Many Singaporeans are uncomfortable with taking loans. Unfortunately, there are many things you require a personal loan or payday loan for. And the quickest way to get a loan is to visit a licensed moneylender.
Moneylenders are another group of people that have a bad reputation in Singapore. There are so many half-truths and complete lies surrounding them. Many Singaporeans would rather try their luck at a bank than go to a moneylender. This article is going to dispel 10 common myths associated with moneylenders in Singapore. These myths may be part of what is stopping you from getting a loan.
Know these things today and go to a licensed moneylender for your personal loan or payday loan without worries.
Myth #1 – There is only One Type of Loan to get from a Moneylender
This is not true. There are actually two types of loans that you can get from a licensed moneylender. These are secured loans and unsecured loans. Secured loans are those loans that you must have collateral to get them. Collateral is a valuable asset that you give to the lender to hold while you borrow money. If you cannot repay the loan, the lender keeps the asset. An unsecured loan is one that you can get without collateral. If you default on your repayments, the lender will take you to court, per the contract you and they signed.
Myth #2 – Secured Loans are Better than Unsecured Loans
These loans have their advantages and disadvantages.
- A secured loan comes with comparatively low interest rates since there is a low financial risk for the lender
- Because you have collateral, you can borrow large amounts with longer loan tenure
The disadvantages outweigh the advantages, though.
- There is a specific criterion for what you can use as collateral
- A secured loan takes a long time to process and approve. It can take up to 30 days
- Defaulting on your loan repayments gives the lender the right to confiscate your assets and sell them to pay that loan.
Myth #3 – Unsecured Loans are Better than Secured Loans
The pros of an unsecured loan are:
- Unsecured loans take a short time to process and approve. You can apply and receive your loan in hours
- You can get an unsecured loan even if your credit score is poor
- You don’t need to secure your assets for this loan
And the cons are:
- Since unsecured loans are riskier, they attract higher interest rates
- The amount you can borrow is limited and is determined by your monthly/annual income
- The loan tenure is short, and repayment plans are strict
Myth #4 – All Moneylenders in Singapore are ‘Ah Longs’
This is also not true. Moneylenders are actually a legalized lending institution. They have an association, and their activities are governed by the Ministry of Law. All moneylenders are required to be licensed, and they must pass certain tests before they can get that license. There are unlicensed moneylenders, the real ‘ah longs’ who deceive people and make their lives miserable. But not all moneylenders are loan sharks.
Myth #5 – You Can’t Tell the Difference between a Licensed and Unlicensed Moneylender
There are many differences between licensed and unlicensed moneylenders. Some of the most telling cues are:
- A licensed moneylender will never keep your documents
- A licensed moneylender will never ask for your ATM card
- A licensed moneylender will have a license number, and their business name will be in the Registry
An unlicensed moneylender will do the opposite of these things
Myth #6 – There is No Way to Spot an Unlicensed Moneylender
You can tell if someone is a fake moneylender if they:
- Send you an SMS, offering you loan – licensed moneylenders do not solicit for customers via SMS
- Advertise on television – licensed moneylenders can only advertise in business directories and on their place of operation
- Ask for your SingPass password – that is just wrong
- Generally, behave in a fishy manner: they are rude, impatient, etc.
Myth #7 – It Is Difficult to Get a Trustworthy Moneylender
There is a Registry, containing the names and license numbers of over 170 licensed money lenders in Singapore. This information is available to the public. When you are looking for a moneylender, you can look them up in the Registry. When you go to their place of business, ask to see their certificate. The certificate will contain the license number. There are many reliable moneylenders in Singapore. You just have to create the time to see them. It is not at all difficult.
Myth #8 – It is Difficult to Select the Best Moneylenders in Singapore
These myths just keep getting better. Finding the best moneylender in Singapore s easy, as long as you know where to look. Check out our money lender singapore reviews online. Ask people who have had experience with moneylenders. Compare their interest rates. You will know who the best moneylenders are in no time.
Myth #9 – There are Too Many Options to Choose From
This should not be a limitation. This is actually a good thing. It all depends on you and your needs. Compare the services and terms and conditions of a few moneylenders. Look at their interest rates and their fees. Pick the one that works for you, and send in your loan application.
Myth #10 – Actually, There is No Need for a Loan
This is probably the biggest myth of all. Unless you are one of the very few who can live well in Singapore on their salary alone, you need a loan. There are bills to pay, medical care, tuition, groceries, rent, car payments… the list goes on. Once in a while, you may need a loan to settle some of these obligations. It could be a personal loan or a payday loan. It could be from a bank or a moneylender. Your monthly salary won’t be enough sometimes unless you earn hundreds of thousands every month. Getting a loan is actually beneficial. So get one if you must.