Let’s face it. There will be times when you find yourself needing some cash to pay off an emergency medical bill, or your phone needs immediate replacement and you’re weeks away from your next payday and you’ve used up your savings. There are options such as borrowing from family and friends, and also you can turn to licensed moneylenders in Singapore for a personal loan. However, as a first-time borrower, you might not know where to start, or how to check if a moneylender is licensed. This article is a licensed money lender Singapore review and details why and what to review before applying for loans.
What are licensed moneylenders?
The moneylender act denotes “moneylender” as a person, be it as principal or agent, who provides the business of moneylending. Under Singapore law, no individuals are allowed to be a moneylender unless they are registered and approved with a license, or they are “excluded or exempt moneylenders” as detailed under the Moneylenders Act.
Essentially, Singapore licensed moneylenders are people or businesses who are recognised by the Singapore government to lend you money. Being a licensed business means that they will have to abide by the rules and regulations (e.g. max interest rates charge, late payment fees) set by the law.
Why is it important to review licensed moneylenders before applying for loans?
There are numerous legal money lenders in Singapore, and all of them provide various loans with attractive rates to suit different needs. Therefore it is important that you first research the different kinds of loans available before making a choice. For example, if you need cash to pay for your home renovation down payment, should you take up a fast cash loan or an actual home renovation loan?
Once you have identified the specific loan needed, you can then compare across the different SG money lenders using these factors:
Check your loan eligibility
Singaporeans and PRs have different loan eligibility requirements as compared to foreigners. Generally, the minimum age to apply for any personal loan is 21 years old. Other factors such as minimum income requirements and credit score also vary from one Singapore licensed moneylender to another. Your salary also determines what’s the maximum amount that you can borrow. Under Singapore law, if your annual income ranges from $10,000 to $20,000, the maximum sum you’re able to borrow is $3,000.
Check interest rates, fees, and repayment options
Determine how much money you need. Sure, different SG money lenders offer attractive borrowing sums of up to six months of your monthly income. However, the more money you borrow, the more fees you have to pay. Money lenders in Singapore are allowed to charge a maximum interest rate of 4% per month regardless of how much you earn or if your loan is a secured or unsecured one. Late payment fees are also capped at a maximum of 4% per month, every month a payment is overdue. Be wary of companies who charge higher interest rates, they might be loan sharks.
Money lenders in Singapore also offer flexible loan repayments. Some may require you to pay monthly instalments, or at GoldStar Credit, we also offer you bi-weekly or weekly payments depending on your affordability.
Type of advertisements that differentiates licensed moneylenders from loan sharks
Under the Moneylenders Act, SG money lenders are only allowed to advertise through these three methods:
- Business or consumer directories online, or in print media such as newspapers or magazines.
- The legal money lender Singapore’s own websites.
- Advertisements placed within or on the exterior of the moneylender’s physical office premises.
Hence, do not respond to any advertisements in the form of SMSes, flyers, and social media. Any form of advertisements not mentioned above is not permitted and would come from either licensed moneylenders who are in violation of state laws, or unlicensed money lenders.
Check if the licensed moneylender is listed on the Ministry of Law registry to avoid loan scam
Singapore Licensed money lenders are required by law to be listed on the Ministry of Law Registry of Moneylenders. The document details the business name, physical address, license number, contact numbers, and online websites if the business has one. There have been cases recently where loan sharks are posing as licensed money lenders. Remember, licensed SG money lenders have a physical office which you would be required to come down for a face-to-face verification prior to your loan disbursement. Most unlicensed moneylenders work remotely and might issue you a loan without ever meeting in person.
Also, be cautious when “licensed” moneylenders start to use abusive language, or threaten you about paying up. Legal money lender Singapore will not ask you for your SingPass username and/or password. They will not keep your NRIC or any other personal documents, or ask you to sign an incomplete contract for the loan.
Where to review licensed moneylenders?
The Ministry of Law’s Registry for Moneylenders
– Business name, physical address, license number, contact numbers, and official websites if available.
Loan Comparison sites
– Check the list of Singapore licensed money lenders with the minimum requirements, interest rates, and fees, repayment methods.
– Preferably on Google Reviews, or on various loan comparison websites or social media, where past customers provide licensed money lender Singapore reviews about their experience.
On the licensed moneylenders official websites
– Usually, the official website of a money lender will state its license number, and physical addresses which you can verify at the Registry of Moneylenders. Here is where you can enquire about the loans that you need with their agents online, or head down to their office for more information. Money lender Singapore will ensure the protection of the data you provide and your privacy and that it will be kept strictly confidential.