When we want some quick cash, licensed moneylenders can be the best source of funds. But one should only go for the option of licensed moneylenders. There are many unlicensed moneylenders who are making innocent people victim to eat up their funds and money. They pretend to be legal but in actual life, they don’t have any legal authority to play the role of moneylenders.
These companies charge huge interest in the money they give and if the person is not able to pay the money or interest back on time then rather than following a legal procedure, they choose the path of coercing, threatening, and frightening borrowers. These companies will never tell you that they are not licensed and don’t have legal permission to run this business. That’s why it is your duty to inform yourself about how you can differentiate between a licensed or non-licensed money lender. Below are some of the things that you need to know in order to prevent yourself from falling in the trap.
Licensed Moneylenders Will Always Explain The Loan Terms In A Simple Language
The first thing you need to keep in mind that law plays a big role in this matter and that’s why there are several legal matters that are covered by the moneylenders. The first thing that will help you to know if the moneylenders are licensed or not is that a licensed one will always tell you about all the legal aspects. The reason is that a licensed will know all the legal aspects whereas a non-licensed one doesn’t. By telling you the legal matter and aspect, they will show you what you have to do and what power they have but a fake one will never tell you this point. If you are selecting a Singapore licensed money lender then you need to make sure that they are giving all the information that you need to know.
Licensed Moneylenders Set Unsecured Loan Amounts Based on Your Income
In Singapore, you will be getting a maximum loan amount depending upon your salary for the unsecured personal loan. and that is due to Singaporean loan. From 2016, the rates are:
Below $20,000 annually: $3,000 and below Above $20,000 but under $30,000 annually: equal to 2 months’ earnings Above $30,000 but under $120,000 annually: equal to 4 months’ earnings Yearly income $120,000 and above.
If your so-called trusted money lender is offering you the amount which is strangely higher than what the law is giving then you should consider it as a sign of warning and move ahead. This is a sign of a trap by a non-licensed moneylender.
Licensed Moneylenders Will Always Have You Sign a Contract
It is a legal matter as we said and that’s why it is very important to sign a contract. If you will sign the contract it means you are getting legally linked with the moneylenders and there is an agreement between both. But an unlicensed one will not make you sign the contract. They will never have any legal bondage as they will not be able to try any kind of illegal or false action against you. However, if you have a contract then you have the right to speak against the lender, and the law will help you in that. Most of the money lender Singapore will make you sign the contract as they have a whole law for this matter and if the person claims to be moneylenders and doesn’t make you sign the contract then it would better to switch to someone else.
Licensed Moneylenders Do Not Charge Above-Market Interests
In every market, there is a fixed rate of interest for example at the beginning of 2015, it was 4% a month and that is what the licensed moneylenders will ask for. They will charge you the exact percent and will not charge you more than that. However, this is not the case with a non licensed moneylender. They will charge you more than what the market is going with and will not even make you realize that they are doing such unethical practice. Here your knowledge plays a big role as you are the one who has to be alert about the market updates and trends.
A Licensed Moneylender May Only Charge 3 Types of Fees
Again, law plays a big role in this matter. Singaporean law allows moneylenders to charge only three types of fees which will not include the interest. The first is a late payment charge. If the payment of the loan is not done at the expected time, then the lender can charge you not more than $60 for a month in addition to the interest fees. The second is the up-front service charges which should not go above 10% of the loan value. And then there is a legal fee that comes up from any kind of court challenge. The money lender is not allowed to charge the person more than these maximum amounts of fees. If a moneylender is doing that then you are not in safe hands.
These were some of the things that you need to know if you are thinking to go to a moneylender to lend some money. You should know that an unlicensed money lender can literally make it tough for you to pay the amount that they ask for as they would be too high to pay. You need to keep this information in mind before going to the moneylender.
If you are in Singapore and need some extra money then we have good news for you. There are many moneylenders that you can go for. You might be thinking, is there any license money lender near me. The answer is yes! You can find a money lender near city hall and also a moneylender near Tanjong Pagar are also there to help you. If you are living near Tiong Bahru then you can get in touch with a license money lender near Tiong Bahru and Bugis money lender are also available for you