Remember These 4 Facts When Looking For a Money Lender In Singapore
With so many incidents of loanshark harassment, even with the licensed money lenders in Singapore; it has become essential for the legitimate borrowers to look out for the loanshark traps and to make sure that they do not fall prey to them. In fact, there are some really simple ways to ensure that you are borrowing loan from credible and licensed sources. Here we have jolted down some pointers to help you stay safe while borrowing cash in Singapore.
1. Check the credibility of their license
There are 170 licensed moneylenders who are verified and registered by Ministry of Law in Singapore. The list of these moneylenders is available on the official website of the Ministry. So, make sure not to borrow cash from any of the money lenders who are not on the list.
2. Application Process for loan
A licensed Money lender should offer smooth processing of loan applications. Law requires these moneylenders to explain official Jargons to the borrowers by communicating clearly. You should also get a copy of loan contract with the re-payment schedule, interest charges and miscellaneous charges.
You should specially look for these tell tale signs of illegitimate lenders:
- Use of abusive language or talking in a disrespectful tone.
- Refusing to provide you a copy of contract
- Asking you to sign an incomplete or blank contract
- Taking and retaining your personal documents
- Giving you loan without a cheque and approving over sms or phone.
3. Limit of loan
There are certain limits for the amount of loan a moneylender can lend to a borrower.
- If your salary is less than $20,000, you can get a loan up to $3000
- Loan equivalent to 2 months salary, if your salary is more than $20,000 but less than $30,000
- Loan equivalent to 3 months salary if your salary is more than $30,000 but less than $120,000
- Any amount of loan can be borrowed if your annual income amounts to $120,000 or more.
If a money lender is willing to lend more than the legal amounts then that is suspicious. Do not borrow money from them.
4. Legal loan limits
Apart from the Loan limits, legal money lenders ought to abide by the rules of fixed interest rates. According to a law which came into effect on 1 October 2015, money lenders in Singapore cannot charge interest rates of more than 4% per month. However, if the borrower fails to pay loan on time; the lender is allowed to charge 4% late fee interest per month. If the lender charges more than these rates; do not borrow from him.
To conclude everything, I must advise all the borrowers to do some research before borrowing money from money lenders in Singapore. Make sure they communicate everything clearly and do not leave the matters for later. Be well aware of the legal restrictions and rules for borrowing or lending money in Singapore.
© 2017 WriterAimz