How To Check A Licensed Money Lender In Singapore
When trying to find a licensed money lender in Singapore, you may come across more money lenders than you had initially expected.
In fact, if you don’t know any better, you are likely to be shocked at all the unlicensed money lenders offering Singapore personal loans.
It’s crucial to only work with a licensed and legit money lender or you may end up losing your hard-earned cash and sanity if you are hounded by loan sharks.
This guide will show you how to check licensed money lender so you don’t fall prey to scammers and loan sharks.
How To Check Licensed Money Lender
Before deciding if you should work with a money lender in Singapore, you first need to find out if it is licensed.
In Singapore, the Ministry of Law (MinLaw) requires all money lenders to qualify for a moneylending license. All licensed money lenders are regulated by the Registry of Moneylenders and must adhere to the rules set out in the Moneylenders Act.
The Ministry of Law updates the list of licensed money lenders in Singapore regularly. You can check if your preferred lender is listed there. If it isn’t, that’s a red flag, and you should avoid the lender.
To be doubly safe, compare the money lender’s business name, address, phone number, website address and license number with the details provided in MinLaw’s list to confirm that they match. Many unlicensed lenders impersonate the websites of licensed lenders.
A licensed money lender will also display its moneylending license prominently in its business premises. You can also call the Registry of Moneylenders to verify if a money lender is licensed. You should not deal with loan sharks or illegal lenders that could put you in danger or make your life difficult if you can’t repay your loan on time.
What Licensed Money Lenders Can Do
Licensed money lenders can:
1. Look Beyond Your Credit Score
Most licensed money lenders can help individuals get the money they need quickly and easily. You do not have to worry about being turned down for a loan because of your credit score, bad credit or other reasons.
Licensed money lenders are more flexible than banks when it comes to approving loans and will work with borrowers turned down by other lenders.
They also place less importance on your credit score than banks. Instead, your annual income will determine how much you can borrow from a licensed money lender.
2. Offer Different Types of Loans
If you need a loan but do not know what type of loan is best for your situation, licensed money lenders can assist in choosing the right type of loan for your needs.
There is no limit on how much you can borrow for a secured loan with collateral, but unsecured loans have loan limits pegged to your yearly income.
Apart from personal loans, most licensed money lenders offer fast cash loans, bad credit loans, car loans, wedding loans, and more.
3. Charge Late Fees
As per the Moneylenders Act, the maximum interest rate licensed money lenders can charge regardless of the amount you borrow is 4%. They can also charge late interest capped at 4% if you fail to pay your loan as and when due.
Other fees they can charge are:
- Administrative fee capped at 10% upon loan approval
- Late payment fees for each month you are late with your repayment, capped at $60
- Legal fees if they used the services of the court to recover the debt
4. Recover Their Money Through Debt Collectors
Licensed money lenders in Singapore are allowed to use debt collection agencies to get their money back. Debt collection companies can pursue outstanding debts on behalf of licensed money lenders.
But while following up with you for the money you owe, debt collectors must adhere to the Code of Ethics laid down by the Credit Collection Association of Singapore (CCAS).
What Licensed Money Lenders Cannot Do
Licensed money lenders cannot:
1. Charge An Illegal Interest Rate
The maximum interest rate licensed money lenders can charge is up to 4% per month. If a lender charges you an interest rate that is higher than this, it is probably a loan shark.
While money lenders cannot charge more interest, they are allowed to charge late payment fees that adhere to the Moneylenders Act.
2. Charge Any Other Fee For No Reason
If you have an agreement with a licensed money lender and it charges you extra fees for no reason, it is breaking the law. A money lender is also not allowed to change the terms of your loan contract without notice.
3. Impose Any Fees Before The Loan Is Approved
If the lender asks you to pay any processing fee before it approves your loan, it is probably a scammer or loan shark. Licensed money lenders can charge an administrative fee that is capped at 10% of the loan principal – but only when they have already approved your loan, not before that.
4. Grant Loans Without Face-To-Face Verification
According to the Moneylenders Act, licensed money lenders are required by law to meet with you in person at their office premises to explain the loan contract’s terms, fees, rates, and penalties (late fees, fines, and the consequences of loan default). This is to ensure that you fully understand the contract before agreeing to it.
So any lender that transfers you the money without a meet-up or hands you cash in a carpark without verifying your identity first is an illegal lender or loan shark.
5. Threaten Or Intimidate
Licensed money lenders cannot threaten or intimidate you into paying back your loan. They must act professionally and with transparency and honesty when dealing with customers.
If you feel that a licensed money lender has threatened or intimidated you, report it to the Registry of Moneylenders immediately.
How Much Can You Borrow From A Licensed Money Lender?
A licensed money lender is a company or individual that lends money. A licensed lender will evaluate your income before approving your loan.
Here are the loan caps that licensed money lenders must follow:
|Annual Income Of Borrower||Singapore Citizen Or Permanent Resident|
|Less than $10,000||$3,000||$500|
|At least $10,000 but less than $20,000||$3,000||$3,000|
|At least $20,000||Up to 6x monthly income||Up to 6x monthly income|
What Are The Interest Rates And Fees A Licensed Money Lender Charge?
The interest rates, fees, and charges vary from one licensed money lender to another. Some may offer lower interest rates but charge more fees, while others may have higher interest rates but fewer fees.
But the maximum interest rate licensed money lenders can charge is 4% per month.
So shop around to find the most affordable loan. Compare interest rates and charges on money lenders’ websites or at their physical outlets. You can also call or email them to learn more about their products and services.
What To Do After Loan Approval
Once your loan has been granted, you must make sure that you pay back the amount within the stipulated period so you don’t pay additional fees. Paying on time will also improve your credit score.
If your payments are often late, this will affect your credit score negatively, making it difficult for you to get another loan in the future if needed. Therefore, make sure that you make your payments on time every single month.
Lodging a Complaint Against A Licensed Money Lender
If a licensed money lender mistreated you in any way, you can lodge a complaint with the Registry of Moneylenders at 1800-2255-529.
When making your complaint, provide:
- Your name and contact details
- The name and license number of the money lender
- Details about what happened – the more specific, the better
If you need help dealing with a loan shark, contact the police if the loan shark is harassing you. Do not try to deal with them on your own.
Submit your complaint online: https://www.police.gov.sg/I-Witness
Call the Ah Long hotline: 1800-924-5664
Call the police: 999
If you need a loan, visit licensed money lender Horison Credit today for affordable loans and flexible terms.