In this article, we are going to talk about how to find the best-licensed moneylender in all of Singapore. Also, we are going to discuss licensed moneylender guidelines, how to choose the right lender, etc.
What is an alternative option of taking a loan from a bank?
Many people think that going to the bank to get themselves a loan is a good thing as banks are safe and secure. They are right about one thing, but they do not know about the wrong thing. This is because the bank takes extra charged from the customers on loans. This is seen in their rate of interest as there is some hidden cost involved.
The banks will never tell you the reason why they are charging you so much interest. This is because the interest rate is the only thing that can finance or profit the bank. So there is another option rather than people going to banks. These are called moneylenders. They are no organisation, but they might be a single person or group of people.
These moneylenders have been there in the market for a very long time. Moneylenders are of two types. One is the licensed moneylender, and the other is called loan sharks. These loan sharks are also known as AH Long in Singapore, which means illegal lenders.
These illegal lenders are the ones who scam people in the market for earning money. They are very eager for the customer to sign the contract and take the loan from them. People usually ask which is the best licensed money lender in Singapore and how to know if they are legal or not. The process is very simple, as you can go on the MinLaw official website and search for that lender.
How to select the best-licensed moneylender in Singapore?
There are more than 150 licensed lenders in Singapore, and also there are loan sharks. These loan sharks impersonate a legal lender and are very easy to catch them. Moneylenders can be a good thing when you want to get urgent cash for yourself. Below given is a list of criteria that every licensed lender has to follow.
- The number of positive reviews about a lender on major websites on the internet.
- Relatively low reviews found on Google, money lenders review site, etc.
- The license should not have been revoked by the Ministry of Law (MinLaw).
- They should have a licensed lending experience of more than eight years.
An important note to keep in mind is that all licensed lenders have some terms and conditions. It is also a thing that not all of them have the same terms and conditions. So it is an extra measure to check out their terms and conditions and then take the loan. You should check their repayment scheme, repayment terms, and also their policies and conditions.
What have licensed money lenders guidelines?
Because of several fraud actions by some lenders, the Singapore government has decided to make MinLaw. They will set up several rules and regulations which every legal lender will have to follow no matter the cost. The rules have to strictly be followed and also obeyed, so they have made some guidelines. They have reduced the amount of interest that a lender can take and also charge on loan.
In October 2015, these laws were made and also established for all the lenders to follow. Make sure that you check whether your lender is following the guidelines or not. This will help anyone to identify if their lender is legal or if they are a loan shark.
You will also have to keep a look at the charge that he is taking to give you the loan. These guidelines will not mean anything if the lender is making more money than the loan amount. Here is a list of guidelines set by MinLaw that every lender should follow.
- If you have been granted a fast loans Singapore, then whatever the reason, the maximum interest is 4%.
- They have to calculate interest on a reducing basis, so 4% is the maximum rate of interest.
- The moneylender can charge the borrower 10% of the amount of the loan as a fee for his services.
- You can only be charged $60 per month if you have made late repayment.
- The maximum interest rate on late repayment is 4$ per month.
- The interest on late repayment should be charged on the amount not paid.
- The total cost of borrowing will include all cost and the lender have to state them separately.
How to choose the right licensed lender?
To choose the right kind of licensed moneylender, here are some of the factors you need to look out for.
- License and accreditation
You will have to ensure that the moneylender has the required license and also accreditation. A licensed moneylender will never try to give you a loan on the phone, email, or social media. They have the policy to meet all the borrowers or clients face to face to discuss the terms.
- Terms and conditions
Always you will have to read the terms and conditions of different lenders carefully. Knowing the terms and conditions helps you to find the loan you want more quickly and also easily. There are different requirements for a person living in Singapore and someone from outside of the country.
There is usually a normal administrative fee and interest rate for each loan taken. Here are some of the fees taken.
- The interest rate on loan should not be more than 4% of the loan amount.
- Moneylenders cannot charge fees more than 10% of the amount of loan taken.
- The late repayment should not exceed more than $60 per month defaulted.
You will have to check the reputation of the moneylender in the market. To find out, you can either go to Google or any other review websites on the internet. You can also go and ask either your friend or even your family for the reputation of the lender.