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Loan Lenders – When you don’t have enough money to pay your expenses, one of the best options is to get a loan from a licensed loan shark.
Every licensed moneylender in Singapore operates under the Ministry of Justice. So it is safe to borrow from them instead of loan sharks.
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In this article, you will learn what to consider before taking out a loan, how to check that you are dealing with a legitimate lender, the risk of borrowing from a licensed loan shark and much more.
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Also, these two types of loans come in different forms like car loans, education loans or marriage loans.
If it is an emergency, you can opt for a personal loan. On the other hand, if you have a lot of loans, you may decide to take out a debt consolidation loan.
Do you have what it takes to qualify for a cash loan? Money lenders may ask you to meet certain conditions and provide relevant documents in order to receive a loan.
For example, you can get your credit report from Credit Bureau Singapore (CBS) to see your credit score.
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Although most licensed loan sharks do not check your credit, some do not offer loans to borrowers with poor credit.
You will also need to provide relevant documents such as your NRIC and proof of income and employment.
Always make sure you understand all the requirements before signing the loan agreement. This is because you have to comply with the terms and conditions after entering into a contract.
When you borrow money, you have to pay it back. So think about how to liquidate your money lender when you plan to get the loan.
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This will help you avoid the mess because if you are unable to pay the Singapore money lender then they may sue you.
Finally, you need to check the moneylender you are dealing with. Is it licensed or not?
The best way to find out is to check the list of licensed moneylenders in Singapore provided by the Moneylenders Registry.
When you are wondering what is the risk of borrowing from an authorized money lender, it is important to check whether you are dealing with a legitimate money lender or not.
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This is because loan scammers have found their way into the market and you could become a victim if you are not careful.
The first thing to do is consult the list provided by the Ministry of Justice on the official website.
If a lender appears on the list, you can work with them after checking their contact information and address against those listed.
If you want a secured loan in Singapore, you can borrow any amount from a legitimate lender.
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However, if you are looking for an unsecured loan, your annual income will determine how much you can borrow.
This applies regardless of whether the borrower takes out secured or unsecured loans. His salary doesn’t matter either.
A legitimate money lender must charge interest based on the principal amount remaining after deducting the total payments made by the borrower.
For example, if borrower X took out a loan for $6,000 and has already paid back $3,000, the lender must charge interest on the remaining $3,000.
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On the other hand, if the borrower is unable to pay a loan shark in Singapore on time, then a maximum interest of 4% per month may be charged.
This only applies to the late refund. Therefore, the creditor cannot charge late interest on the outstanding balance for repayment.
Also, when the loan is granted, they can charge a fee not exceeding 10% of the capital for administrative purposes.
Finally, they can charge the borrower’s legal fees in accordance with the court order for any successful claim while they try to recover their loans.
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In summary, the total interest and fees ie – loan interest, late payment, late fees and administration fees should not exceed the principal amount received by the borrower.
Before approaching a legitimate lender in Singapore, it is important to prepare the relevant documents. This will help speed up the approval process once you meet with the lender.
You can provide your Singapore NRIC, passport or work pass. This is done to prove that you are the person taking the loan.
This is important to moneylenders because they determine the loan amount you qualify for based on your annual income.
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You can present your CPF contribution history extract for the last 12 months, your latest computerized payslip or your latest Income Tax Exemption Notice.
If you are applying for a bank loan, then you can provide a salary credit to the lender’s bank account.
This refers to a document showing where you live, for example utility bills with your home address.
This is true if you want to apply for a bank loan because most licensed loan sharks will look at your income and not your credit score.
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However, it is important to work on your credit score (especially if it is bad) before applying for any loan.
You can buy a copy of your credit history from Credit Bureau Singapore (CBS) or Moneylenders Credit Bureau (MLCB) to see your rating.
Since you already know the type of loan and the amount you want to borrow, you can work out a repayment plan.
You can do this depending on your monthly income and financial capacity. The plan will also make things easier when approaching a licensed moneylender.
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Plan how you will spend each coin. It can be frustrating to pay back money you can’t account for.
When should you get a loan from a licensed moneylender instead of a bank? When you have an emergency
In such cases, you can borrow from a legitimate lender because the approval process is faster than that of a bank.
You can usually get a cash loan from licensed money lenders in less than 30 minutes when you have the relevant documents.
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Singapore banks and licensed moneylenders use various criteria to verify your eligibility. They determine your eligibility through the documents you provide.
For example, banks must provide you with your credit report to verify your credit score. If you have a bad credit score, they will reject your loan application.
On the other hand, licensed money lenders give you some leeway when checking your eligibility. Most of them do not consider your credit score.
They can also ignore your lower minimum income per year. As a result, you can easily qualify for a loan from a legitimate money lender in Singapore.
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As a result, they see licensed loan sharks as unlicensed loan sharks. However, the two are completely different.
Legitimate moneylenders operate under the Ministry of Justice in Singapore. Hence, they grant loans following the given guidelines.
On the other hand, loan sharks are not regulated by any authority. As a result, they prey on borrowers, overcharging them and even harassing them.
It is safe to borrow from a legitimate lender in Singapore. They operate under the law. Therefore, the opposite case leads to a fine.
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You can report any unfair practices or contracts by a licensed moneylender to the Moneylender Registry at this phone number: 1800-2255-529.
First, make sure you’re getting the right capital from the lender. Keep in mind that you should not charge more than 10% of the principal of the loan approval fee.
Always make sure you repay your loan on time. Plan how to liquidate your money lender to avoid interest penalties and late fees.
If you are struggling to pay your monthly installments, you can ask your licensed lender for an extension.
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Also, make sure you keep all relevant documents safe. Get all repayment receipts and account statements from the creditor and make sure they are correct.
Usually, getting a loan from a licensed loan shark is the best alternative. This is because the approval process is faster and the rejection rate is low compared to borrowing from a bank.
Remember that the Ministry of Justice in Singapore governs all legal moneylenders. They cannot do anything outside the given guidelines or they will have to face the law.
Therefore, you are in safe hands when you contract with any licensed money lender. You can report the lender for any illegal money lending activity.
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If you are looking forward to working with a legitimate lender in Singapore, you can contact BST Credit. We are a licensed lender that has every type of loan you need. The first step in getting a loan from a licensed money lender is knowing whether you should go for an unsecured or secured loan.
Unsecured loans are limited by how much money the borrower earns each month. But secured loans do not have this limitation.
This means that if you have the necessary security, you can borrow up to the maximum amount that the lending institution is ready to provide.
However, regardless of whether you choose a secured or unsecured loan, you need to know how to liquidate a licensed lender in case you have difficulty repaying your loan.
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