When it comes to borrowing, we cannot just randomly trust any lender. One needs to entrust a recognized banking institution or a licensed moneylender in Singapore for this purpose. When we cannot get the required loan terms from any of the conventional banks, we turn to a good loan company. However, many find it challenging to find a trustworthy licensed moneylender in Singapore. There are hundreds of companies that are not actually legitimate money lenders and can entrap borrowers with unreasonable loan terms and even misuse their trust. Thus, we all need to be watchful. How can you discover whether a loan company is indeed a licensed moneylender?
Our team at Avis Credit can help you out with this fix! In this article, we shall uncover some of the facts that can assist you in landing a good licensed moneylender in Singapore.
Things you must know to find a licensed moneylender in Singapore!
Here we have some cues that can help you differentiate between a licensed moneylender and an illegal credit company.
1. There are no ambiguous terms involved in the loan agreements
Any trustworthy licensed moneylender in Singapore would not have any malign motive towards its clientele. They shall be forthright about all the requirements and compliances related to the loans they provide. From the very beginning, you will find them to be clear with the terms related to the loan limit, repayment options, interest costs, and the collateral requirements. Thus, when looking for the desired loan company, you should always look for transparency and clarity.
2. Licensed moneylenders will ask for a valid contract before lending the funds
Most reputable licensed credit companies are clear about signing an appropriate contract before sanctioning any loan. Even the legal framework of Singapore mandates all lending entities to create a valid contract with their borrower. A lawyer must draft the contractual terms, and it should comprise all details related to the loan amount, interest rates, repayment timeline, and penalties or fees chargeable on delays. Do not fall prey to any random credit company that offers to give out loans without any necessary agreements and paperwork. You can get yourself into great trouble if you do not agree on adequate terms and contracts. There are chances of exploitation by the lending company if you fail to sign a contract or review the terms before signing one.
3. The interest rate that suitable loan companies charge is in line with the market rate
A licensed moneylender is supposed to adhere to the requirements as needed by the Ministry of Law in Singapore. It cannot charge any interest as per its whim. As of 2021, the lending rate in Singapore is 5.3 percent. Any fraudulent moneylender or loan shark can charge higher interest than the market rate defined. But a licensed moneylender will not charge interest above and beyond their market rate. You might find more money through the loan scheme, but if the interest rate is higher than the specified market rate, you should avoid such a lender.
4. Such moneylenders have a proper legal status
Show your license! The best way to identify a licensed moneylender in Singapore is to view their registration. Such credit companies will have their license posted on their office premises for their clients to view. It is one of the best ways to determine whether the moneylender is qualified to carry out lending activities and can serve its clients suitably. You can also find the name of such a loan company in the official list of licensed moneylenders in Singapore.
5. A licensed moneylender would not ask for sensitive private details from you
There are specific types of information and documents that moneylenders can demand from a borrower. A licensed moneylender in Singapore will not demand sensitive details like your bank account access. They will only ask for essential documents like national identification proof and employment records. If you want a moneylender prying to find more details about you than needed, you should stay away from such a company.
6. A legitimate loan company will have a proper physical office
Any licensed moneylender in Singapore will possess adequate office premises where it can conduct its business in an orderly manner. You can be more assured about the legitimacy of a prospective loan company if you can verify their official location, duly registered for their money lending license.
7. A licensed moneylender in Singapore levies charges in line with the country’s regulations
All licensed moneylenders in the country have the right to levy only those charges that the law permits. In Singapore, licensed money lenders can primarily ask for only three types of fees other than the interest on the loan.
- They can levy a late penalty charge in case of repayment defaults. The late fees cannot exceed the specified limits. The late payment interest shall again remain within the threshold.
- Moneylenders can ask for legal costs in case of any court-related disputes.
- There can be an upfront service charge. This fee shall not exceed the specified percentage (10 percent) of the loan value.
Any moneylender who claims to be licensed but does not meet any of the mentioned criteria can be a loan shark or a fraudulent company. Borrowers in the face of urgent monetary needs tend to fall into the trap of undesirable credit companies. The above checklist can assist you in finding a good licensed moneylender in Singapore.
Avis Credit Pte Ltd. – Your trusty licensed money lender in Singapore!
Avis Credit Pte Ltd is among the stellar licensed money lending companies in the country. Our financial pros offer reliable and flexible loan-related services. You can check out our loan options to meet your financial needs seamlessly. Contact us now!
