Tell-Tale Signs of a Licensed Moneylender in Singapore

More Singaporeans are turning to licensed moneylenders now as it’s easier to get a loan from them than from a bank -the reason being that a bank loan application is a long, tedious, and time-consuming process as compared to getting a loan from a licensed moneylender. This has led to the surge in the number of moneylenders popping up in Singapore over recent years. Even though the moneylending industry has been evolving, there is a fine line differentiating the licensed and unlicensed moneylenders. Here are some crucial factors that you must consider before taking a loan.

Conduct a database search

Unlicensed moneylenders are still on the rise despite the Monetary Authority of Singapore’s efforts to curb illegal money lenders. They can easily masquerade as authentic ones by displaying fake registration numbers which can misguide Singaporeans if you're not cautious enough. If in doubt, you should conduct a business search using the Registry of Moneylenders portal under the Ministry of Law website. Their website is regularly updated with new licensed moneylender information.

Physical office premises

Before taking a loan from any moneylender, you should also visit their physical premises to validate the authenticity of their registered office address. Ask as many questions as possible before taking a loan from the moneylenders, and visit their corporate website to find out more about their product and services, their clientele, and customers’ testimonials. Most of the unlicensed moneylenders use fake registration numbers, office addresses, and business names of licensed moneylenders without their approval.

Privacy of Data

All licensed moneylenders in Singapore are required to adhere to strict established lending guidelines stipulated by the Ministry of Law. A licensed moneylender is not allowed to solicit for loans via SMS, WhatsApp, phone calls, or on social media platforms. Furthermore, a licensed moneylender will not retain your personal documents like your NRIC, ATM card, Singpass user ID, and password and will never get your signature on blank documents. Unlicensed moneylenders will use unorthodox methods to solicit new clients.

Transparency

Licensed moneylenders will not have any hidden clauses in their contracts as there is transparency in their application processes. Their loan contracts will clearly state the repayment terms and period, the interest rate, the loan quantum, the loan period, and other ancillary costs if any. Should any of this crucial information be missing, it is advisable to look for another licensed moneylender. According to the Registry of Moneylenders, lenders are required to state all terms and charges upfront. The maximum cap that licensed moneylenders can charge on their interest rate is 4 percent per month, regardless of their loan amount and the borrower’s income.

Repayment Flexibility

Most moneylenders can provide you with the loan you need. But make sure that you discuss the payment terms openly, as this could lead to problems later on. It would be wise to choose a licensed moneylender who offers flexible repayment schedules. Before signing any contract, check on the repayment terms, interest rates, and other factors that will affect your loan eligibility. In general, most licensed moneylenders will conduct an extensive background check before approving any loan application to ensure that you're able to meet the monthly repayments.

Body Language and Speech Tone

Most licensed moneylenders are well-groomed and take great pride in their work. They operate from their registered business address, their staff is courteous and well-mannered, and will take time to explain the services offered and the loan repayment terms and conditions. Illegal moneylenders, on the other hand, will be intimidating, may even use foul language, and display pushy behaviour.

Variety of Services

Another important factor to consider is the licensed moneylender’s scope of services. You should select a licensed moneylender who can provide a one-stop service for all your loan needs. For instance, if a licensed moneylender can provide a variety of loan packages like renovation loans, personal loans, educational loans, business loans, and debt consolidation loans, all your loan requirements will be met and you don’t need to source for another lender for your future financial needs.

In conclusion, sourcing for a licensed moneylender can be tricky, but if you follow the above guidelines, you will be in safe hands.