LoanSingapore - Licensed Moneylenders

1. Licensed Moneylenders A Short Guide to Safely Borrowing Money From LoanSingapore.SG

2. Everyone needs to get a loan sometimes Everyone needs to get a loan sometimes. Although people can ask some friends or family to get money from them, they prefer moneylenders often. The main reason is that moneylenders are fast and the amount is in your account immediately. Banks are another option but their loans have different conditions. Choosing to get a loan from a moneylender has benefits and risks, too. Although in Singapore the government has defined strong regulations for this type business, there are still some inappropriate practices.

3. Loan Sharks vs Licensed Moneylenders However, one licensed moneylender can save your life when you need money most. Loan sharks know that and try to trick people who don't have a lot of options. That is why it is illegal to get a loan from a loan shark. You will find out that interest rate that loan shark will offer you will be really different from the one licensed moneylender will offer you. Have in mind that it will be best if you visit at least three licensed moneylenders before choosing the most suitable one. Although the government in Singapore limits the amount of interest rate, there still are some differences in various moneylenders. Have in mind that you should fulfill every clause in the contract or there will be consequences. No one will ever give you money like a gift so don't think that you should not pay your installments.

4. A Licensed moneylender has to explain to you every clause. Licensed moneylenders in Singapore are forced by the law to explain in depth every clause of the contract. As you may know, in Singapore there are 4 official languages so the government obligates moneylenders to explain their terms in language that client knows. This may sound like a silly rule but it is not. There are people who can't understand fully the English language, and they are not capable of understanding the contract they sign. So if the moneylender doesn't want or don't know how to explain the terms of the contract probably he is loan shark instead of the licensed moneylender.

5. Licensed moneylenders will want to know how big your income is. They will give you a loan based on your income. Unsecured loans are given to people who have regular salary payments. The size of the loan depends on the size of the annual income because moneylenders want to be sure that the client will be capable of paying back the loan. A lot of people think that moneylenders are just throwing away money with enormous interest rates but this is simply not true. No one has the interest to give someone money which can't get back later — he will go bankrupt eventually. However, the maximum loan you can get if your income is less than 20, 000, will be $3,000. This is not much but it is enough to meet ends of the month if you have some unexpected expenses.

6. Every loan has to have a contract It is not possible a licensed moneylender to give you a loan without a contract. The official contract should include information about the amount of the loan, the interest rate, and payments. If the contract is not including all these things you should be really careful and check whether your moneylender is not a shark loan.

7. What will be the interest rate? As we mentioned, the government has defined strong regulations for loans and their taxes and interest rates. From 2015 moneylenders can't give offer you a contract with an interest rate higher than 4% per month because it is illegal. So if you find out that your interest rate is higher (and your contract is signed after 2015) probably you have a business relationship with a shark loan.

8. What about the fees? Moneylenders in Singapore can't define fees that summed with the interest rate, late interest rate, and other fees can't be bigger than the principal of the loan. As you may see, the government has defined this rule in order to defend people who don't read their contracts carefully.

9. What means to be a licensed moneylender? Licensed moneylenders have licenses that prove their ability to develop this kind of business. You may be surprised but moneylending is a business. Everyone who registers a legal business name and company with this kind of occupation can receive a license. The difference is that there is a monthly fee to use such a license. In addition, there is a fee for submitting your documents at first place. Singapore Ministry of Law saves all names and companies that are registered and have received a license. In order to have some selection people who have applied for a license should fill some basic tests. Tests include math and language experience. https://www.loansingapore.sg/