You can’t help it: you needed money during the time and no bank was willing to work with your low credit score. You can’t explain that you took out bank credit to pay for your rent in six months, but this lender asked you to consider their offer.
The paperwork wasn’t difficult — it only took less than an hour and you got your cash. Now, they’re telling you to pay up your debt or suffer the consequences.
Loan sharks in Singapore are a huge problem. They target people in similar situations, and these parties fail to consider checking their financier’s legitimacy. In fact, they even hand delicate information such as IC numbers, SingPass accounts, details of family members, and more.
What to Do if you Mistakenly Deal with a Loan Shark
Here are the actions you should take if you’ve mistaken a loan shark as a legitimate moneylender.
To Which Authority Can I Report My Incident?
All loan shark incidences are legitimate harassment cases especially when they start slandering you, your family, or your friends when you fail to make repayments for your loans to them plus interest.
You can report your incident to the police. According to the SG Police website, you can report your lender through the i-Witness dedicated reporting page.
While it’s possible a police report will issue a blotter against your lender, it’s impossible to stop them from harassing you.
There have been incidents where loan sharks have vandalised establishments indebted to them. However, a harassment case will not guarantee physical police protection especially if there is no criminal intent in the act.
Therefore, you can make a report, the police can blotter your lenders, but there’s no guarantee the harassment will stop.
What Can Happen When I Borrow From Loan Sharks?
Loan sharks have existed every since people and groups needed money to create business or pay their existing debts. Unfortunately, they do not operate within the regulations of Singapore’s Ministry of Law. In turn, they can increase interest rates to the highest levels they wish monthly and reject the amounts you regularly pay to allow them to gain higher interest rates and more money from you.
Here are two things that also happen when you borrow money from loan sharks:
It’s not only you who suffers from the disastrous consequences of working with loan sharks. Most will ask for your co-payer or guarantor’s names.
They will tell you it’s a form of security that guarantees loan application success. However, it’s their way to harass you if you fail to pay your regular loan repayments within the set period.
Their methods of harassment include sending unsolicited messages to your families and friends threatening to slander their name for having huge loan amounts. In addition, they may blackmail them through different means. In one incident, a loan shark threatened to spread the financial credentials of a guarantor if the debtor fails to pay.
High and Impossible Interest Rates
According to Singapore’s legal terms on moneylending, all moneylenders have to comply with an interest rate cap of 4%. However, loan sharks can introduce higher than this value during the first month.
To attract individuals in dire need of financing, they will introduce a very low interest fee during the first few months of a payday loan or business loan. Then, the fee immediately uphills into exorbitant interest rates that are impossible to pay.
While you won’t need financial institutions to forgive your loan shark loans, they will keep harassing you until you pay them back — and that is if they will decide to stop at all even if you do.
How Can I Avoid Working With Loan Sharks?
The best way to avoid loan sharks is to avoid any acknowledgement of their unsolicited text messages, emails, and social network chat messages offering great borrowing amounts at low interest rates. You can immediately block the numbers and report them as spam.
However, some seemingly-legitimate websites can catch you off-guard as an excellent moneylender. To tear down the sheep’s clothing off these predators, here are a few things you should always remember before deciding to borrow from moneylenders.
Unlicensed by the Ministry of Law
The Ministry oversees all legitimate moneylenders and issues them licenses. They need to present these license numbers on their website and other communications with their prospective clients.
Yearly, each licensed moneylender has to submit information that ensures they’re within the interest caps and treating their borrower’s information in full confidentiality.
Loans That Go Beyond The Interest Rate Cap
Borrowed finances can easily inflate into high debt because of huge loan shark interest rates. However, the Ministry’s cap on these amounts, customers remain relatively safe.
However, if your debt repayments are taking over 40% of your income, you’ll need to have debt consolidation to make sure you can still repay and manage your debts accordingly and can lead to debt free. Legitimate moneylenders offer debt consolidation services to customers too.
Doesn’t Explain Financing Terms and Conditions
Even if they’re legitimate, all private money lender Singapore must explain the terms and conditions of their financing services to customers clearly.
They must provided a soft and hard copy to the customer and have customers sign an agreement form that ensures they’ve understood the terms before they signed up for the financing. If they forget to explain this, you can send a complaint to the Ministry of Law or decline your application.
Keeps Your Bank Account Card Access Hostage
Loan sharks will always ask for your personal information. Often, this includes your password information for bank accounts and even SingPass. Their reasoning will be: you have no form of collateral and equity security to drive down your interest rates.
Therefore, to offer you the rates they advertise, they will claim they need your personal information as a form of guarantee. Never give this to anyone — not even legitimate lenders who may ask you for this.
Only Work With Secure Moneylenders in Singapore to Avoid Huge Headaches
If you’d like to find a legitimate lender within the Ministry of Law in Singapore’s regulation and offers the best rates, choose Fortune Credit. Click here to know more about what we can do for you today!