There are times when you need fast cash to help meet an emergency. However, your personal loan requirements do not fulfill the qualification criteria by banks and other lending institutions. In such a situation, licensed moneylenders may be your best options to help raise the funds.
For a first time borrower, the knowledge you have of a private lender may probably be limited.
Since there are so many Ah Longs in the market, borrowers need to be able to confirm that they are dealing with legal money lending company.
Confirm Legal Status Of Moneylenders
In Singapore, licensed moneylenders (LML) should be documented with the Law Ministry. The lender’s name should appear on this list maintained by the MinLaw together with the business address and license number.
You can verify the lenders legal status in 3 easy steps:
- Visit the Singaporean Law Ministry official website. Click on this link – Licensed Moneylenders list in Singapore.
- Open or download the PDF it in a new browser window. Check through the entire list to locate the name of the prospective moneylender institution to verify their authenticity.
- This PDF also offers a list of lending companies whose licenses are currently suspended. Confirm the list to ensure that you are not transacting with a Licensed lender who does not hold the license to provide unsecured cash loans products.
How To Tell You Are Dealing With a Loan Shark
Indications that you are dealing with an illegal lending company:
- Behaves in a threatening manner and uses abusive language on you
- Will contact you via SMS, emails or WhatsApp ads, flyers and ads in magazines
- Holds onto to your NRIC card and other ID documents even after the verification is completed
- Will asks for your SingPass password and user ID
- Will pressurize you to sign a blank or an incomplete Note of Contract in exchange for the cash loan
- Will approve your personal loan over SMS, on phone call, or email without getting a loan application and the supporting documents
- Offers personal loans before explaining conditions and terms and refuses to offer a copy of the loan contract
When your moneylender does any of the above acts, immediately stop transacting with them. Even better; before making any new loan negotiations, verify whether they are legal or not.
Reasons to Borrow From Licensed Lenders
Due to the fact that legal moneylenders primarily provide small personal loans. Then their decision-making time and also the loan authorization process is tremendously fast-tracked. Additionally, moneylenders hardly have bureaucratic management level personnel who will deliberate extensively on the approval of your loan application.
When transacting with the legal moneylender, those borrowers who have all the necessary documents ready will get their personal loans authorized for a period of 30 minutes. This ensures that you get the amount you need for your pressing financial obligation.
More Tolerance For Poor Credit Scores
Most Singaporeans understand that credit scores are important while they are applying for a personal loan. But, with the licensed money lenders, they are a lot more lenient when it comes to the borrower’s credit score.
This is because the loan amount lenders offer in loan services is quite smaller compared to what banking institutions offer. Former bankrupts could even get some access to loan facilities offered by licensed moneylenders this is given that they present a letter of discharge.
Suitable For Smaller Amounts
For most Singaporeans, licensed moneylenders are a much-needed help hand for people seeking smaller loans. These loans can be utilized for minor things like settling medical bills, car repairs, etc. Licensed moneylenders in Singapore, offer these risk-averse types of loans to reduce the negative impact of any outstanding debts.
According to the law, the regulations for the lending cap set for the licensed money lenders are not above 2-4 times the income amount a borrower receives each month.
Although a big number of licensed moneylenders in Singapore will take a firm stand on discussing the interest only after you have met with them personally. This does not indicate that they are doing this in an effort to make crooked illegal deals.
It is simply because they do this on their part as some kind of a smart business plan. This strategy serves to helps them to reach Singaporeans who urgently are in need of small loans and it will not take much time.
Also, it is advisable that borrowers take the time and do some research as it will help them locate the best and suitable interest rates offered.
Always Choose Licensed Moneylenders
Before taking out a personal loan it is advisable that borrowers carry out some thorough research. In doing this, you will locate the right moneylender who will give you a loan package that fits your financial needs. It will also help you find a reliable moneylender.
Ensure that you deal only with licensed and legal moneylenders who are ready to accept your conditions. Also, do not sign any loan agreements before you are content with the conditions of the loan offered. Of importance, ensure to thoroughly read through the loan requirements prior to accepting it.
Always check the validity of the lender’s license. In doing this you will verify if they are operating legally. Their license should have been issued by the Moneylender’s Registry.
As you are carrying out your research, ensure that you make choices based on your findings of the research. It is so as the process will assist you in locating the right legal and licensed moneylender. Your lender needs to easily fulfill the above-named guidelines.
Even then, the regulatory authorities control the interest rates placed on loans by the licensed lenders. This ensures that lenders and borrowers are protected. Owing to this ensure you do thorough background checks on the chosen moneylender before transacting with them. This will ensure that any personal loan you obtain will not attract inflated interests.
Doing the research will help you easily find the suitable lender who is willing to provide you with suitable packages.