A licensed moneylender will never ask you to pay upfront fees for loan approval. They also can’t charge you more than 4% interest per month for late payments.
They must also explain all of the terms of their loans in simple language. This is in accordance with the law. They should also provide you with a copy of the loan contract.
If you’re thinking of borrowing from a licensed money lender, it is important to understand the rules and regulations before making your decision. Licensed money lenders must comply with the Registrar of Moneylenders’ guidelines. These rules protect the rights of borrowers and help them avoid being exploited by unlicensed moneylenders or loan sharks.
Licensed moneylenders are prevented from overcharging their customers by setting thresholds for their interest rates and fees. Moreover, they are prohibited from charging late fees and admin fees that exceed the principal of the loan.
It is also important to note that moneylenders cannot solicit loans through text messages, WhatsApp, email, direct phone calls or flyers. This is because they are required to conduct a face-to-face verification with the borrower before disbursing a loan. There are several ways to identify a moneylender that complies with the rules, including checking their website and social media accounts. In addition, you should check whether the moneylender is registered with the Registrar of Moneylenders.
A money lender’s reputation is an important factor to consider. It is a good idea to read customer reviews and compare different lenders’ charges before choosing one. You should also avoid dealing with a money lender that uses aggressive language or spams your phone or email. This is considered harassment and you can report them to the registry of moneylenders.
Licensed moneylenders should be transparent about their fees and terms of repayment. They should have a website and a physical address that is open to the public. If you are not sure if a moneylender is licensed, you can check the registry of moneylenders, which provides a monthly list. You should also look for a license number and business name on their website. It is essential to deal with a licensed moneylender that has a good reputation. Otherwise, you might find yourself in unnecessary trouble, including legal disagreements that could have been avoided. It is also crucial to work out a financial plan to pay off your loan.
In Singapore, the Ministry of Law has set precise regulations that licensed money lenders must follow. These include interest rates that are capped at 4%. However, the total charges imposed by licensed moneylenders for personal loans may not exceed 10% of the loan principal. This includes the upfront fee, late interest rate, and administrative fees. It is important to shop around and compare fees before choosing a moneylender.
In addition, a licensed money lender must also be transparent about its fees. It must explain the terms of a loan to you in a language that you understand and give you a copy of the loan contract. It is a good idea to read the terms and conditions carefully before signing.
Another tip for finding a moneylender is to avoid those who charge unreasonable late fees and penalties. Lastly, ensure that the moneylender issues you with a receipt after each payment. You should also keep all statements of accounts and payment receipts as documentation.
Money lender interest rates are often higher than those of banks, but it’s important to shop around and choose a licensed moneylender with a reputation for good customer service. Some lenders also offer customised loan packages that suit specific needs. For example, real estate agents can benefit from an income advance to tide them over while waiting for their commissions to come in. It’s also a good idea to automate your payments to avoid missing any repayments.
In Singapore, the maximum interest rate that a moneylender can charge is 4% per month, regardless of your credit score or loan amount. However, the late payment fee cannot exceed 4% of the original principal. It’s important to understand how moneylenders calculate their interest before you borrow. This way, you can avoid paying extra fees that could make your debt spiral out of control. Also, consider asking for a one-time administrative fee that’s capped at 10% of the loan principal.moneylender sg