Licensed Money Lenders in Singapore
Benefits of Getting a Loan from Moneylenders
Chances are you’re applying for a loan from a money lender in Singapore. But if you’re a first timer not knowing how to get started, you should keep reading to address concerns and questions surrounding it.
The following are only a few benefits of getting a loan from a money lender in Singapore.
- The funds to get from a licensed moneylender will help you pay for medical expenses or any other emergency expense that requires immediate funding.
- The application process is clear and straightforward. When applying, you need to submit a few documents, including a photocopy of your ID, a recent pay slip and some personal details. You also don’t have to undergo credit score reviews and lengthy background checks before being approved if you qualify.
- You can also apply for a loan online, so you don’t have to walk or drive all the way to their office and spend hours in long lines. Just visit their website, fill in needed details, and wait for the feedback whether or not you qualify for the loan. Then, you need to submit the required documents so that the lender can check your income and qualifications for the loan.
- Even low-income individuals can also apply for a loan versus banks that are more likely than not to grant a loan only to high-income loan applicants. You can apply even if your income is less than $10,000 annually.
- Applying from a licensed money lender, you’ll be aware of the max loan amount, payment schedule and interest rates. In this case, you don’t have to guess on the loan you can get or the interest rate to pay on top of the principal loaned amount. In addition, you’ll be notified on how much you can qualify for in advance based on your income level.
- Faster approval time versus in banks is another benefit of getting a loan from a moneylender. Especially if you’re short of time waiting for your next salary, but you need to settle an immediate financial need, such as a medical expense, you can rely on money lenders that offer a faster approval time.
- You can also visit a physical office to sign the contract. Having an office to visit also gives you peace of mind that you have people to talk to whenever you have concerns or questions. More so, legal lenders also have a landline number to contact during business hours for loan matters. Remember that only registered moneylenders have a physical office and a telephone number. Stay away from those texting or calling you from a mobile number to convince you to borrow money from them because they’re more likely to be unlicensed that they’re not complying with the IPTO’s guidelines that states respecting privacy.
- The loan contract states everything you need to know. It contains details about the loan, payment schedule and interest rate, to name some. It’s also one of the reasons to read, review and understand every detail in the contract before signing it. If you have questions, you should not hesitate to ask.
Types of Loans Offered by Money Lenders
Next up, let’s talk about the types of loans that moneylenders in Singapore offer so that you can figure out which one suits your situation.
After all, there are specific loan types that apply based on your nationality and purpose. While you might be feeling confused with a number of them available, you’ll be fine provided you know your reasons of applying for a loan.
- Payday loan - This loan can help address financial difficulty around a payday period. So if your utilities and bills are quickly adding up, you might want to apply for this loan to cover those expenses. It might also be for you if your salary is too small that you don’t know how to get through your life until the next payday. Apply for this loan if your next payday is still a few weeks away and you need to settle your bills and utilities or cover for your cost of living allowance.
- Personal loan - You’re a witness to the rising cost of living in Singapore. And for the many struggling to make ends meet or settle a financial emergency like a hospital bill, they apply for a personal loan. It’s also one of the chosen options for individuals looking to invest in the future, such as paying for assets or property.
- Bridging loan - If you’re moving into a bigger home, you know how huge the fund needed will be to do that. As you may know, buying a property in Singapore is both expensive and difficult, but you can make your life easier and make paying for an investment property more manageable with this loan. This short-term and secured loan can also be for you if you’re using the fund to pay for the down payment of a new property while waiting for your old home or flat to sell. Getting a bridging loan is what you also need to pay for the DP of your next home or a commercial property before another one buys it, especially that the real estate market in Singapore is competitive. But remember, bridging loans come with higher interest rates than other loan types have.
- Foreigner loan - If you’re a foreigner living and working in this country, you might qualify for this loan aside from other loan options available for permanent and local residents. So if you need money, proceed to one of the licensed money lenders in Singapore and apply for a structured loan for foreign nationals.
- Debt consolidation - For whatever reason you’re not able to settle debt from previous moneylenders and/or credit card, you might be into a tough situation right now. You might be having difficulty managing your money because you’re still being chased by previous debts. If you’re in this situation, apply for a debt consolidation loan designed to consolidate or combine all the balances of your loans into one. For the sum, you can get a lower interest rate. With it, you can also monitor the total loan amount together with its interest rate and pay only ONE loan. That’s easier than having to pay for multiple loans. Undoubtedly, you might also be able to manage your finances better with a single loan to pay,
By comparing the different types of loans available, you’ll get a better idea on what to apply for and how a specific loan is structured in terms of payment fees, application terms, and payment schedule.
What are the fees and interest rates money lenders can charge?
A moneylender can charge a maximum of 4% interest rate monthly regardless of the loan type and the borrower’s income. For late loan repayment, the interest rate is 4% monthly for each month.
For the fees, money lenders are allowed to charge
- A fee at most 10% of the loan’s principal amount when the loan is approved
- A fee at most $60 monthly of late loan repayment
- Court-ordered legal costs if the moneylender has successfully recovered the loan
How Much Can You Borrow From Moneylenders?
You can apply for and obtain any loan amount for a secured loan, but not for unsecured loans. The potential total loan amount you can borrow from Singapore money lenders are the following.
- If your annual income is less than $10,000 and you're a Singaporean/permanent resident, you can borrow up to $3,000. The same max loan amount applies if your income is at least $10,000 but less than $20,000.
- If you're a Singaporean/permanent resident with an annual income of at least $20,000, you can borrow up to 6X your monthly income.
If you're a foreigner living and working in Singapore,
- Loan amount: $1.500 for an annual income of less than $10,000
- Loan amount: $3.000 for an annual income of at least $10,000 but less than $20,000
- Loan amount: Up to six times monthly for an annual income of at least $20,000
Things to consider before getting a loan from moneylenders
Start preparing for the loan application once you’re able to narrow down your choices and shortlisted at least three money lenders to compare. However, you should take note of some things to consider before getting started.
Check for their license
No one wants to be trapped in a scam especially when in a tight financial problem. Stay away from moneylenders that don’t have a license and that offer too-good-to-be-true loans. Typically, unlicensed money lenders find clients through emails, phone calls, SMS and flyers - a few advertising and marketing techniques prohibited by the law. You should be able to find reliable moneylenders in directories, in a physical office, or on their website. One of the best ways to ensure you’re dealing with a licensed money lender in Singapore is to look for their license. You may also want to visit the website of The Singapore Ministry of Law that keeps its list of licensed moneylenders updated.
See that the loan details and those advertised are the same
Again, it is so important to read, review and understand the agreement before signing it. And if you have questions, you should not think twice but ask. You deserve an explanation. After all, money lenders are required to explain the entire loan contract to the borrower. You should check the contract details and all the terms and conditions attached to it. In addition, you must double-check details about repayment schedule, late payment terms, and interest rate, among other things. Make sure that these details are the same as what they advertise. Finally, get a copy of the loan agreement.
How do I know whether a moneylender is licensed or not?
It is important that you borrow only from a legal money lender. In this case, you should verify and check the updated list of licensed moneylenders in Singapore.
How to identify reliable or honest moneylenders
Do your homework to find out if you’re dealing with an honest and reliable money lender or not. A few pointers to remember include the following:
They offer loan advice and consultation – FREE
Stay away from firms that are more interested in pushing you to apply for a loan package not suitable for your situation, purpose, and income. Go for a reliable firm that believes in honesty and real service to their clients. A firm like it can give you loan advice to help you decide on the type of loan that matches your business goals or personal needs.
They have a physical office location and a website
Reliable moneylenders have a physical office with staffs that you can speak with whenever you visit it. But aside from a physical address, you might also visit their website to find out more about them, including business hours and other things.
They maintain loan proof and records
As soon as your loan is approved and signed, you will receive the contract’s note copy. An honest money lender will not also keep your original documents and will issue a receipt for every repayment.
They have good post-lending behavior
Honest moneylenders have good post-lending practices, not resorting to unlawful methods of recovering their money in the event of delayed payment. They also won’t use abusive language or other intimidating techniques.
They charge reasonable fees and don’t hide info you need to know
Licensed and honest money lenders charge fixed loan-processing fees, not quoting the highest possible rates. Honest moneylenders in Singapore won’t create additional clauses in the contract without your knowledge. It’s not the case with unreliable, unlicensed ones that charge hidden fees that will take effect once the loan has been approved.
They comply with regulations
Honest money lenders comply with the money lending law, regulations and guidelines of the law ministry. They’re charging only the right processing fee amount and stick with maximum lending limits. These companies also don’t use flyers and other prohibited advertising channels to promote their business.
Follow this guide in getting a loan from a money lender in Singapore and make your life easier. Know the right type of loan that suits you and learns how to compare different moneylenders using the above for your reference. Finally, only get a loan from a legal money lender for your protection and sanity.