A stack of cash being handed over from one hand to another.
Licensed money lenders are regulated by the government and must comply with various rules and regulations. They offer a wide range of products and services to meet the financial needs of borrowers.
By law, they are prohibited from sending threatening letters or calling you at work and home. However, they are allowed to hire debt collectors to recover unpaid loans.
Reputation
Licensed money lenders must follow strict rules and regulations to maintain their license. They should also be transparent with their clients. For example, they should clearly state the loan terms and fees in their loan contracts. If they are unwilling to provide these documents, it is a red flag that they may be unreliable.
You should always choose a moneylender that has a good reputation. A trusted lender will not charge you hidden fees and have a reasonable interest rate. They will also provide clear information about their products and services on their website. You can also find customer reviews online to make an informed decision.
If you are looking for a licensed moneylender in Singapore, there are many to choose from. These lenders are regulated by the Ministry of Law and must adhere to the Moneylenders Act. In addition, they must be able to demonstrate a steady income. This income can come from a variety of sources, such as full-time employment, part-time jobs, or rental income.
Licensing
Licensed money lenders must comply with various rules and regulations to operate legally. These include a cap on interest rates and fees and the requirement to provide borrowers with detailed information about their products and services. They also must register their business with the government and display their license in their storefronts or websites.
Unlike loan sharks, licensed moneylenders will not use harassing tactics to pressure borrowers into taking out loans. They are also required to send their borrowers a written receipt after each payment, detailing how much goes towards the principal and interest. Additionally, they are required to send half-yearly statements of account in January and July.
Licensed money lenders will offer flexible repayment schedules for their borrowers. This is especially useful for borrowers who face financial difficulties such as job loss or health issues. However, it is important to manage your finances responsibly before applying for a loan. If you do not, you may find yourself accumulating debt that could be difficult to repay.
Interest Rates
When it comes to personal loans, banks tend to offer lower interest rates than licensed money lenders. This is because banks only lend to those with credible credit history and stable income. Licensed money lenders, on the other hand, cater to a different group of people who are unable to get a bank loan due to poor credit or low salary.
Licensed money lenders must comply with various rules and regulations when providing financial services to their customers. This means that they should be able to explain the terms and conditions of their loans clearly and in a language that is easy for the borrower to understand. If they are unwilling to do so or try to confuse the borrower with technical and confusing jargon, they may be operating illegally.
Borrowers should also be aware of the maximum amount of interest that a money lender can charge per month. This is stipulated by the Registry of Moneylenders and is capped at 4% per month.
Fees
Licensed money lenders have a variety of products and services to suit different needs. Some offer fast approval processes and flexible loan terms, while others have lower interest rates than banks. It is important to compare all of your options before choosing a lender.
It is also crucial to understand the fees associated with licensed money lenders. In addition to interest rates, borrowers must pay loan-related fees, such as service charges and late payment fees. These fees are regulated by the Ministry of Law and must be disclosed before you sign a loan contract.
Unlike loan sharks, licensed money lenders cannot resort to illegal tactics to collect repayments. They are required to explain their fees in a way that is easy for borrowers to understand and to provide a copy of the loan contract. If they do not comply with this requirement, it is a red flag and you should seek another lender. If you are unable to repay your debt, you may file for legal action against the licensed moneylender.
