Moneylenders - LoanSingapore

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Licensed Moneylenders

• A Short Guide to Safely Borrowing Money

From LoanSingapore.SG
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Everyone needs to get a loan sometimes

• Everyone needs to get a loan sometimes. Although
  people can ask some friends or family to get
  money from them, they prefer moneylenders often.
  The main reason is that moneylenders are fast and
  the amount is in your account immediately. Banks
  are another option but their loans have different
  conditions. Choosing to get a loan from a
  moneylender has benefits and risks, too. Although
  in Singapore the government has defined strong
  regulations for this type business, there are
  still some inappropriate practices.

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Loan Sharks vs Licensed Moneylenders

• However, one licensed moneylender can save your
  life when you need money most. Loan sharks know
  that and try to trick people who don't have a lot
  of options. That is why it is illegal to get a
  loan from a loan shark. You will find out that
  interest rate that loan shark will offer you will
  be really different from the one licensed
  moneylender will offer you. Have in mind that it
  will be best if you visit at least three licensed
  moneylenders before choosing the most suitable
  one. Although the government in Singapore limits
  the amount of interest rate, there still are some
  differences in various moneylenders.
• Have in mind that you should fulfill every clause
  in the contract or there will be consequences. No
  one will ever give you money like a gift so don't
  think that you should not pay your installments.

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A Licensed moneylender has to explain to you
every clause.

• Licensed moneylenders in Singapore are forced by
  the law to explain in depth every clause of the
  contract. As you may know, in Singapore there are
  4 official languages so the government obligates
  moneylenders to explain their terms in language
  that client knows. This may sound like a silly
  rule but it is not. There are people who can't
  understand fully the English language, and they
  are not capable of understanding the contract
  they sign. So if the moneylender doesn't want or
  don't know how to explain the terms of the
  contract probably he is loan shark instead of the
  licensed moneylender.

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Licensed moneylenders will want to know how big
your income is.

• They will give you a loan based on your income.
  Unsecured loans are given to people who have
  regular salary payments. The size of the loan
  depends on the size of the annual income because
  moneylenders want to be sure that the client will
  be capable of paying back the loan. A lot of
  people think that moneylenders are just throwing
  away money with enormous interest rates but this
  is simply not true. No one has the interest to
  give someone money which can't get back later
  he will go bankrupt eventually. However, the
  maximum loan you can get if your income is less
  than 20, 000, will be 3,000. This is not much
  but it is enough to meet ends of the month if you
  have some unexpected expenses.

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Every loan has to have a contract

• It is not possible a licensed moneylender to give
  you a loan without a contract. The official
  contract should include information about the
  amount of the loan, the interest rate, and
  payments. If the contract is not including all
  these things you should be really careful and
  check whether your moneylender is not a shark
  loan.

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What will be the interest rate?

• As we mentioned, the government has defined
  strong regulations for loans and their taxes and
  interest rates. From 2015 moneylenders can't give
  offer you a contract with an interest rate higher
  than 4 per month because it is illegal. So if
  you find out that your interest rate is higher
  (and your contract is signed after 2015) probably
  you have a business relationship with a shark
  loan.

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What about the fees?

• Moneylenders in Singapore can't define fees that
  summed with the interest rate, late interest
  rate, and other fees can't be bigger than the
  principal of the loan. As you may see, the
  government has defined this rule in order to
  defend people who don't read their contracts
  carefully.

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What means to be a licensed moneylender?

• Licensed moneylenders have licenses that prove
  their ability to develop this kind of business.
  You may be surprised but moneylending is a
  business. Everyone who registers a legal business
  name and company with this kind of occupation can
  receive a license. The difference is that there
  is a monthly fee to use such a license. In
  addition, there is a fee for submitting your
  documents at first place. Singapore Ministry of
  Law saves all names and companies that are
  registered and have received a license. In order
  to have some selection people who have applied
  for a license should fill some basic tests. Tests
  include math and language experience.
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