Beware Of These 6 Payday Loan Scams In Singapore

Many Singaporeans find themselves seeking to borrow some money from at certain times t in their lives. The cash may be for financing a car or home, medical emergency or even for furthering your education. It is at this point that taking out a personal loan comes in handy. However, this is not always the case for some people, since they do not have access to this possibility because of a poor credit score.

It so happens that on some occasions, some individuals are desperate to find some urgent money and are not able to do this through legal money lending institutions that usually have very stringent regulations. They instead end up borrowing from other sources. Even under such circumstances before you choose to take out a loan from alternative sources, there are a few loan types that you need to be wary of. Knowing this will help you avoid getting yourself into much bigger debts than before.

A Lot Of Unsolicited Contact

In most occasions, these types of lenders will often send numerous emails and even make calls to you every once in a while. On the other hand, the legal moneylenders never turn to such attempts as a way for them to source for possible customers. This is because the legal moneylenders don’t want to bother you without cause. It is therefore advisable that you disregard these spams or even report these types of lenders to the appropriate authorities.

Predatory Lenders – Loan Sharks

It is suggested that you be aware of this group of moneylenders, normally identified as “Ah Long” to Singaporeans. In many instances, loan sharks use deceptive, unfair, or fraudulent practices to lure borrowers who are desperately in need of quick cash. It so happens that loans sharks often target individuals who are not qualified to access loans from the legal sources which include banks. These individuals are not able to access loans because of their bad credit score.

As a way of finding a way to get in touch with potential borrowers, loan sharks usually use advertisements. They often will advertise insistently using ads on online platforms and even on public transport. The loan sharks normally try being friendly to you during your first meeting. However as soon as you agree to borrow from them, they drastically change their behaviour. From then on, they start harassing you demanding the repayment. And because loan sharks don’t adhere to the law, they many will end up charging you very high-interest rates that might leave you in even bigger debts in the end. The best suggestion at this point is that you do not deal with them.

Asking for Upfront Fees

Normally upfront fee scams will require that you give an upfront application payment before you can be issued a loan. These types of lenders will rationalize the fees by insinuating that it’s a compulsory processing fee charged on all their borrowers. They may even categorize it as security required because of your bad credit. After that, they will go ahead and ask you to provide them with your account details or even ask that you transfer funds online to them and in return, they promise to give you the loan.

As soon as you make the transfer, this lender will run off with your cash. Therefore, do not be surprised when they cut off the whole contact with you thus they don’t answer to your responses. Do keep this in mind – legal moneylenders do not ask borrowers for payments before giving you a loan.

Online Guarantees On Personal Loans

These types of loans are also called as the bad credit loans. These loans are normally intended as a short-term type of loans. And they are very convenient to access, which makes them rather attractive to most people in Singapore. Beware of any guarantees that give you a loan prior to evaluating your credit score, income, or other personal details as they possibly could be a scam. Also be cautious since some online companies are just trying to get access to your private information for dishonest purposes. To help you identify those companies that are legitimate, you probably need to keep in mind some of the basic signs:

  • The lenders need to have a customer service line
  • They should also have physical address for their business
  • There needs to be a physical store in addition to their online platform

The easiest way to make certain that you are working with a legal lending company is that you do your research. This way you will be able to find out additional information regarding the lending company from dependable sources.

Scare Tactics

The intimidation and harassment might come before you get the loan, and once after you have borrowed from these types of moneylenders. Licensed moneylenders will never pressurize you into taking their offer since they understand that it’s eventually a decision that only you can make.

Even after you’ve received the loan, these types of lenders may even resort to intimidating you by mentioning your relative’s names, whom they could harm should you fail to repay the loan. They might also threaten you with taking legal action against you for unpaid loans. These kinds of moneylenders are generally bold and often take advantage borrowers by creating fear in them using their scare strategies, which makes most borrowers vulnerable thus easy to exploit.

Phony “Legal” Moneylenders

These alleged “licensed” moneylenders pretend to be legal parties through the use of legitimate registration numbers given by the Singaporean Monetary Authority (MAS). They also post advertisements by using the legal business names of other lending companies. They usually will appear to you by means of random emails as well as social media posts.

For these reasons, before you opt to borrow from such moneylenders, make sure you validate the company details to confirm that they are truly who they say they are (you could use hotline and website). In general, the actual companies are hardly aware of these imposters who go around scamming potential borrowers.

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