It’s undeniable that Singapore has a relatively high share of loan sharks. However, a licensed moneylender that provides legitimate lending services exists in the country, and the government regulates their activities entirely.
Most of your negative thoughts about licensed moneylenders came from generalizations and horrors stories. Across the internet, narratives about working with money lenders make you understandably cautious. True enough, it does sound unbelievable that money lenders in Singapore allow you to borrow money without collateral or excellent credit scores.
However, by reading these 10 myths about the industry, you’ll want to work with a licensed moneylender in your area.
Myth 1: All Moneylenders in Singapore are ‘Ah Longs’
Loan sharks do exist in Singapore, they are usually coined as ‘Ah longs’ and they’re plenty. You can find them easily by performing due diligence on the background of companies you intend to use.
Indeed, there are legit money lending services provided in Singapore. Money lenders are legitimate businesses if they present you their license number. Most of the time, legal ones will place this number series on their website or you can request the certification from them in their office.
You can also check on MinLaw / Registry of Moneylender website to check their authenticity.
Moneylenders in Singapore put their borrower’s needs first. Their intention is to help and keep their business running. In doing so, they protect their borrowers and their industry by following the rules and regulations that the Ministry of Law imposes.
Myth 2: There is only One Type of Loan to get from a Moneylender in Singapore
This is not true. You have a wide variety of loans to choose from. Whether it’s secured or unsecured loans, you get access to all the options available from local money lenders. However, they can limit the amount you can borrow from your loans, depending on your regular income.
All moneylenders have their rights reserved when it comes to unsecured loans. However, this is for the borrower’s good. High-value loans can put customers in the red, taking up beyond 50 percent of their regular income.
Borrowers spend money on food, utilities, and other necessities. Therefore, unsecured loans with limitations are a form of safeguard that will only drive borrowers to the ground if they insist on having their declared amount.
A simple payday or personal loan is an example of an unsecured loan. These are small, short-term financing with high interest rates. Most banks and financial institutions can approve them quickly for the borrower’s benefit.
If you have properties of high value, you can use them as collateral to pay any financing in case you default or fail to pay your payments on time. Most financial institutions agree to absorb these collateral in full value depending on the total debt of a borrower. Collateral appraisal and criteria require banks to investigate items and properties extensively, the reason for which secured loans take longer to approve than unsecured loans.
Most business, property development, venture, and investment-oriented financing products from banks are some examples of secured loans.
Myth 3: The application process for loans are tedious
All unsecured loans have less than a week for approval. While you might have fewer opportunities to take out big loans with higher interest rates, unsecured loans get approved immediately with virtually every Singapore lender.
Licensed moneylenders that are engaged with Loan Advisor can approve all loan applications in 30 minutes if you are qualified for the loan criterias and submit all the necessary documents on time. With this in mind, you can use them for emergency funding. For example, if you need emergency loans, you won’t need to mind the higher interest. The short-term payment period is enough to make sure you can repay the lender by your next payday.
Myth 4: You can’t take up a loan with poor Credit Score
It does seem like one of the most unbelievable myths you can hear from advertisements. However, it is true; you can get loans approved even with a bad credit score when you use licensed moneylender
With banks, you can only get approval for loans if you have good credit. However, anybody with bad credit will find it difficult to rebuild their scores, especially if no financial institution is willing to provide loans to help them recover their scores.
If you can prove that you can pay for your loan with a steady income stream because you have a job, you won’t need to deal with higher interest rates. Additionally, licensed money lenders can even provide debt consolidation services.
Myth 5: Secured Loans Is Always The Way to Go With Moneylenders
One of the many licensed moneylender myths is this: with collateral, applying for a secured loan with money lenders seems the best way to go. You enjoy lower interest rates than unsecured loans. However, like banks, licensed moneylenders will take some time to evaluate your collateral until they can process and approve it.
Licensed moneylenders can approve your loan in less than a week. Then again, you’ll have limited amounts you can borrow and depend heavily on your monthly and annual income. You’ll need to pay your loan in the fastest time possible too.
To make the best choice in this situation, consider your purpose for your loan. If you’re looking for a payday loan to ease your financial situation, then an unsecured loan with short-term repayment becomes the best choice. On the other hand, secured loans might take longer, but they will provide the best amounts that cover your future financial needs.
Myth 6: Moneylender’s loan interest rates are higher than the Banks in Singapore
Truthfully, this is one of the biggest myths most people believe about the country’s legitimate lenders. All regulated lenders cannot charge any interest rate higher than 4%, including an unsecured loan application. On the other hand, other myths involving banks mention they cannot go beyond a 4% interest rate. In truth, they can.
However, you can have access to higher amounts when you work with banks. For this reason, lenders have their rights reserved when it comes to the total amount they provide for a loan.
Myth 7: It Is Difficult to Get a Trustworthy Moneylender
One of the trademarks of a licensed money lender is providing loans with fair interest rates. Additionally, a licensed money lender respects all the stipulations of a loan application upon approval. In doing so, they’re not going to change the interest rates of loans, especially when you’re about to reach the end of your loan contract.
When you work with an unscrupulous money lender, they’ll try to make money off of you by trapping you in your contract for as long as possible. They can increase your interest rates without warning in addition to harassing and shaming borrowers who have failed to pay their debts on time.
To avoid these dangers, always check the Ministry of Law’s list of legitimate money lenders. The Registry of Moneylenders gets updates regularly. It pays to do your research and avoid losing a considerable amount of money to loans with unfair terms.
Myth 8: Moneylender Loans Have a Higher Risk than Bank Loans
One of the most outstanding myths in the country is that banks are the only ones that can offer a financial reprieve for borrowers. This isn’t true. Singaporeans and foreigners in the country can depend on moneylenders for money when they need to pass through a payday where they’ve come up short of cash.
However, we do not discount banks as a formidable source of financing. However, if you have bad credit, it’s better to work with lenders to recover your scores. Most of these institutions offer an adequate debt consolidation program that aims to restore your credit and give you desirable standing with banks and other financial institutions.
Myth 9: Licensed Moneylenders Can Use All Kinds of Outreach and Advertising
According to law, all moneylenders in Singapore can only advertise within their physical vicinity. This rule means they cannot use print, TV, and radio advertisements unless they make it visible or hearable within their branches only. If you see posters telling you to call a number for fast loan transactions, you can be sure it’s an unscrupulous lender. A licensed money lender will never reach out to you.
Licensed money lender digital advertising is only through its website. They cannot email or chat with you using applications or social media. Therefore, they’re restricted to search engine marketing. Don’t pay heed to an invitation through email or social media chat about your qualification to use a financial service from any party.
Myth 10: Moneylenders in Singapore are not Financially Secure
When you work with unscrupulous loan companies, they’ll try to put you down and milk every last amount they can when you use their service. However, lenders in the country require licensing. In doing so, they’re under the supervision of the Ministry of Law.
Borrowers can report any harassment or poor lending services to MoL and the Registry of Moneylenders. Doing this task allows these governing bodies to review and possibly suspend the services they provide.
Furthermore, borrowers can receive compensation for the atrocities of the offending loan provider, take note that a licensed money lender has funding to secure all the loans, miscellaneous and assets before operating. With Helpful Moneylenders in Singapore, You Can Ease Your Financial Worries Quickly
If you’re looking for a reliable loan provider in the country, you can count on Loan Advisor. It is a loan comparison site that provides you with the best information and reviews about the best lenders you can trust. Look through our website today and secure your loan now!