You might be tempted to approach the first moneylender you see in Singapore, but that can be a costly mistake. If you’re not careful, you could end up dealing with an unlicensed moneylender who won’t hesitate to take advantage of your desperation for cash. Unlicensed moneylenders charge more than legal ones, and defaulting on payments often leads to harassment.
The government is cracking down on these illegal operators to protect consumers, but you should be careful before choosing a lender from the moneylender list available online. You should always refer to a trusted website while checking for recommendations.
To make sure you only deal with licensed moneylenders, follow these tips to identify them before you sign any agreement.
Check If They Are Licensed
The Moneylenders Act provides that no person shall act as or carry on business as a moneylender except under and following a money lending license issued by the Monetary Authority of Singapore. Before you seek help from any moneylender, check if the Ministry of Law licenses them. If an individual is found carrying on business without a valid license or an expired one, they can be fined up to $2,000 for each offense.
Look At Rates
When you visit your local moneylender, there are two important things to look out for: how much interest they charge and what charges they levy?
If it’s an unlicensed moneylender, you’ll likely be charged much higher rates and fees than those provided by licensed moneylenders. This is because these illegal lenders don’t have to adhere to any lending laws or regulations. Therefore, never agree on a loan if it sounds too good to be true. Also, make sure to refer to the licensed moneylender list before striking any deal.
Ask About Their Service
Before signing any agreement with a moneylender, you should ask about their service and experience. What makes them stand out from other moneylenders? Ask for references so that you can personally call and speak with former clients. This will give you more of an idea of what their service is like. It’s also important to note how long they have been serving clients and which associations they are affiliated with.
You should also ask for a contract that has all your agreed-upon terms written down before signing it. The contract should have the same terms as discussed. However, it is essential that you can read and understand all of what is written in your contract before signing it.
Check For Recommendations
When looking for a moneylender, ask around. Friends, family members, colleagues are your best source of information. They might have had bad experiences, or they may have found someone reliable. Check with these people if you’re unsure where to start and who is reputable and who isn’t. If you don’t know anyone who has borrowed from a lender before, there are other methods to find one, including searching on social media or reading reviews online.
Go Through Their Customer Testimonials
If you’re looking for recommendations, check customer testimonials on their website or social media channels. Not all moneylenders will advertise positive reviews, but you know that they’re confident about their services if they do.
Also, read through forums and articles to get an idea of what other people are saying about licensed moneylenders. So, make sure the moneylender list you go through has some of the most reliable names.
The Bottom Line
You can check if an individual is licensed or not by visiting the Ministry of Law, Singapore website. There, you’ll find information about whether your potential lender has any disciplinary actions on their records. If you’re checking someone out who claims to be licensed, but you don’t see them listed here, then they may not be registered and probably not the right source of borrowing money. And that could also mean they aren’t legally allowed to operate as a moneylender.