Before you borrow from a money lender, it is important to consider various factors to avoid getting into trouble with unlicensed moneylenders and know what you are expected to do.
Most people in Singapore take loans without proper knowledge of the fundamentals and consequences that may come after.
This article is meant to answer the frequently asked questions about licensed moneylender in Singapore, the best moneylender, and give you a vast understanding of what you are required to do.
With an in-depth elaboration, this guide will answer seven questions that most citizens face dealing with a licensed moneylender before taking a loan.
For those living in Singapore, you can find help during financial support whenever the need arises. This might be helpful in times of emergencies by helping you acquire quick cash to settle your bills or take care of the issue at hand.
There are various lenders authorized by the government of Singapore to offer such services. They offer both citizens and foreigners residing in Singapore full access to their services based on various factors which will be discussed in this article.
With that said, let’s dive into the questions and continue reading if you have been looking for a licensed lender.
1. What is Money Lending?
Money lending refers to the act of giving out money at interest to either an individual or a group of people. A legal lender is referred to as a licensed moneylender and is governed by the law on how they conduct their activities.
To get the loan, borrowers apply and this might vary depending on the moneylender and their mode of application.
In Singapore, a moneylender is governed under the Money Lenders Act (Chapter 188) by the Registry of moneylenders in the ministry of law which restricts licensed lenders to the amount of money they can lend and the interest they can charge to both citizens and foreigners.
Access to such services is beneficial since borrowers get the chance to access cash easily and in a short time span to help them during financial difficulties.
These services have made it easier for people to get cash as opposed to the traditional banking procedures which entail a long process that might lead to delays when it comes to cash acquisition.
2. How can moneylenders help you?
Licensed moneylenders provide cash at flexible payment plans and low interest to help people during financial difficulties.
This is helpful to anyone in urgent need of cash without enough savings to handle it. When someone is in such need, you can quickly reach out to the lenders and apply for a specific amount you want to borrow.
After this, the lenders will go through your details and process your application as soon as possible.
They offer personal loans which are notable for their versatility ranging from offsetting the past and planning the future inclusive of:
Medical Bills: In cases of emergency like medical bills, a personal loan comes handy and will be efficient to help you settle them in advance and prevent it from accruing.
Home renovation: It reaches a time we all need to make necessary adjustments to our homes. Moneylenders cash help that is reasonable and prudent to facilitate such expenses especially when someone doesn’t have the ready cas
Paying student loans: In the case where one needs to settle them, a personal loan from money lenders Singapore will play a major part because they are easy to access and don’t require a lot of procedures to obtain.
Repaying family or friends: If you owe your friends or family members a specific amount which they need urgently, you can get a loan from moneylenders to repay them and avoid inconveniences to keep your relationship and friendship.
Wedding costs: Facilitating your dream wedding can be wildly expensive and if you don’t have savings it might be nearly impossible to have one. To seek this out, you can get a loan from moneylenders at low interest then cover all your wedding expenses
Purchase necessary consumer goods: With an endless list of consumer goods like laptop and house appliances, at some point, we all run out of cash to make such purchases.
Therefore, in such scenarios, you can get a personal loan and buy whenever you urgently need them.
Start or fund a small Business: For those with a Pte ltd, it is possible to use loans to boost Pte Ltd.
To do this, all you need is to apply and provide the documents for the Pte ltd to any Singapore money lending that is registered and governed by the law so as to be on the safer side.
This will help you as a business person get the required capital easily and avoid harsh treatments from the lenders during delays when it comes to repayment.
3. What should you consider before taking up a loan?
Must be diligent in choosing a licensed money lender in Singapore and not a loan shark or “Ah Long”
It is important to know who you are taking it from. An Unlicensed moneylender also referred to as “Ah Long” is known for high rates and harassing tactics while licensed moneylenders are restricted to the amount they can lend and the rates they charge.
The loanable amount refers to the amount given to a borrower. Therefore, it is important to consider it before taking any loan from the moneylenders.
This will enable you to keep track of the loan amount, principal loan amount, and how to plan your payment and give you a humble time to pay.
Before taking a loan, you need to pay attention to the current interest rate since these will play a major role in determining the amount that you will pay back.
To be on a safer side, just be sure there are no hidden fees included in the rate, such as:
- Origination fees
- Appraisal fees
- Underwriting fees
- Administration fees
- Credit report fees
Such fees don’t play a major role in increasing your interest rate, but they will be included in your payment plan thus a very important aspect to note.
The repayment plan or tenure
It is crucial to understand your repayment plan before taking a loan since this will help you avoid misunderstandings with the moneylender.
To manage this, work out the total cost of the credit, you are taking out, including the interest payment and how much you can afford to pay every month then choose the best plan based on your capabilities.
4. List of licensed moneylenders in Singapore
Licensed moneylenders refer to individuals allowed by the government to offer loans to the general public and their activities are regulated by the registry of moneylenders in the ministry of law.
They are quite different when compared to the “sharks” but most people tend to confuse or ignore till it’s too late.
Here are some of the key characteristics you can use to recognize illegal moneylenders or “Loan Sharks” from the licensed money lenders.
They care less
As unlicensed moneylenders are already illegal, they do not care about breaking the law when trying to recover their debts. Therefore, they use any means to make sure that they get their cash back.
Unlike the licensed moneylenders, loan sharks charge a high-interest rate based on their terms. Their activities are not regulated by the government hence play by their own rules which are not favorable to many people.
Illegal money lenders use questionable advertising to attract prospects into taking quick loans from them. For example, they send pushy texts about their loan services and how to access them.
Without someone’s consent, they tend to spam individuals with various messages to try and lure them to their services.
This is considered as bothering, a tactic that licensed moneylenders are not allowed to use by the law.
Here is a list of money lenders in Singapore who are licensed and recognized by the registry of
moneylenders: LIST OF VALID MONEYLENDERS
5. How much can you borrow from a licensed money lender?
Licensed money lenders tend to offer only small loans. This is because they are typically small businesses compared to banks and they cannot afford to lose millions of shillings in case a borrower defaults to pay.
However, they are capable of offering both secured and unsecured loans which are pegged to your collateral and credibility score respectively.
Secured Loan vs Unsecured Loan.
Secured loan refers to a loan in which the borrower pledges some assets as collateral before the acquisition of the loan whereas an unsecured loan is a loan that is issued based on the borrower’s creditworthiness and the ability to repay.
For secured loans, one is not limited to the amount they can obtain whereas for an unsecured loan is limited.
Below is a table elaborating the total maximum amount that you can borrow at any time across all licensed moneylenders in Singapore for citizens, permanent residents, and foreigners residing in Singapore.
|Borrowers’ Annual Income||Singapore Citizen and Permanent Resident||Foreigners residing in Singapore|
|Less than $10,000||$3000||$500|
|At least $10,000 and less than $20,000||$3000||$3000|
|At least $20,000||6 times monthly income||6 times monthly income|
6. What are interest rates moneylenders can charge?
According to the (Money Lenders Act) provided by the Ministry of Law, with effect from 1st October 2015 moneylenders were allowed to charge interest of up to a maximum of 4% per month on personal loans.
This applies regardless of the borrowers’ income and whether the loan is unsecured or secured and if the borrower fails to pay on time, the maximum interest the licensed money lender can charge is 4% per month of each month the loan is repaid late.
The computation of the interest charged on the loan must be based on the amount of principal remaining after deducting from the original principal that the total payments by or on behalf of the borrower which is appropriated to the principal.
If Y takes a loan of $10,000 and Y has paid $4,000, only the remaining $ 6,000 can be taken to calculate the interest.
The late interest can only be charged on an amount that is repaid late. The moneylender in Singapcannot charge on amounts that are outstanding but still unpaid.
If Y takes a loan of $10,000 and fails to pay the first installment of $2000, the moneylender may charge the late interest on $2,000 but not on the remaining $8,000 because it is not due yet.
7. Eligibility and Requirements for taking up a loan
In Singapore, to qualify for a loan you must show documents that validate the following:
- Be 21 years old and above
- Show proof of employment
- No income restrictions
To those who qualify and you are looking for a loan application, don’t hesitate to visit A1 Credit, a licensed money lender where you can borrow legally and safely.
Why Borrow from A1 Credit?
A1 Credit is one of the best moneylenders in Singapore. It is a licensed moneylender with dependable legal money lenders with an experienced team of loan officers providing solutions to their clients.