Money Lender Singapore: How to Borrow From a Money Lender?
Moneylenders in Singapore are popular, especially when one needs cash urgently.
Therefore, in this post, we’ll cover everything you should know about money lending in Singapore. We will provide tips to enable you to make the right decisions for hassle-free borrowing.
Who is a Money Lender Singapore
A money lender Singapore is a licensed financial institution that offers personal loans to individuals.
Notably, the money lenders in Singapore are usually divided into two classes: the licensed and the unlicensed. Licensed money lenders are safer options to borrow from since they must take care of the borrower’s interest. Importantly, if there is some issue, they are bound by the rule of law to take full responsibility.
On the other hand, unlicensed money lenders are illegal lenders that fall outside regulation and are mainly referred to as loan sharks. Generally, they present a high-risk avenue for taking a loan because they are unregulated.
How to Choose a Licensed Money Lender
Generally, ensure the moneylender you want to borrow from is licensed and operates within the rules and regulations.
Some of the ways that you can use in the selection of a licensed money lender include:
1. Check Whether the Money Lender Name is in the Registry
The money lender registry lists all the licensed money lenders in Singapore. Thus, you can verify any money lender from there.
2. Compare the Interest Rates
Not all money lenders charge the same interest rate. By comparing several different lenders and at what rate they will lend the money, you can choose the moneylender charging the best rate.
3. Check if there are Other Charges
Apart from the usual interest rates, some lenders will have other charges. These charges may come in processing fees or even fines for late repayments. Add these to your total borrowing cost.
4. Read the Loan Agreement Carefully
Before signing, get ample time to go through and understand the terms and conditions of the agreement. This should include reading about interest rates, modes, repayment duration, and late payment fees.
5. Know Your Rights and Protection
You must know your rights when choosing a money lender as a borrower. The following are some of the rights you should be aware of.
- Get a Written Loan Agreement: Money lenders should provide the borrower with a written agreement offering all terms and conditions.
- Flexibility: The money lender should allow the borrower to enjoy flexibility in borrowing and repaying the loan without attracting any penalties.
- Fair Debt Collection Practice: The money lenders should not harass or threaten the borrower to recover loans.
How to Be a Responsible Borrower
Even if you choose a money lender to borrow from, be a responsible borrower. The following are some tips to guide you on responsible borrowing should you need to do so:
- Borrow only what you need. Only borrow a reasonable amount and avoid unnecessary debt buildup.
- Pay on Time: Pay the loan in time to ensure you pay less for fees and interest rates.
- Alternative Finance: You first need to look towards other sources of finance, such as borrowing from family and friends, that may not charge interest rates on the loaned amounts.
- Professional advice for finance: You can take professional financial counseling advice. The respective counselor will prepare an appropriate repayment schedule if a person cannot return the money and accordingly deal with his finances.
Conclusion
While a reputable money lender Singapore can be very reliable, you should always take precautions and responsibility and ensure you don’t get a raw deal.
With full knowledge of the type of moneylender, the regulations governing them, and the rights and protection accorded to the borrowers, you make an informed decision and reduce risks attributed to borrowing.
Finally, only borrow when necessary. Before you resort to borrowing, try all avenues that might lead you to get the finances. Only then can you borrow if all else fails. After all these, you can borrow responsibly without getting into financial trouble.
