A Singapore licensed money lender is a person or company that is legally allowed to lend money to people in need of funds. Unlike loan sharks or unlicensed money lenders, licensed ones are regulated and adhere to the guidelines set by the Ministry of Law’s Registry of Moneylenders. They must also follow standard interest rates and fees to protect borrowers. If you’re not sure whether a certain money lender is legitimate, look up their license moneylender in Singapore number with the registry. You can do this online. If they don’t have a license number or cannot provide you with a list of their customers, they may be a loan shark and should be avoided.
A licensed money lender must also provide a complete, clear loan contract that spells out all the terms and conditions of their loans. This is to ensure that borrowers understand what they’re getting into before they sign the contract. If a money lender makes sudden changes to their loan terms, this is a red flag and should be avoided at all costs.
Licensed money lenders must check a borrower’s credit rating before granting them a loan. This is to make sure that the borrower is able to pay back the loan in time. This is especially important for unsecured loans. Unlicensed money lenders, or ah longs, are known to give loans without checking the borrower’s credit history and often charge high interest rates.
It is important to know that the maximum loan amount you can get from a licensed money lender depends on your annual income. In addition, a licensed money lender is only allowed to charge a maximum of 4% per month for both nominal interest and late repayment interest. This is in compliance with the Moneylenders Act.
Beware of any licensed money lender that charges you an outright processing fee. It is against the law for a money lender to charge you this fee before disbursing your loan. If you are suspicious of a money lender that does this, file a complaint with the registry of moneylenders.
If you are unable to repay your loan on time, the licensed money lender will contact you via written notice to arrange for a repayment plan. The letter will state a deadline and the total amount you need to pay off your debt. If you are still unable to make repayments, the money lender will send you a legal letter of demand. If you don’t respond to the legal letter of demand, the money lender will be allowed to take further action.
If you have a problem with your money lender, be sure to contact the Credit Collection Association of Singapore for help. This organization represents all the credit agencies in Singapore and will help you resolve your issue. They also have an online database of complaints that you can use to find the best reputable lender in your area. You can also file a complaint with the Ministry of Law’s Registry of Moneylenders to avoid dealing with illegal moneylenders.