Normally, when a business wants to let the public know that they are offering a new product or service, they do this with the help of advertisements. Advertisements, or ads, would detail which business is offering what, what it does and how much it will be. Ads can also be seen almost anywhere, from television to social media.
Unfortunately, not all ads can be trusted because it is possible that the company which posted the ads may not be as truthful as they perceive to be.
Moneylending in Singapore is a very popular industry because many people flock to it if they need fast cash without the hassle of applying for personal loans from banks. Sadly, when there is a hot industry in the market, many questionable individuals would want to put their hands on it and take advantage of those who are not able to sense fake moneylenders. Advertisements are also very common, promoting monthly loans to those in need.
However, if you are looking for a moneylender and found one of these ads, do not immediately contact them because they may not be legitimate as you think.
Licensed Vs Unlicensed Moneylenders: Which One is Which?
The best way to tell if a moneylender is licensed or not is by checking the official list of approved moneylenders through the website of Singapore’s Ministry of Law. The Ministry has a special division – Registry of Moneylenders – which lists and monitors all licensed moneylenders in the country. If it is not on the list, they are not licensed.
However, if you want to discern if the moneylender is someone you can trust, you should avoid and report them if they do the following:
- If they start showing threatening behavior.
- If they become very rude and start abusing you through their language.
- If they suddenly give you a loan without you applying for it and they have not followed the standard procedure for loans.
- If they give you a loan without asking for your requirements.
- If they kept your personal documents, like your IDs.
- If they give you a loan without explaining the loan terms.
On the issue of Moneylending Advertisements
When you find yourself receiving advertisements promoting personal loans from moneylenders, you need to verify them first before you conduct business with them. While the ads look legitimate, they may not be trustworthy.
Since 2011, the Singaporean government released new advertising laws which clearly stressed that moneylenders can only advertise in these three areas:
- Online or print business or local directories
- On the moneylender’s official website
- Advertisements placed within and around the area of the moneylender’s office
If advertisements are found outside these areas, they are strictly prohibited and must be reported.
As a result, if a “moneylender” tries to approach you with a flyer or advertisement showing their personal loan programs, do not believe them because they are unlicensed or licensed moneylenders. You should also not respond to these moneylenders because they will just pressure you to take the loan.
When you receive these advertisements and fliers, immediately report them to the police and to the Registry so they can do appropriate action against these illegal moneylenders.
As a borrower, one should not base a moneylender’s trustworthiness with just the advertisement they see. Although an advertisement looks good, you should still do your research and learn more about the products being advertised.
How to Identify Fake Moneylenders?
Aside from the fact moneylenders are not allowed to advertise outside directories, their official websites and their office premises, and their sudden change in behavior, how else can you identify them?
Here are some of the things you need to look for:
Licensed moneylenders have all the right documents. They listen to you and provide you with a well structured repayment plan that is tailored to your needs.
- Application Process
When you apply with a fake moneylender, you will be facing quite a confusion because everything is done out of order. First and foremost, the documentation for the loan you are being offered is not very clear. Some fake moneylenders tend to skip the requirements and just give the loan without apparent reason.
Others will require extra paperwork, which may include any personal documents that are not usually collected by moneylenders.
The contract for the loan is also not very clear because it is not written by an attorney. It does not contain any details about the loan and it is not explained in any way.
- Interest rates and charges
When you end up with a fake moneylender, it is possible that the interest rates and additional charges would not be fixed like the loans offered by licensed moneylenders.
The interest rates, for instance, are not fixed to 4% per month. The same goes for the extra charges which are not included in the usual fees for late repayments and legal fees.
Usually, these fake moneylenders would change the rates without telling the client. As a result, the borrower will be facing quite a lot of debts aside from the actual balance they have to pay for that month.
For late payments, fake moneylenders would use force to ensure that the borrower pays their loans. The level of force they would use varies, and it can be pretty scary for some borrowers.
Furthermore, they will levy quite a lot of extra charges which should not be charged with late payments.
If you find yourself in need of money, do not immediately respond to the advertisements you see online or around you because they may not be the solution you are looking for.
Before you borrow, research and learn everything about the moneylender you wish to make business with and the loan you plan to take. Everything is now online, so there is no reason for you to ignore your research.
Doing your research will help you protect yourself and your money from questionable individuals and companies after your cash. So, always double check before signing anything so you do not have to worry throughout your loan tenure!