Loans have become a key part of life of most Singaporeans. Moneylending companies like Fortune Credit Pte Ltd, can be very helpful in times of financial need.
However, you should also be careful and knowledgeable on the ins and outs of taking a loan in order to avoid more trouble. A loan should give you a way out of a financial problem and not drive you into one.
Below is a list of questions regarding money lending, legitimate companies, loan applications, interest rates, and requirements.
What Is Money Lending?
Money lending is a transaction between borrowers and moneylenders where the former loans money from the latter.
The transaction benefits not only one but both of them. While the borrower gets to have the amount of money he needs to ease financial burden, the money lender profits from the interest rate.
The money lender may even be entitled to additional profit in the form of late interest should the borrower defaults in repayment.
There are various money lending entities. Those that belong to traditional lending institutions are banks and other financial intermediaries. Their loan application process usually takes time.
Clients need, to a certain extent, prove their repaying capacity by establishing good credit standing, employment, and income to name a few. They may even be required to have surety, guarantee or mortgage to serve as security of the creditor.
Another lending entity, which is considered by most as a good alternative to banks, are licensed moneylenders. Be careful not to confuse them with unlicensed moneylenders or more commonly known as loan sharks.
Licensed moneylenders in Singapore are under the authority and thus, bound by the rules and regulations of the Ministry of Law. Hence, their operations from application process to collection efforts as well as the terms and conditions of the loan contract should be within the law.
How Do Moneylenders Work?
Licensed moneylenders like Fortune Credit Pte Ltd among others operate just like any other moneylending entities. They let clients borrow a principal loan amount with the expectation of getting paid in return with the stipulated interest rates and other charges.
All companies and Pte Ltd’s comply with standards of operations set by the Ministry of Law. Therefore, clients have extra assurance that moneylenders will not take advantage of their ignorance of the law.
Take, for example, there is an interest cap and any charge more than that would be illegal. So make sure to get your loans only from licensed moneylenders in Singapore.
In Singapore, an unsecured personal loan is a very good alternative to bank loans. When a person needs a relatively large amount of money but does not have qualifications required by banks to have his loan application approved, getting a personal loan is the best alternative.
Moneylenders, unlike banks, even allow those with low credit score are allow to borrow.
Although it is not advisable to resort to using a long-term financing scheme in answering for short-term financial burdens, personal loans are still a better option than credit card debt.
These loans are not as accessible as your credit card, so you cannot spend the money from it impulsively. You will be more careful. Also, this type of loan is fitted to your needs and ability by your licensed money lender. The interest is also more reasonable in personal loans.
The first among the list is during times of sudden financial emergency like an expensive medical treatment that you do not have the money to pay for. It can also be a home renovation or improvement that requires immediate attention and funding.
Maybe you need a loan to finance a relative’s education or international conference. For whatever reason, if you find yourself suddenly in need of money, a personal loan is a reasonable go-to solution which licensed money lenders in Singapore can offer you with.
Personal loans have since been specialized according to emerging needs of clients. It was not to be used and given capriciously.
Factors to Consider Prior to Borrowing
First, make sure that you borrow from a licensed money lender that is recognized by the Registry of Moneylenders and that is among the list of licensed money lenders in Singapore.
When you do this, you do yourself a favor because there is nothing left for you to do but to try your best in repaying your loan.
When you borrow from a loan shark, you will surely have the trouble of dealing with their illegal operations that might include harassment, violence, threat, or intimidation.
Loan sharks may even charge you usurious interest rates and other fees you did not originally agree upon. Since they are illegal and illegitimate, you will also have trouble getting protection from law enforcers.
Second, consider the loan amount. Do not loan an amount that is clearly beyond your capacity to pay. While loan sharks may allow you to loan unreasonably high amounts of money, a licensed money lender in Singapore cannot do that.
Your annual income will determine the maximum loan amount you can be entitled to. Aside from that, your citizenship whether you are a Singaporean or a foreigner will also matter.
For example: If your income is less than S$10,000, you can loan up to S$3,000 if a citizen of Singapore and a resident but if you are a foreigner and resident, your maximum loan would be S$1,5000.
If your annual income is between S$10,000 to less than S$20,000, you are entitled to a maximum of S$3,000 regardless of nationality.
If your annual income is at least S$20,000, you can have up to 6 times your monthly income whether you are a citizen of Singapore or a foreigner.
Please note to ever loan an amount that is clearly beyond what you can pay for as this might just create a bigger problem in the future.
Moreover, applying for a loan that is too high for your income almost guarantees disapproval.
A lot of legitimate moneylenders like Fortune Credit Pte Ltd will not approve a loan if they assess that you will not be able to fulfill your obligations.
Third, consider the interest. Know that the Ministry of Law sets an interest rate cap of 4% per month. Any rate that is higher than that is a violation of the law. Back out and report it immediately to the authority.
When you borrow money from licensed money lenders Singapore, the nominal interest cap is 4% every month.
When you default on your payment, you may be charged another interest which is called late interest rate. For every month of late payment, there will be an additional 4% interest to be charged.
Nominal interest rate is computed on the monthly outstanding balance of the remaining principal amount after deducting payments that have been made.
For example, if the principal loan is S$20,000 and you paid S$10,000, the remaining principal of S$10,000 will be the basis for charging the nominal interest rate of 4%.
Late interest is computed on the overdue amount. For example, if you are paying $10,000 per month on an installment basis and you failed to pay the same, then the 4% additional late interest will be applied to that unpaid $10,000.
Repayment Plan or Tenure
And fourth, it is important to consider the repayment plan or loan tenure. You have the obligation to repay the loan on the stipulated date. It would be negligent of you to still sign the contract when upon its face, you can already determine that the repayment schedule would be difficult, if not impossible, for you to fulfill.
Another reason why you should take the repayment plan seriously is that you may be charged another interest rates in the form of nominal and late interests.
Complete List of Licensed Moneylender in Singapore
Singapore money lending industry only recognizes those that are registered with the Registry of Moneylenders.
They should be differentiated from unlicensed money lenders or loan sharks. Take note of the following differences so that you will not fall victims to loan sharks.
Most companies in Singapore, moneylending companies included, are categorized as Pte Ltd. Before striking a deal with a firm, make sure they are in the roster of Singapore’s Pte Ltd’s.
First, when it comes to advertisements, loan sharks use platforms that are not allowed by the Ministry of Law. Take, for example, loan sharks try to directly connect with clients via flyers, SMS, e-mail, or other forms of advertisement.
They send random and unsolicited messages regarding their loan products. What is more bothersome is that they are able to contact clients at their most desperate conditions.
Loan sharks have a way of getting the contact details of those whose loan applications got rejected by banks.
There are only three channels that licensed moneylenders can utilize to promote themselves: (a) their official websites, (b) their official place of business, and (c) business or consumer directories.
Second, with regard to contracts, loan sharks usually do not require it. But when they do, the terms and conditions of the contract are usually vague. They intend to mislead you into believing that you can trust them and that they are your best option during financial difficulties.
Loan sharks will not bother assessing your paying capacity. They have no interest in knowing how you earn income. The only thing that matters is you getting a loan and paying it after. They will coerce you into paying them.
In contrast, a licensed money lender will still require you to undergo some formal loan application processes that involve assessments.
Third, loan sharks offer very attractive deals. They deceive you into borrowing large sums of money only to harass you when comes to the repayment schedule. Sometimes, they opt to collect payment earlier than what was stipulated.
So whenever you are presented with good-to-be-true loan deals, have a second thought on borrowing because you may be transacting with a loan shark.
The best thing you can do to determine whether one is a licensed money lender or not is to go to the Ministry of Law’s website where a list of licensed moneylenders in Singapore is provided.
When their names do not appear, they are most probably loan sharks. Be careful.
Fees and Other Charges
Licensed moneylenders are only permitted to impose the following charges and expenses:
- a fee not exceeding $60 for each month of late repayment;
- a fee not exceeding 10% of the principal of the loan when a loan is granted; and
- legal costs ordered by the court for a successful claim by the moneylender for the recovery of the loan.
The total charges imposed by a moneylender on any loan, consisting of interest, late interest, upfront administrative, and late fee also cannot exceed an amount equivalent to the principal of the loan.
For example, if you take a loan of $10,000, then the interest, late interest, 10% administrative fee, and monthly $60 late fees cannot exceed $10,000.
Eligibility and Requirements
Borrowers must be at least 18 years old. Monthly income must be at least S$1,500 for Singaporeans and at least S$2,000 for foreigners.
Steady employment is not a requirement as long as proof of income is presented. The moneylender starts assessing you from the moment you submit your duly completed application form.
Clients’ needs vary. The loans they should get will depend largely on their personal circumstances. The role of moneylenders is not just to give them a loan. They should give them the kind of loan that is most appropriate to their needs.
Fortune Credit Pte Ltd, for example, recognizes that borrowers differ from each other, and hence, it offers different types of loans that can accommodate varying financial circumstances of clients. Fortune Credit Pte Ltd is among the legal moneylenders in Singapore.
How to Report Unlawful Money Lenders in Singapore
Any errant licensed moneylender should be reported to the Registry at 1800-2255-529. Such lending entities will be thoroughly investigated by the Registry.
If proven to have violated any of the rules and regulations set by the Ministry, the lending entity’s license may be revoked. Charges for damages may also be imposed.
The complaint to be filed must contain information that will help the Registry to immediately identify the errant moneylender. Business name, contact number, and license details should, if possible, be included.
In addition, state the facts and circumstances leading and pertaining to the unlawful conduct of the licensed money lender. Rest assured that when you file your complaint, your identity will be fully protected.
You may also opt to directly file your case before the Small Claims Tribunal or the Court under the Consumer Protection Act. This Tribunal or Court has the authority to revoke exorbitant loan transactions in your favor.
On the other hand, loan sharks or unlicensed moneylenders that are harassing, threatening or intimidating you must be reported to the police.
Moneylenders abound in Singapore. They can be helpful but they can also spell financial trouble. This is why it is important that before getting personal and other kinds of loans, you should at least have a basic know-how.
Money lending in Singapore is a competitive business. A lot of licensed money lending companies are viable choices. One of the most credible and competent ones is Fortune Credit Pte Ltd.
Among its competitors, Fortune Credit Pte Ltd offers competitive services and loans. They give you sound financial advice, especially on the loans that are most appropriate for your needs.
Other licensed moneylender and Pte Ltd’s give you legitimate loans but not all of them give you good financial advice and helpful information like Fortune Credit Pte Ltd.