When it comes to loans, many Singaporeans feel comfortable going to the bank and for sure those traditional lending institutions are the most secure to borrow with. Additionally, they are highly regulated to ensure that loan products are fairly priced without exploiting the borrower.

However, accessing a loan facility from these institutions isn’t a walk in the park. There is a lot of bureaucracy in the process. Although the approval rates could be high, having a successful application is a tall order.

They are very keen on your credit score, and a poor credit score automatically disqualifies you from taking a loan with them.

In this light, anybody with a bad credit score will look for an alternative Money lender Clementi near them. Licensed moneylenders in Singapore are a bit flexible and offer financial assistance to most Singaporeans who’ve been turned away by the banks.

The unfortunate thing is that you may fall into the hands of illegal moneylenders if you are not careful.

How do you differentiate between an Illegal and Legal Money Lender?

Physical Address

The law requires that all licensed money lender Clementi have a physical location where they can be traced. Therefore, if you find a lender with no physical address operating purely online, then that should automatically tell you they are operating illegally.

Transparency

All licensed moneylenders are required to explain to the borrower the terms and conditions of the loan in clear terms. They are also required by law to provide a contract document stating all the loan terms and conditions. This includes the loan amount, loan tenure, and interest rate.

On the other hand, unlicensed money lenders include ambiguous statements in the contract that confuses the borrower. Further, they provide blank documents for signing that do not stipulate the loan terms. That is not enough, they’ll send you files through SMS.

Interest Rates

As required by MinLaw licensed moneylender Clementi can only charge up to 4% per month for their loans. For late payment, they can only charge a 4% late payment fee.

Unlicensed money lenders charge interest rates that are way above the capping of 4%. They’ll also charge a late repayment fee that is above 4%.

Advertisement

Effective 1st November 2011, under the advertising rules, licensed money lenders in Singapore are only permitted to advertise through 3 channels

  • Business or consumer directories
  • The website belonging to the licensed moneylender
  • Advertisement in or outside the business premises

Any lender advertising using other channels other than the one mentioned above is an illegal lender and should be avoided at all costs.

Illegal lenders will advertise through flyers, text messages, emails, and other media platforms.

Loan Amount

Licensed money lenders give loans based on the creditworthiness of the borrower. This will depend on the annual income.

There is no limit to the amount you can borrow from the unlicensed moneylender. You can borrow as much as you want although it comes with its own problems such as hidden charges.

With the above knowledge, you can be able to identify a legal Money lender clementi near you.