There are so many stories concerning loan shark harassing borrowers and moneylenders in Singapore. Some loan sharks even present themselves as licensed moneylenders to potential borrowers. Even then, it is important for individuals to seek for reliable licensed moneylenders.
Potential borrowers in Singapore need to ensure they do not fall prey into one of the loan shark traps. There are actually some simple ways for you to ensure you are getting a loan from a credible and accredited lender.
Here are some important pointers that will guide you so as to ensure you are borrowing safely.
Loan Application Process
Reliable and accredited moneylender will have a simple process when processing loan applications. According to the law, a moneylender needs to make clear the terms and jargon used for a loan. This needs to be clear to you, the borrower and easy to understand.
You also need to be extremely careful concerning certain mistrustful behavior as well. This may include:
- The use of offensive language
- Not being issued with a copy of your loan contract
- Being asked to sign incomplete loan agreement or a blank page
- Being asked to present SingPass ID and your password
- Holding of any personal papers (including work permit, driver’s license, and NRIC card)
- Being offered a loan without any checks being done, such as over SMS, approving online, over the phone, or email
You need to note that a Credit Bureau (MLCB) for Moneylenders exists. This bureau keeps information on borrowers’ loans and their repayments record with the licensed moneylenders. This is intended to assist moneylenders to assess a borrower’s creditworthiness. You can also request a copy of your credit record from them as well.
Confirm Their License
Singapore has by now 170 certified moneylenders and each is registered with the Law Ministry. Do not accept to take out cash loans from any moneylender who is not on this list.
There are set limits as to how much ready cash loan a licensed moneylender can offer to a potential borrower. For unsecured loans- those without security- you can take:-
- Equivalent of $3,000 when your yearly pay is below $20,000,
- Equivalent of 2 month’s pay if your yearly wages is above $20,000 but below $30,000,
- Equivalent of 4 months’ pay when your yearly wages is below or over $30,000 but less than $120,000;
- Any loan amount, when your yearly pay is $120,000 and above.
When you realize that the moneylender you are dealing with is ready to offer you a loan above the authorized guideline. then just know something isn’t right. Do not take out a loan from such a lender.
Licensed moneylenders are also expected to follow the interest rates limits. This is in addition to the set loan limits. Effective 1 October 2015, moneylenders are to charge a maximum of 4% a month in interest rates. When a borrower fails to pay their loan installments in time, the moneylender is permitted to charge a fee. This late interest fee is charged monthly for every month the repayment is made late. And it is capped at 4% a month.
The late interest amount only applies to the loan amount that a borrower has not yet repaid. For example, if you took a loan of $5,000 and you have already paid $3,000 in good time, the licensed moneylender will only charge the late interest fee on the outstanding $2,000.
Other fees that licensed moneylenders are can charge are given below:
- A fee not more than $60 for every month a borrower makes late repayment;
- A fee not more than 10% of the principal amount granted; and
- Court ordered legal costs for the recovery of the loan and successful claim for the moneylender.
Statement of Accounts
Once you have received your loan, it is advisable to ensure that the licensed moneylender delivers the correct amount you’ve borrowed. Bear in mind that in having a loan agreement shows that both the moneylender and you are bound by the said contract. Therefore, they need to follow its terms and deliver what was promised too.
When it’s time for you to reimburse the loan, you have to ensure that the accredited moneylender gives you a receipt. The receipt should have the correct date, show the correct cash amount that you have paid, your name, a signature and the moneylender’s stamp. You also need to get a semi-annual statement of account. Of importance is that you retain all these documents and statements as proof of all the payments you will have made.
When you encounter any mistrustful behavior or when a moneylender does not adhere to the stipulated guidelines set by the Ministry of Law. You need to get in touch with the Registry on 1800-2255-529 or you can email them at OneMinLaw@mlaw.gov.sg. You can be guaranteed that the Singaporean registry will not reveal your identity. This they can only do without your consent. Nonetheless, they will require that you go to an interview session. It is a good idea to attend as you then collect the relevant information. This will also facilitate the carrying out of a thorough investigation.
It is not advisable for you to take out loans from unlicensed lenders. This will be risking you and your kins lives. And in specific, consider their loan shark methods of debt collection.
Every Tom, Dick, and Harry think they know something about something today. This is all good and fine if you’re debating the Yankees season or how to get rid of a rat problem, but not when it comes to your finances. Whether you are looking for advice on personal or business finances, you should always approach or use only legitimate sources. Your drunk friend at the bar or the psychic at the carnival do not qualify.
If you want advice, go to these places:
Banks and their consultants are trained, qualified, and know what they’re talking about. They will be able to give you good advice on financial management, business start-up, debt counselling, saving, investments, etc.
Registered Financial Service Providers
Registered financial providers are usually legitimate organisations or individuals who can help people with loans or other monetary solutions. Before you approach one of these organisations, do your homework and find out if they have a good reputation.
By accredited, we mean that the writers have some legitimate knowledge and experience within the finance field. They should be open about their qualifications and you can check their credentials online. There are many finance blogs that are very helpful and legit; you just need to find them.
Friends or Family
If you have a loved one who works in the financial world, ask them for advice. They may not necessarily be able to help with your specific problem, but they will have good contacts. They will be able to put you in contact with the right people who can help you.
Any other place that is not on this list may be very detrimental to your financial health. You don’t want to play around when it comes to your finances, so, stick to the legit sources.
If you are looking to start your own business, we have a few simple tips to share. Starting a business today is much easier than it was ten or twenty years ago. The finance side of things still ticks pretty much the same, but the things surrounding the finances have become a lot easier. So, have a look at our very simple and easy to follow advice.
- Do a lean start-up – Today, you don’t need a huge capital saved up to start your business. You can simply start small and build as the business builds. You can start with a few people who perform functions that are central to your business operations. All your advertising and marketing can be done online for a fraction of the cost of traditional advertising. There are so many ways to get the word out and get people to know about you, that you will be on the map in no time. You don’t need a big office space or a full staff to get started.
- Outsource – If you are in need of a specialist for a short time, don’t hire someone on a permanent basis. Rather outsource that position to someone who can work with you on a consultation basis. These consultants often have years of experience with a company and started their own business when they felt the time was right. They also work with many different clients and types of businesses and will have unique insight into business finance and related fields.
- Hire a professional – To get things started, consider hiring a professional to handle your finances and get you on the right track. A professional financial advisor or manager will have a lot of knowledge and experience that you may not have. It will be worth the cost to get things started on the right foot.
These are quick and common sense points, but they are important. If we had to add one more thing, it would be to stay on top of your finances always. Be involved and know what is going on even if someone else is managing the finances. Follow these tips and you should be heading for a good start.
Have your finances spiralled out of control? Not sure where all your money is going but there’s nothing left? We can help. We have some good tips to help you get back in control of your financial situation. Money is a funny thing and most of us don’t always know how to handle it the right way. So, whether you earn $100 a month or $100 000 a month, you need to be smart with your money.
When things get out of control, do the following:
Stop and breathe – You will get nowhere if you get frantic and panic. You need to gather yourself and take action. Get a friend or your partner to help you with these tips.
Gather your records – You basically have to investigate your own spending habits. So, gather your bank records, purchase slips, and any other records that may be relevant. Study them and find out where your money is going and where you need to make changes.
Identify problem-behavior and change it – Find the areas where you are spending too much or where things got out of control. If you are buying too many unnecessary things, you need to get a plan together to cut back. If you have a gambling problem, you need to get help. Identify the problems and make a plan.
Make a plan to adjust your behavior – There are many ways to cut back or curb expenses. You start with cutting out anything you only buy because you want it or because you can. If it is not something you need to survive and live, you need to cut it out. You may need some help to break bad habits, so ask your loved ones to help you stay on track.
Get professional advice – If things are dire and you don’t see a way out, you need to consult with professional financial advisors. They will be able to give you the right advice and put in place plans and actions to get you back on track.
It can happen very quickly or it can happen over time, but a financial pitfall happens to many people everyday. You need to be smart with your money and get advice and help when you see that things are going south.