If you borrow from unlicensed money lenders, your financial woes only multiply. Unlike licensed moneylenders, loan sharks prey on desperate individuals with poor credit histories despite Singapore having strict money lending laws.
Illegal money lenders often run online scams to trick trusting borrowers. The Ministry of Law in Singapore has an official site that lists out the licensed loan providers within the country to protect your interests.
From this list, you can verify the credentials of the potential lender you intend to strike a deal with. Proceed when the loan provider is recognized by governing authorities and licensed to operate in Singapore.
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Remain Vigilant
When dealing with money matters, always be vigilant and stick to licensing authorities who conform to prevailing laws. Under Singaporean law, licensed money lender have permission to advertise through:
- Their official website
- Consumer or business directories via online media or in print
- Advertisements placed within or surrounding the lender’s business premises
Soliciting borrowers via telemarketing services or sending SMS is strictly prohibited in Singapore. Should you encounter abusive behavior from a potential loan shark, you can report them to the Registry of Moneylenders or the Singapore Police.
While filing the complaint, you need to provide the authorities with the lender’s license number, business name, and contact details.
Spot the Illegal Players
Before entering into a loan contract with a potential lender, check for the listed prerequisites that indicate the corresponding authority is a licensed one:
Share a Physical Business Address
Finalize the contract only after confirming the entity’s official business address and making a physical visit. Singaporean law demands you visit the physical location of the money lender to complete the personal verification section of your loan contract.
Questionable operators will invariably make excuses for not providing their physical business location. Even if you search for their contact details online, you will never find a landline number officially listed. More detailed records are sought when applying for a company landline connection.
Follow Legal Processes
Licensed lenders insist on meeting you in person before approving your loan. Loan sharks are willing to approve your application remotely via a call, e-mail, or SMS thereby, bypassing a physical contract.
The absence of proper legal verification processes is reason enough to doubt the authenticity of the party from whom you are borrowing funds. Illegal money lenders resort to phone calls, messages, and e-mails to advertise their services.
These are considered illegal practices in Singapore so, ignore lenders who approach you in this manner. Lenders ask for your financial details like monthly earnings to decide the principal amount you can borrow and assess your loan repayment ability. Unlicensed entities do not insist on such critical financial inputs from borrowers.
Has a Secure Official Website
Reputed Singapore lenders secure their web URL to keep your personal information safe. A padlock icon beside the official website address indicates that any sensitive data you enter here is duly safeguarded.
Established lending entities operate through orderly and user-friendly websites that deliver on speed. Unlicensed lenders lack the resources to ensure proper web-hosting and smooth functioning of an online user interface.
Levy Permissible Interest Rates
In Singapore, there is a ceiling on the loan repayment interest rate to protect borrowers from ending up with heavy debts. Moneylenders licensed in this country will never charge more than the permissible 4% as interest on your outstanding loan amount. You can associate higher interest rates with illegal lenders.
Do Not Demand Upfront Loan Processing Fees
Even before your loan is approved and disbursed, if the lender insists on an immediate transfer of their administrative or processing fee, tread cautiously. Licensed Singaporean lenders never make such demands before disbursing your loan amount.
The processing fee they are legally allowed to levy cannot exceed 10% of the principal loan amount. Should you fail to repay your loan on time, the late repayment fee you owe the legally operating lender does not cross 60 dollars per month.
Issue a Transparent and Clear Contract
Contracts drawn up by licensed authorities specify the interest rate, total loan amount, installment details, and repayment scheme. Moneylenders with hidden agendas refrain from transparently outlining in writing all the integral details surrounding the contract.
Legally Process Your Important Documentation
A licensed money lender will process your SingPass using Singapore government-approved methods. They also return all your essential documents, including your NRIC, on completing the necessary formalities. Questionable money lenders use your credentials to extract more cash from you.
Depend on an established website that freely shares relevant and recent data from Singapore-based legal money lenders. You can then undertake a comparative study to make smart financial decisions.
