Whether you’re a foreigner or a local, it’s very important to consider the tips below if you would like to choose a licensed moneylender in Singapore.
No matter how you look at it, sooner or later you will need to take out a loan. At the same time, taking out and paying back a loan is a serious responsibility. So before you rush and choose the first moneylender in Singapore that you find online, try to take things one step at a time. Be sure to follow the tips below to find a licensed and credible money lender that offers customised loan solutions and personalised support.
Credibility of Licensed Money Lenders
One of the first things you need to do prior to choosing a money lender in Singapore is do some research to learn more about the lender’s reputation. You need to check the lender’s license, since this is a good way to verify whether the lender is operating and that he also has a valid license issued by Singapore’s Registry of Moneylenders. Online interviews and research are a great way to find the ideal consultant that can help you make an informed decision prior to deciding to take out a loan from the first lender you find. Even more, it’s important to choose a moneylender that has been involved in the industry for at least 3 to 5 years, since this is a good amount of time that can effectively reflect the lender’s reputation and performance.
Interest Rates from Money Lenders
When you apply for a loan, you need to be aware of the fact there are interests rates associated with it. You may be able to find a lot of moneylenders in Singapore that offer very low interest rates, but the truth is that those who offer significantly lower interest rates may have something shady going on.
It’s true that legal moneylenders can indeed provide low internet rates for their customers, but if the rate is too good to be true, then it probably is. You should also make sure to check for hidden fees before you decide to take out a loan from a particular lender. There is very important information in the fine print, so never sign the contract prior to carefully reading it.
Depending on the loan lender you decide to borrow money from, some of them may also have loan limits. These differ based on the each particular lender, so make sure to find a lender that can borrow you the amount of money you need for a low interest rate.
On top of the loan limits, licensed moneylenders in Singapore need to adhere to certain legal limits when it comes to interest rates.
4% Maximum Interest Rate from Money Lenders
Starting October 1st 2015, no money lender in Singapore can charge more than 4% interest rate on the money they lend to customers. In the event the customer is late with paying back the loan, the maximum late fee the lender can charge is 4 percent for each month past the initially agreed repayment date.
It’s important to mention that the late interest fee can only be applied to the cash amount that has not been paid back. So if you took out a S$10,000 loan and you only paid S$5,000 back, then you’ll only pay four percent out of the remaining S$5,000.
There are also other fees that the lender may charge, as following:
- A maximum penalty of 10 percent of the loan’s principal when you take out a loan.
- A fixed fee of S$60 dollars for each month past the repayment date.
- Potential court ordered legal costs if the moneylender needs to take legal action to recover his money from the borrower.
In Singapore there are currently one hundred and seventy moneylenders who are registered with the Ministry of Law and are fully licensed as well. If the lender you want to borrow money from is not on this list, then do not borrow money from them.
Loan Application Process by Money Lenders
According to Singapore law, money lenders need to explain in plain terms to their customers the fees they’ll be charged for the specific loan amount they want to take out. They also have to provide customers with a copy of the loan contract which needs to include any potential fees the client may incur, interest rates charged for the loan, and the repayment schedule.
There are certain things you need to be aware of when planning to take out a loan, including:
- Being approved for a loan with no checks, such as approving over the phone, E-mail, over SMS, and online.
- Retention of personal original documents (work permit, driver’s license, NRIC card, etc).
- Requests to sign an incomplete or blank loan contract.
- Refusing to give you a copy of the loan contract.
- Any use of foul or abusive language.
It’s important to note that there’s currently a MLCB or Moneylenders Credit Bureau that keeps info on the loan and repayments of everyone who decides to take out a loan from a licensed moneylender. This is for the purpose of assessing your creditworthiness (by the moneylender). If you’d like to get a copy of your record, you can do so by clicking here.
Flexible Loan Repayment Schedules
Prior to sending your loan application form, you need to think about the repayment amount you’re comfortable with. You can discuss this with your loan lender to see whether the repayment amount you’re comfortable paying is acceptable or not. Make sure to choose a money lender that is patient and takes the time to answer all your money lending questions, including the amount you can borrow, interest rate, repayment, terms, and other factors that can help you get the best loan package.
Loan Products and Services
Once you managed to assess the money lender’s approval process, interest rate, reputation, but also credibility, check his services and products. Stick to a lender that offers a wide range of loan products, since if you’ll require more and different financial services in the future, you know where to go. To offer some examples of popular loan packages companies offer, they are debt consolidation, vacation loans, but also unsecured loans, business loans, foreigner loans, payday, and personal loans.