Life may be somewhat unexpected at times. You may occasionally find yourself in need of immediate cash, but your savings are insufficient. You may have considered taking out a bank loan, but what if you can’t get through the red tape? The paperwork, the wait, and the uncertainty of not knowing if your application has been granted. But don’t be concerned. You might consider licensed money lenders in Singapore as a potential option.
A certified, licensed money lender may make the process of getting a loan go more smoothly and quickly. But, with licensed money lenders in Singapore frequently being connected with “ah longs,” how can you tell the difference between a licensed and an illegal money lender? What qualifies a money lender as a licensed business?
Although the terms licensed money lender and unlicensed moneylender may seem similar, there are some significant differences between the two.
We shall define licensed moneylenders and unlicensed moneylenders in this post, as well as explore how they operate.
You’ve come to the correct spot if you’re interested in learning more about licensed and unlicensed moneylenders. Let’s get started with the definition of a licensed moneylender without further ado.
What Are Licensed Moneylenders and How Do They Work?
Licensed moneylenders are non-traditional loan organizations that provide short-term loans in a nutshell. They help both short-term and long-term borrowers who want immediate financing.
A licensed money lender in Singapore, unlike traditional lenders such as banks, is backed by private investors. Personal loans, payday loans, immigrant loans, business loans, and bridging loans are all available from a licensed moneylender.
Licensed Money Lenders In this scenario, transparency refers to the clear conditions that should be disclosed in the loan contract that you are provided.
To begin with, all licensed money lenders in Singapore must communicate the loan’s terms and conditions to you in a clear and concise manner.
They must also present you with a loan document that contains all of the loan terms and conditions, as required by law. The payback time, payment method alternatives, the interest rate imposed on your loan, and any other factors that may have an impact on your loan, in the long run, are all included.
Unlicensed money lenders
Unlicensed money lenders, on the other hand, frequently do not present you with a contract that includes these terms.
Additionally, be aware of unlicensed money lenders that may give you PDF documents as part of your loan application procedure.
These files are frequently delivered over SMS or WhatsApp, purporting to be from the Money Authority of Singapore (MAS) or the Ministry of Law (MinLaw), and indicating that a deposit and GST must be paid before the loan can be authorized.
Such documents are commonly used in lending frauds. Remember that you are not obligated to pay any fees until the loan is granted.
According to MinLaw, licensed moneylenders are only allowed to charge up to 4% per month for their loans.
A licensed money lender’s interest rate is normally dependent on its appraisal of your creditworthiness on top of this cap.
Licensed money lenders can only impose a late interest rate of up to 4% per month for late payments. This late interest rate only applies to the balance you haven’t paid.
Unlicensed money lenders, on the other hand, can demand absurdly high-interest rates and late fees, typically exceeding 4% per month.
Furthermore, many of them may decide to incorporate extra hidden prices such as processing fees and other payments.
When you take out a personal loan from a licensed money lender in Singapore, they are only allowed to levy specific fees and levies.
For each month of late payments, a fee of not more than S$60 will be charged.
When a loan is authorized, a fee of not more than 10% of the loan principal is charged.
The court has ordered the licensed money lender to pay the legal costs associated with a successful loan recovery claim.
One thing to keep in mind is that a licensed money lender cannot charge total fees that exceed the loan’s principal amount. Interest, late interest, an upfront administrative fee, and late fines make up the overall expenses.
Unlicensed money lenders in Singapore have recently come under fire for requiring clients to pay money even before the loan is approved. They send out SMS and WhatsApp messages offering loans to customers as part of the scam.
They also tell individuals that they must pay a deposit and GST for the loan processing cost. People who choose not to pay or cancel the debt will be hounded and informed that they must pay to cancel it.
If you find yourself in this circumstance, you’re probably dealing with an unlicensed moneylender.
Avis Credit (SG) Pte Ltd is a legitimate money lender in Singapore, having a license from the Ministry of Law’s Registry of Moneylenders. Our business is respectable, well-known, and well-respected. We understand our clients’ worries as the top money lender in Singapore, and we recognize that each scenario and requirement is unique. As a result, all of our loan officers have undergone extensive training in order to assess your circumstances and deliver the most appropriate and tailored loan package for each of our clients. Only a few regulated money lenders in Singapore are open on Sunday. Fortunately, we are open on Sundays since we recognize how busy our clients are and that some of them may only be available on Sundays.