There are several reports about loan sharks transactions in Singapore. The loan sharks are said to present themselves as authorized moneylenders. Potential money borrowers need to gather satisfactory information before applying for a loan from any moneylender. The moneylenders business has positively been affected by the many changes that the Singaporean government has implemented.
One of the contributing factors is the introduction of the set interest rate of 4% each month. This has driven out the bad lenders who had been abusing the system by charging unusually high rates. Reliable lenders in Singapore have adopted the changes making potential borrowers turn to them for their financial needs.
Finding a reliable best money lender in Singapore is essential before you can apply for a loan of your choice. There are important factors for you to think about before dealing with any money lender in Singapore.
Below-listed are simple ways that will guarantee that you are getting a loan from an authorized and legitimate source like loan advisor.
Best Licensed Money Lenders at a Glance
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Confirm The Validity Of Their Certification And License
At present, there are 170 licensed moneylenders listed in the Singaporean Law Ministry’s records. Be sure to refer to their site to make sure that the moneylender is approved to operate in Singapore. Be aware not to apply for a loan from a money lender who is not registered in the Law Ministry’s records.
Licensed and reliable money lenders in Singapore need to meet the many changes set by the Singaporean government and stick to the rules once they have been approved and licensed as legal lenders. This means all their dealings are guided by the set legal requirements. In continually maintaining their reputation and level of service, moneylenders are able to protect their business. Should the money lenders be receiving a series of complaints from their clients, they could end up losing their license.
Transparency Of The Loan Application Process
Licensed and reliable moneylenders in Singapore are supposed to have clear methods of offering loans to borrowers. The Singaporean law requires moneylenders to make clear the conditions of a loan. They should also use a language that is comprehensive and easy to understand for a borrower. The moneylenders should also give you a copy of the loan contract. The loan agreement should contain the repayment plan, the interest rates charged and other fees that you may bring upon yourself.
You can use customer reviews on the moneylender you are settling for to learn more about of their terms involved. You also be able to know of the ways in which they educate their customers of the different loan types they have to offer. You will offer you insight into the level of customer service given by the loan officers.
The Interest Rates Charged On Your Loan
Legal and reliable moneylenders in Singapore are expected to follow the legal limits of interest rates they can charge. Rates of interest should be applied to the loan amount a reliable moneylender in Singapore offers a borrower following the set laws.
As of 1st October 2015, the highest interest rate a moneylender in Singapore can charge was set at 4% a month. However, when a borrower refused to repay the loan taken within the agreed time, the licensed moneylender is allowed to charge a late repayment fee. The late repayment fee is charged to every month the borrower repays the loan contributions late.
The amount charged for late repayment is applied to the loan amount that has not been repaid. An example is when a borrower has taken a loan amount of $6,000 and has repaid back $4,000. The licensed and reliable moneylender is then permitted to charge a late repayment fee on the remaining unpaid sum of $2,000.
It is important for a borrower to read through a loan agreement before accepting the conditions and terms of the loan and signing it.
Confirm The Loan Limit A Moneylender Is Able To Offer You
The loan amount that a reliable moneylender in Singapore can offer you has a set limit. This applies to unsecured loans.
- When your annual earnings are below $20,000, you get a loan of up to $3,000.
- When your annual take-home pay is below $30,000 but above $20,000, you get an amount twice your monthly salary
- When your annual salary is above $30,000 but lies below $120,000, you are able to get an amount of four times your monthly salary
- When your yearly salary totals to $120,000 and above you are able to take a loan of any amount.
When a money lender is ready to loan you ready money that is above the officially permitted limit, then be cautious; something is already suspicious. You should avoid taking a loan from such a lender.
Confirm Your Account’s Statement To Be Sure They Are Correct
Once your loan amount has been disbursed and deposited to your bank account, be sure to check that it is the correct amount you had borrowed. Remember that when you have a loan agreement, it is proof that the agreement is binding on you and the money lending institution or individual. This means that what a borrower has agreed to deliver in the contact letter must be adhered to.
Ensure you obtain a receipt from the licensed money lender showing the payment date, the amount paid and your name. This receipt should also have the official stamp and signature of the authorized moneylender. Ensure to be issued with an account statement after every six months. Always ensure you keep copies of the relevant documents should be required to present any legal documentation.
A loan is intended to help you meet your financial obligations and emergencies. Therefore, ensuring the accounts statements you receive from the money lender are correct will help you avoid getting loans that will cause you financial strains when you are repaying.
In signing a loan agreement with a money lender you will be expected to adhere to your part of the agreement. When you default for any reason or make any late repayments, you will have financial consequences. You will be charged late repayment fees which will add on to your existing loan thus you end up paying more.