Unforeseen circumstances may knock at your door at any time and you will find yourself in a financial rut.
In such a case, you will need cash urgently to sort out the emergency. But where do you get an affordable loan fast?
When you are looking for a quick loan, a licensed money lender is your best option.
Licensed money lenders are quick and convenient, offering you the money you need in hours. Plus, their requirements are less stringent, which makes them ideal for emergencies.
Whether you need to borrow $1,000 or $30,000, licensed money lenders can help you. In this article, we delve into what licensed money lending is and how much you can borrow in Singapore.
What Is A Licensed Money Lender?
A licensed money lender is a financial institution that is licensed by the government to provide loans to individuals and businesses.
Licensed money lenders are registered companies that offer credit facilities. They are private lenders that cater to borrowers who need fast and quick cash.
They must follow rules and regulations set by the government to operate. How much you can borrow from a licensed money lender depends on many factors, including your income, credit history, and the purpose of the loan.
Typically, you can borrow up to $100,000 from a licensed money lender.
Licensed money lenders follow the set regulations when lending. They are limited in the amount they can lend, the fees they can charge, and the interest they can charge. You can find a list of licensed money lenders on the Ministry of Law’s website.
Each month, the ministry updates the details of licensed money lenders. This ensures that only the legal lenders are in the list. You will also find the following information:
- License number
- Business address
- Business contact information
- Key contact person
Is It Safe To Borrow From Licensed Money Lenders?
Yes, it is safe to borrow from licensed money lenders.
Licensed money lenders are not the same as loan sharks.
Many of us would have heard of illegal lenders or Ah Longs. Those are terrifying organisations and you should never be in contact with them as they have no scruples about harassing you in all sorts of ways until you pay up.
Legal money lenders are governed by the Moneylenders Act. The Act stipulates the interest rate, and the amount of money licensed money lenders can lend, and regulates advertisements put out by licensed money lenders.
Through the act, licensed money lenders are prohibited from:
- Using abusive and threatening language
- Refusing to give back your documents
- Asking for your NRIC
- Granting loans without explaining the terms and conditions clearly
- Approving loans without due diligence or verification. Licensed money lenders are required to issue loans after verifying the identity of the borrower in person.
- Withholding any part of the principal amount
How Much Can I Borrow For A Personal Loan?
Most banks and financial institutions will lend to those earning above $20,000 a year. Also, they will only choose to lend to borrowers with a good credit score.
If you earn less than $20,000 a year or if you have a bad credit score, you may have to look for an alternative option.
The good news is that money lenders such as CreditMaster are on hand to help borrowers like you. Regardless of your credit score or your loan history, CreditMaster will examine your application thoroughly and try to assist you.
It’s important to note that the amount that the licensed lender disburses depends on how much they trust you.
Here’s how much you can borrow for unsecured loans:
|Borrower annual income||Singapore citizens and permanent residents||Foreigners residing in Singapore|
|Less than $10,000||$3,000||$500|
|Income of between $10,000 to $20,000||$3,000||$3,000|
|At least $20,000||2x to 6x the monthly income||6x the monthly income|
You will be charged an interest rate of up to 4% for both unsecured and secured loans. In the event the borrower fails to repay the money in good time, they will be charged a late payment interest of 4%.
Most licensed money lenders will offer you an interest rate that is lower and easier to manage.
Licensed money lenders can provide you with an alternative source of cash for emergencies and other smaller needs.
They can also lend a hand with home renovation costs or education fees.
What Should I Consider Before Taking Money From A Licensed Money Lender?
When you need to sort out an emergency urgently, your best option is a licensed money lender.
A licensed money lender will offer you cash quickly with flexible repayment terms. If all things go well, you might be able to get your cash within 30 minutes.
Before you take money from a licensed lender, consider the following:
1. Make sure you know the interest rates and the fees you will be charged.
Licensed money lenders are required to disclose interest rates, payment terms, administration costs, late payment fees, and any other costs that you may incur during the loan tenure.
The lender needs to ensure you understand all the terms and conditions. This includes explaining the loan terms in a language that you can understand.
If your lender refuses to explain any information on the loan contract, reject them and report them to the Ministry of Law.
2. Review your finances and determine whether you will be able to pay the loan on time.
Failing to pay your repayments on time will result in penalties and a drop in your credit rating. It is better not to bite off more than you can chew.
3. Shop around to see what other lenders are offering.
Before you sign on the dotted line, research what the lenders are offering. Choose the licensed money lender with the best interest rate, and favourable terms and conditions.
4. Understand your legal duties when you sign for a loan.
Do note that taking a loan involves signing a loan contract. After you sign this document, you are legally required to repay the loan you take. Failure to do so can result in a jail term or fine.
What Are The Fees Licensed Money Lenders Charge?
According to the Moneylenders Act, they are allowed to levy the following fees:
- A late fee of no more than $60
- A fee of no more than 10% of the granted principal
- Legal costs that are ordered by the court after a successful claim
The total charges levied by the money lender should not exceed the principal amount granted to the borrower.
7 Uses Of A Personal Loan
Taking a personal loan can be a great way to get past a financial crisis or even boost your business’s cashflow.
The plus point of a personal loan with a licensed money lender lies in the flexibility and speed of loan approval.
That said, before taking up a personal loan, make sure you compare the offers from various lenders. Here are some ways to utilise a personal loan.
1. Consolidating Your Debts
If you have multiple debts with high interest, you may want to opt for debt consolidation.
It involves picking a low-interest loan and repaying all the high-interest ones. This will leave you with one final loan, which has a lower interest rate and is easier to manage.
The good thing about debt consolidation is that you get to choose a better loan with a flexible repayment period.
With only one loan repayment per month, the risk of forgetting the repayment dates is far lower. This is an important point as missing a loan repayment may incur hefty late fees and charges.
2. Funding Your Wedding
Getting married can be an expensive affair, especially in Singapore.
On average, you can spend up to $50,000 on food, a wedding dress, a honeymoon, and other wedding day expenses. It’s a once-in-a-lifetime occasion and you want to do and look your best.
One way of financing your wedding is by taking out a personal loan. A personal loan with evenly distributed repayments gives you the cashflow you need to make your wedding day unforgettable.
You can make use of the red packets that you receive for your personal loan repayment.
Come up with a wedding budget and get a personal loan for what you need. Don’t overborrow. Make sure you stick within the budget.
3. Home Improvement/Home Renovation Costs
Home renovations can range from $40,000 upwards, depending on the size of your home.
In Singapore, couples and families will purchase a BTO, a resale HDB flat or a private property.
Regardless of your choice, you will need to renovate the house and make it a home.
Unfortunately, after buying a new home, many couples in Singapore don’t have the money to spare cash for home renovation costs.
A personal loan is a great option to help you transform your abode into your dream home.
Another benefit of getting a renovation loan from a licensed money lender is that you can borrow a larger loan amount.
Renovation loans offered by banks only allow you to borrow up to $30,000. If you need more funds for your renovation, click here to see how CreditMaster can help.
4. Making Expensive Purchases
Examples include buying a new air conditioner, a smart TV, a new washing machine or any appliance that your home needs.
A personal loan is definitely a good option for large purchases. Rather than draining your savings for the purchase, consider taking a personal loan with fixed monthly payments.
While buying the items, look out for discounts and bargains to get the best deals on the items.
5. Covering Medical Costs
Health issues may occur suddenly. Even if you or your loved ones seem healthy, unexpected medical issues may crop up.
If your medical insurance is not sufficient, you will need to raise more money to pay for the hospital bills.
Taking a personal loan will help you focus on your own health or that of your loved one instead of worrying about finances.
Whether you are looking for money for dental surgery or any other specialised treatment, a personal loan will come in handy.
Most legal money lenders disburse personal loans quickly after application.
6. Renewing A Certificate Of Entitlement
It is time to renew a COE but you are facing financial constraints. With the prices of Certificate of Entitlement (COE) continually rising, you may need a helping hand.
If you need the money fast, the best option is a personal loan.
With the right personal loan, you get to pay for COE in manageable installments. If you are renewing the COE for five years, take a loan for the same tenure or less.
7. Taking A Vacation
Are you yearning to take a holiday in popular destinations like Melbourne, London, Barcelona, and Rome? Now that the travel restrictions are relaxed, it is finally time to travel out of Singapore.
However, travelling is expensive. Rather than drain your savings account, why not take a personal loan?
Take a personal loan and travel to your dream destination. Ski in Switzerland, watch the Northern Lights or eat loads of good food in South Korea.
After taking the loan, all you have to do is plan how to make the repayment. Make sure you don’t take a long tenure to pay off the loan.
Finding The Right Licensed Money Lender In Singapore
Licensed money lenders are a great option if you need to borrow money quickly and are not able to go through a bank.
With competitive rates and flexible repayment terms, licensed money lenders can help you get through tough financial situations.
It is also important to ensure that you take a personal loan you can manage to pay back. Remember that any default on a loan will hurt your credit score and make it more difficult to get any financing in the future.
Before taking out any personal loans, do your homework. Compare the interest, repayment terms, and any other costs involved.
CreditMaster is one of the best licensed money lenders in Singapore. If you urgently need fast cash today, apply for one of our loan products today.