Proof of income

• Credit score report and CPF statements.

• Proof of residency

What Are The Signs Of A Reliable Licensed Moneylender?

With the rise of loan scams in Singapore, you need to be alert of the tricks these loan scammers use. Oftentimes, they can be very creative and before you know it, you’ve fallen into their trap.

Before you borrow from any money lender, be sure to check whether they are licensed. Once you confirm they are licensed, you need to establish who is the most reliable licensed money lender. Here is how to tell if the licensed money lender you are dealing with is reliable.

1. They have a good reputation

A reliable money lender will have a good reputation. Multiple references from family and friends is an indication that the lender can be trusted. Look out for a review on how the licensed lender offers their services.

For example, a reliable licensed moneylender will have positive customer reviews.

2. The licensed money lender explains all the terms and conditions

A good lender is not in a hurry to lend you the money. Instead, they seek to ensure you understand their terms and conditions. The lender will make sure you understand the repayment terms. Most borrowers are in a hurry to receive the money, and they forget to read the terms and conditions.

Remember that the Ministry of Law requires all licensed moneylenders to explain the loan contract to you in a language that you prefer. Each and every point should be clearly explained. If you notice that your lender is avoiding your questions, it is time to find another company.

3. The lender will state all the charges

Reliable money lenders want to ensure you are aware of all the charges. There should be no hidden fees. They will issue you with a quotation on the charges you can expect. Below are some of the charges you will expect to see in the statement.

• Amount borrowed

• The amount the borrower will receive

• All the fees and costs

• Interest per month.

• The total interest that will be incurred during the loan tenure

4. Apply for a loan through Singpass

A trustworthy lender will have a clear loan application process. In fact, a modern licensed moneylender will have the function where you can apply for a personal loan via Singpass. Having the Singpass system is also a sign of reliability as they are working with government bodies.

How Do I Tell If They Are A Loan Scam?

When taking out a loan, you need to ensure you are dealing with a licensed money lender. In this section, we look at how you can tell whether a lender is credible or not.

1. They don’t appear in the registry of money lenders

The first and most crucial step before you begin negotiating for a loan is to check whether the lender is listed in the registry of money lenders database. This database is provided every month and helps you avoid blacklisted money lenders.

Check the license of the lender you intend to work with and review it.

How do you verify the legal status of the licensed moneylender?

• Visit the official website of Singapore’s Ministry of Law. Click here.
• Click on the PDF. This file is updated monthly. Any lender that does not appear is illegal.
• Find the name of your lender.
• Lookout for the suspended moneylenders in the PDF as well. Make sure that you’re dealing with a legal and listed licensed moneylender like CreditMaster.

2. Unscrupulous advertisements

If the lender offers you the money through SMS, calls, or texts, they are probably a loan scam. Licensed lenders are allowed to advertise through

• Consumer or business directories

• A website belonging to licensed money lenders

• advertisements placed on the lenders’ exterior and interior premises

It’s advisable to seek clarification on the advertisement for licensed money lenders. Avoid relying on advertisements.

3. High fees and interest rates

Licensed money lenders are governed by the registry of money lenders. Any lender who charges anything above the base rate is mostly a loan scam.

• The monthly interest of 4%

• Each late repayment incurs a 4% late interest fee.

• $60 late fee

• A 10% administration fee on the principal loan granted

If the lender offers you a loan and charges higher rates than the above, then you need to cut communication.

4. They don’t have a physical address

The registry of money lenders provides the database of all licensed money lenders. Part of the information you will find is the physical address of the lender. If you notice a lender does not have a physical address, then you are likely dealing with an unlicensed lender.

5. They don’t carry out the physical verification

A licensed lender will not issue the loan before the physical verification is carried out. You need to go to the office of the lender for a face-to-face verification. If that does not happen, then you could be dealing with a loan scam.

6. Relevant documents are not issued.

Loan scams will not issue any documents after they give you the money. Unlike loan scams, licensed money lenders will return your NRIC and other documents.

A reliable and legal money lender will offer a complete loan contract to you. There are proper loan documentation to be done.

How To Borrow Safely From A Legal Money Lender?

If you plan to borrow money from a legal lender, make sure you do it safely. Do not rush and commit to a loan if you’re unsure. Here are some tips to follow.

1. Always work with a licensed money lender

Before you seek finances from a lender, make sure they appear on the registry of lenders’ list. Lenders on the list are governed and regulated by the Ministry of Law. The law sets out to seek to protect the borrower from greedy and unlicensed lenders.

It is not worth it to borrow from loan sharks.

2. Review your needs and identify the right loan

Determine your needs and apply for the right loan. You must calculate the monthly repayment and ensure you can afford it.

3. Read the contract and ensure you abide by it

Borrow what you can repay. Don’t overburden yourself with a loan you will not be able to pay back. Delinquency or late payments will ruin your credit rating.

4. Choose a reliable money lender.

Work with a money lender who can provide excellent and reliable loan services.

When it comes to taking out a loan from a licensed moneylender, it’s important to make sure that you’re dealing with a reliable and reputable company.

There are a few key things that you can look for when trying to determine if a moneylender is reliable or not.

Look out for positive customer reviews, clear and concise terms and conditions, and a responsive customer service team. If you keep these things in mind, you should be able to find a licensed moneylender that you can trust.