On the website of Singapore’s Ministry of Law, you can find the List of Licensed Moneylenders in Singapore. The list contains the business name and address, licensed number, contact number, and the website owned by the moneylender. The Registry updates the list to let borrowers know whether the moneylender is legitimate or not. If your moneylender is on the list, then you can take it as an indication that your moneylender has good moneylending practices. However, there are still errant licensed moneylenders in Singapore, which means you need to be alert when transacting with a moneylender in Singapore.
Loans can become a burden if you have availed it from an errant licensed moneylender, or worst, from a loan shark or an unlicensed moneylender. Thus, for you to know what the practices of a good licensed moneylender are, then here are ways to let you know.
- Licensed moneylenders exercise due diligence in approving their clients loan application.
Licensed moneylenders offer convenience and faster loan approvals compared to other financial institutions like banks. However, while this may be the case, licensed moneylenders need to exercise due diligence when granting a loan. One sign of a diligent moneylending practice is that licensed moneylenders must require you to be eligible and pass the required documents before the licensed moneylender can grant your loan application.
If the moneylender approves your loan application without asking any questions or documents, then you should feel alarmed as this kind of practice is prevalent among loan sharks and unlicensed moneylenders. Other signs of questionable moneylending practices are no form of contract signing, grants your loan without asking for your income, withholds any identification card from you, and among others. If this happens, you should cancel your application with the moneylender and report the moneylender to the proper authorities.
- Licensed moneylenders will consider your income when assessing the amount of your loan.
Licensed moneylenders have a minimum income requirement that clients must meet to be eligible for a loan. The income will determine whether the client is capable of repaying the loan or not. More importantly, the income of the borrower will determine the amount that the client can borrow. On the website of Singapore’s Ministry of Law, there is a table that shows the maximum amount clients can borrow for unsecured loans.
If you are to avail of a secured loan, then you can avail of a loan of any amount. However, for unsecured loans, there is a limit as to how much you can borrow. For example, for Singapore Citizens and Permanent Residents who have an annual income of less than $10,000, the total maximum amount that they can borrow is $3,000. For Foreigners residing or working in Singapore and are earning an annual income of less than $10,000, the maximum amount they can borrow is $500.
If you want to know more, you can visit the website of Singapore’s Ministry of Law.
- Licensed moneylenders advertise through allowed channels.
Receiving an offer of a loan through a call, SMS, or email is not allowed in Singapore. There are moneylending laws set by the Government to protect borrowers from falling prey to the advertisements made by loan sharks and unlicensed moneylenders. For the borrowers’ protection, licensed moneylenders can only advertise through three types of channels, which are:
- Business or consumer directories whether in print or through an online media
- Websites that are owned by the moneylender
- Posted advertisements that should only be placed within the moneylender’s business premises
Any advertisement like flyers, calls, SMS, emails, or any advertisement that is not through these three channels is strictly prohibited. You should report to the proper authorities any illegal advertisement as this could be a product of a loan shark or an errant licensed moneylender.
- Licensed moneylenders should have fair and legal interest rates.
One of the reasons why you should transact with a licensed moneylender, and not with a loan shark, is licensed moneylenders have regulated interest rates. Licensed moneylenders can only charge an interest rate at a maximum of 4% per month. For the interest on late repayments, the maximum interest rate is 4% per month for each month the borrower was late in repaying the loan.
- Licensed moneylenders should have no hidden fees.
One of the reasons why victims of loan sharks have trouble paying off their loan is because of exorbitant fees that loan sharks have. Thus, to protect borrowers from exorbitant fees, licensed moneylenders in Singapore can only charge three types of fees:
- A late penalty fee of not more than $60 for each month of late repayment
- An administrative fee of not more than 10% of the principal amount of the granted loan
- Any court-ordered legal fees for a successful claim made by a moneylender for a recovery of a loan
- Licensed moneylenders are expected to be respectful and courteous to their clients.
Harassments and threats are a common practice among loan sharks and unlicensed moneylenders. Like in any other business, licensed moneylenders should treat their clients with respect and dignity. They should not use any abusive language or issue any threats to their clients. They should not ask or force their clients to sign an incomplete or blank contract. They are expected to be honest and should give the client the due principal amount of the granted loan.
Looking for the right moneylender in Singapore?
There are many licensed moneylenders in Singapore, but choosing the right and best one can be difficult. However, with Fortune Credit, you can be assured of ethical moneylending practices that will not put you in a financial burden. The moneylender offers payday loans, personal loans, and among others. If you want to know more, you can visit their website.
