When we are in need of financial assistance and loaning from banks is out of the option, borrowing from licensed money lenders in Singapore is a possible alternative. However, if you are a first-time borrower, the information you have is limited and you may not be familiar with the prevailing laws and other policies of money lending. This is understandable, and it is the aim of this article – to equip debtors, especially first-time borrowers of the basic knowledge when planning to apply for a loan.
There are things you need to consider before deciding to take loan from licensed money lenders in Singapore. Let’s try to identify them.
- Assess your repayment capability. It would be best not to bite off more than you can chew especially when money is involved. It is a good practice to measure your financial standing first prior to applying for a loan. If you are sure to be able to pay off the debt within the repayment period, then there is nothing to worry about.
- Consider other alternatives. Before deciding to take a loan from licensed money lenders in Singapore, try for other options such as financial assistance schemes offered by various government agencies or checking with family and friends for financial aid.
- Know the terms and conditions of a loan. Search for the type of loan suitable for your need and know the terms and conditions that come along with it. Money lenders may have different rates, repayment period and policies for each loan. It is a must to know these details before signing any contract for a loan.
Always check the legitimacy of a money lender before negotiating. How do we verify if they are licensed money lenders in Singapore? There are tell-tale signs if they are not legitimate, but the best way to know whether a lender is genuine is by checking the Ministry of Law’s list of licensed moneylender.
Here are some tell tale signs that would help you to determine whether a money lender is genuine. Licensed money lenders will not;
1) Use abusive language or resort to threatening behavior
Be very careful when they behave in a way that’s not professional. A licensed money lender is registered with the government body, ACRA (Accounting and Corporate Regulatory Authority) and is accountable to the government and to the people they serve. Our company registration number is 201222625G and our moneylender license is 42/2015.
2) Retain your NRIC card or any other personal ID documents
That’s no reason why a licensed money lender will retain your important personal ID. But we do check your IDs to verify if you are a Singaporean or PR (permanent resident) of Singapore. We only serve Singaporeans or PRs only.
3) Ask you to sign on a blank or incomplete Note of Contract for the loan
This is a very deceiving act, as the other party can write down terms and conditions that’s mostly beneficial to them. The correct way a licensed money lender does is on 4) .
4) Not grant you a loan without giving you a copy of the Note of contract for the loan and/or without properly explaining to you all the terms and conditions.
The correct way is to let you read the Note of Contract and get your signature on 2 copies of the document for both parties. The borrower will be educated by the licensed money lender on the interest rates, when & how to pay the installment, other charges, etc.
5) Withhold any part of your principal loan amount for any reason.
There’s no reason why this should happen as this is an unethical practice.
If you find other money lenders practicing unethically, you can report to Registry of Moneylenders with the moneylender’s business name, license and contact numbers.