If you are short on funds and need money on an emergency basis, a quick-approved personal loan is an excellent way to cover expenses such as home renovation, paying off medical bills, or paying for higher education. Getting a personal loan from a licensed money lender Singapore would be the way to go.
Both licensed and unlicensed moneylenders are present in the market; thus, you should be careful who you are taking money from. There are also other conditions like interest rate, fees, and application process that you should consider before applying for a loan.
The article will help you identify the best moneylender in Singapore according to your loan requirement.
How to Find the Best Licensed Moneylender for Personal Loans?
Borrow from a licensed moneylender only if you can fully abide by the contract. Thus while choosing a lender, ensure the terms are favorable considering your financial condition.
Listed on Registry of Moneylenders
There are 150+ licensed moneylenders in Singapore. However, at the same time, increasing reports have been received of scammers parading around as licensed moneylenders, deceiving people into taking loans from them.
When shopping around for moneylenders, you should verify if they are registered as valid moneylenders in the Republic of Singapore. The Ministry of Law regularly updates this list, and one can access the same on the site.
Interest Rates Offered
According to law, the maximum interest rate that a moneylender can charge you is 4%. If the lender is charging a higher interest rate, it is best to steer clear of such vendors. The maximum limit of interest rate applies regardless of whether you are taking a secured or unsecured loan.
Even if you fail to repay the loan on time, the maximum late interest rate is capped at 4% for every month that you pay late. Also, the lender will charge the late interest rate only on the amount that is paid late.
For example, you borrow $5,000 and fail to pay the first installment of $1,000; then the lender will charge the late interest rate of 4% only to $1,000 and not the remaining $4,000.
Fees Charged by Moneylenders
Licensed moneylenders in Singapore might charge you additional fees to cover administrative services. You should be aware that as per law, they can only charge three types of fees:
- Late repayment fee each month, not exceeding $60
- When a loan is granted, the additional fee cannot exceed 10% of the principal amount
- If the moneylender makes a successful claim for the recovery of the loan, then legal costs as advised by the court
Verify if Moneylender Advertisements Follow Rules
You may have received a text on your phone, or a message on your social media account by a moneylender. There have also been cases wherein scammers created fake websites and social media pages impersonating licensed moneylenders. They have asked to transfer ‘administrative fees’ for quick disbursal of loans.
Licensed moneylenders cannot solicit for loans through advertisement mediums such as text messages, WhatsApp, phone calls, or social media platforms.
Loan Requirements
Several moneylenders will offer you a loan based on your income rather than your credit history. However, traditional financial institutions might turn you away if you do not have a good credit history.
If you fall under this category of borrowers, it will be best to look at lenders who work with customers with a weak financial history. Here, the customer service team will find a way to provide you with the best repayment plan depending on your financial constraints.
Loan Application Process
The moneylender should clearly state the loan terms in easy to understand language. They should not be asking for your SingPass user ID and password, nor should they retain any personal documents with them.
No lender can complete the loan application process online. They need to conduct a face-to-face verification with the borrower in an approved place of business before granting the loan.
Positive Customer Reviews
Reviews are an excellent tool to gain insight into the inner workings of any organization. For example, moneylenders might promote themselves as being the best in the marketplace, but reviews can tell you if their claims stand true.
Look at Google reviews, moneylender review websites, social media, forums, and other groups.
When looking for the best licensed moneylender in Singapore, start with their credentials. First, see if they are registered as a valid moneylender and have been in the business for a long time. Next, take a look at customizable plans offered, interest rates, and fees charged. Lastly, check for customer reviews to understand the quality of service provided.