It has become quite common these days that people turn to a licensed money lender when the need arises for a big or small financial necessity. Usually, people get in touch with a money lender when a major milestone in life such as marriage, higher education, travel, or any other emergency that may need us to connect to a money lender. However, as it is obvious for any financial transaction one needs to do due diligence. Here are the 5 most important things to know about a licensed money lender in Singapore.
A legally operating licensed money lender
In Singapore, it is of utmost importance that the money lender you are contacting must be operating legally. All licensed moneylenders are strictly governed by the Ministry of Law. A Registry of Moneylenders regulates a licensed money lender in Singapore. Before going ahead with your loan, you can research the Registry of Moneylenders to see if your money lender is listed and holds a good reputation.
You have the power to complain
While financial transactions can be intimidating for some, always remember that when it comes to obtaining a money loan in Singapore, the law gives you the right to lodge a formal complaint in case you notice any untoward behaviour from your money lender. You have to be aware that any sort of threat or persuasive tactic or withholding of any information is not allowed. As a borrower, you are also not required to submit your original documents. A licensed money lender would only keep your scanned copies of documents. In case of any red flags, be aware that you can contact the Registry of Moneylenders on 1800 -2255 -529.
You can also make an online complaint by lodging to the registry of Moneylenders website. Once you register a complaint, a formal investigation will be conducted and you may need to give more details during the investigation. But be assured that at any stage your identity would not be disclosed to the money lender.
You do not have to be a Singapore national to get a loan
In this highly globalised world, it is expected that there is a diversity in demographics. This is why you should apply for a money loan in Singapore. The law provides everyone with an opportunity because of its bustling expat population.
All you need if you are not a Singapore national is a few additional documents such as your payslip confirming your steady occupation and your passport along with an employment pass. Bank statements can help in speeding up the process of a money loan in Singapore.
In case of repeat non-payments, licensed money lenders can sue you too
Just as a borrower is allowed to lodge their complaint, similarly a money lender too can legally sue you in case of repeat non-payments and no action despite warnings given by the money lender. Both the parties are legally binding to stand by their contract. In case you find yourself in a position that you are unable to repay the installments at an agreed time frame, it is best to talk it out with your licensed money lender.
You can consider the option of negotiating with the money lender if you can ask for an extension or refinancing. This would help you avoid any late payment penalties. This may mean that you have to incur some additional charges but it is best to be transparent.
Licensed money lenders cannot charge you beyond a certain amount
No matter the amount you are aiming to get a loan for or what your income bracket is, as a rule, licensed money lenders in Singapore cannot charge a borrower beyond a certain amount of interest. The maximum interest rate that a money lender can charge a borrower is 4 percent.
Remember this cap amount is applicable for both nominal interests as well as late interest. You may need to take note of a few finer details like the late interest is only charged based on the amount that remains overdue. The interest cannot be charged on the total loan amount. Apart from the interest, you will need to pay a fee as applicable for the licensed money lender. This amount is over and above the interest that you are required to pay for the loaned amount.
Having clarity of all expenses from the beginning is a key to having an easy, hassle-free loan and a good licensed money lender must make the process smooth.