Moneylenders in Singapore have helped thousands in the past years. They provided hope for families and individuals who needed financial assistance. The government allowed them to operate by offering loans that truly benefit people in need. With this, the moneylending industry in the country thrived. Despite this, there is a rise of illegal moneylenders in Singapore who takes advantage of the desperate conditions of the borrowers. This article guides borrowers in choosing where to take loans. It also helps them identify the best among the licensed money lenders in Singapore. After reading this, you will easily spot which money lenders to trust.
List of Licensed Money Lenders in Singapore
Singapore government, through the Ministry of Law (MinLaw), has strict guidelines when it comes to money lending. The government understands that people who apply for loans are vulnerable. As a result, they built a registry of moneylenders which is a list of all Singapore money lender businesses that are allowed to operate. All the businesses under this list must abide by the strict rules and protocols set by the Ministry of Law.
Do remember that the government aims to protect both the money lending businesses and the borrowers. A licensed moneylender must only charge a reasonable interest rate, loan fees, and late repayment fees based on the rules and guidelines set by the MinLaw. On the other hand, the government protects licensed moneylenders through imposing certain legal punishments for people who run away from their payment responsibilities.
You can find the list of all licensed money lenders in Singapore here. These are the only lending companies that you need to trust. It was last updated in July 2020. If you want an updated list, you can also visit the website of the Ministry of Law to ensure that the company you selected is legitimate.
How to Spot Illegal or Unlawful Money Lender in Singapore
Aside from consulting the list of licensed moneylenders from the Minlaw, there are also several ways on how to spot illegal or unlawful money lender businesses. Try to observe whether the money lending company you are applying to has these red flags. Here are five things you can focus on when dealing with a money lender.
1. If You Are Receiving Multiple Unsolicited Offers
A licensed money lender in Singapore is only legally allowed to use three channels to reach its potential customers. These are in (a) business directors found in print or online media, (b) the website owned by the lender, (c) posters, billboards and other ads placed in or outside the premise of the licensed money lender. If you receive a loan offer through email, flyer, SMS or text message, or other forms not allowed by the government, the loan company is probably illegal.
This means that you should not respond to random loan offers that come in your way. Instead, search for legitimate lenders in government websites and loan-expert sites. Also, it is best that you consult multiple sources until you find the best lender that fits your needs. Only respond to legitimate loan offers because you also have to protect your personal and financial details.
2. If Your Loan Offer Is Incomplete
According to the Moneylenders Act, all lenders should provide the complete terms of a loan. This includes the final cost of the principal loan as well as the interest rates of the loan. All of these details must be well explained and identifies in the legal contract between the borrower and the lending company.
You must also pay attention to the interest rates set by a loans company. Since October 1, 2015, the government has mandated every licensed moneylender to charge the maximum interest rate of 4%. The loan interest rates in Singapore is governed by the MinLaw, which means that any violation of this must be reported to the authorities.
An incomplete loan offer can be used to abuse the borrower. Lenders can tamper the contract and indicate higher charges, interest rates, or loan fees. They might also add hidden fees which are not indicated in the contract. Hence, borrowers must be extra vigilant in ensuring that the contract they are signing is clear and agreeable to them.
Also, the contract explaining the details of the loan should be clear. If you, the borrower, cannot understand what is stated in the contract, you should not sign it. Do not be fooled by the words of the loan company’s representative. You still have to read the fine print of the contract.
3. If the Loan Company Do Not Have a Physical Address or Contact Details
Legal and established Pte Ltd loan businesses all have offices. It is where they conduct their businesses. Hence, if you are applying a personal loan to a business entity without an address, there is a high chance that it is illegal.
Moreover, a loan company must also have contact details which include an official email address and a telephone number. In most cases, these companies even have customer service offices to assist loan applicants. If you are transacting to a business without these details and services, you might need to confirm their legitimacy to the authorities.
Without having the physical address or contact details, it would be next to impossible for you to contact Pte Ltd offering you a loan. Also, you can’t file a complaint against them because they will not be found. Thus, for your own protection as a loan applicant, it is best that you only deal with lenders with an actual address and contact information.
4. If the Loan Company Requires You Up-Front Fees and Has “High Processing Fees”
The moneylender must only charge the loan fee when the loan is granted or given. Also, this fee should not exceed 10% of the principal loan amount. There is no such thing as “high processing fees” because the government only allowed licensed moneylender businesses in Singapore to charge minimal fees.
You must remember that Pte Ltd loan companies are only allowed to charge three kinds of fees. First is a late repayment fee which should not exceed $60 per month. Second is the application fee which should not exceed 10% of the principal of the loan. As stated above, this must only be charged after the loan is granted. The third is the legal cost ordered by the court. This was when the borrower failed to pay back the money to the money lender. Ensure to check out interest rates Singapore moneylenders can charge for more information.
Another sign of a bogus or scam loan company is that if it is asking you to pay through a gift card. Loans must be paid only through formal channels. Illegal businesses would want you to pay through a gift card because these cards are untraceable. They are preferred by businesses with criminal intentions.
5. If the Loan Application Website Is Not Secure
A loan application requires you to share private and personal information. This means that you should only transact using secured lines. In the case of your application for a personal loan or other loans, you must only use a secured website. One way to do check is to see the padlock icon on the left beside the URL of the website you are visiting.
Do not attach documents containing personal information on private emails or other channels outside the official website of the company. Make sure that you are protecting your personal and private data even during your loan application. If a loan company forces you to do this during the loan application process, you must investigate whether such company is legitimate or not.
Moreover, the agents or customer service representatives dealing with you about your loan application must use formal modes of communication. They must use official company lines such as phones and emails instead of their own cellphones. Using these formal lines of communication ensures you as an applicant that the data you are sharing to them is protected and kept private. Want to know more about unlawful money lender? Check out illegal money lender and loan sharks scams.
How to Report Unlawful Money Lenders
If you think that a moneylender in Singapore is working without a license, you must contact the Ministry of Law immediately. They will conduct their investigation and will do the necessary action on your complaint. You should trust your instinct when dealing with moneylenders. If you are uncomfortable with the transaction, you can always choose to find an alternative moneylender.
Meanwhile, if a lender in Singapore is threatening or harassing you because of loan payments and other loan-related concerns, you must call the police immediately. Money lending Singapore-style is never about harassing clients. It is about providing help to people who are financially in need.
Also, no lending company can ever force you to avail their product. You should never feel the need to avail of the services of any moneylending company or corporation. If you think that the loan contract is not favourable to you, you must be allowed not to enter into the contract or agreement. You can report any person or entity forcing you to avail of their loan service offers to the government of Singapore.
Which Is the Best Licensed Money Lender in Singapore
Finding the best money lender where you can apply for a personal loan or other types of loans can be difficult and tiring. There are a lot of authorised moneylenders in the country. One way to help you out is to refer to loan comparison sites that provide objective feedback on which lending companies are the best. You can begin your research here where the website Loan Advisor wrote a summary of the top licensed money lenders of August 2020.
Remember that not all authorised moneylenders are the same. Each of these lending companies has its own identity and personality. This means that you have to look for the moneylender who can provide your loan-related needs. Before filing your loan application research on the background of the lender, you have chosen. You will build years of relationship with them, which means that you have to be certain in choosing your loan company.
You might also want to try applying for loans to Fortune Credit Pte Ltd. We provide an outstanding customer service that is willing to accommodate anyone with questions and concerns related to loans and borrowing. Fortune Credit has a Google review of 4.9 stars out of 5. It also has 90 5-star reviews on Loan Advisor.
Fortune Credit is a credible and award-winning licenced moneylending company. It has helped thousands of customers. If you wish to know more about our loan offerings, you can reach us through various platforms listed here.