Besides obtaining the loan from banks and financial institutions, you can get a personal loan from money lenders. Do not be conned by many unscrupulous agents that claim that they are legitimate because they are mostly loan sharks (or ah longs). Legal money lenders are governed by the law to offer such services where they meet the requirements so that it is easier for their customers.
In most cases, you will engage them when you need a quick loan which does not require a lot of processing time. This type of loans are ideal for those not wanting to involve too much in documentation or procedures. Short-term loans are among the most common form of loans in this context. This is where you will work with a licensed money lender and it is extremely important to engage a party who is reliable, legitimate and accommodating.
Take note that legitimate money lenders are approved by the ministry and their interest rates are regulated. In fact, they are not allowed to charge fees as they like. While there are certain fees involved in processing, you can always check with the Ministry of Law and Moneylender’s Association of Singapore if in doubt.
How to choose the best moneylender
Remember that it is a tedious process in choosing your moneylender. In fact, there are some issues that you need to consider heavily before deciding on anything. This includes the following:
- License – The moneylender you select MUST be licensed. There is no two-ways about this. You should ensure that you are engaging someone who is recognized and accredited by the government which is under the purview of the Ministry of Law. Once you have selected a legitimate registered moneylender, it simply means that they have met the legal requirements as stipulated by the government. This is a good thing because you can always check with the authorities should any disputes arise.
- Terms and Conditions – You need to always refer to the Terms and Conditions in borrowing money. In fact, it should be among the first document to review before signing anything. As the name implies, it is your point of reference every time. This is the document that includes all the crucial information including repayment plan, interest rates and borrowing period, among others. The Terms and Conditions are usually designed to suit your needs and financial repayment ability. So, it is catered only for you and should not be generic. Remember that this document is the contract you signed and MUST be agreed by both parties to be legally binding
- Fees and charges – There is bound to be some form of fees or charges involved when you borrow money even from moneylenders that are registered and legitimate. There is currently no strict regulation on what these fees are like. Hence, each moneylender could have a different fee for their services. This does not mean that you are bound to pay whatever is charged. It is your legal right to know what the service fees are and how much they entail before deciding on anything. The best thing to do here is to make comparisons with other moneylenders before making your final choice
- Significance – when selecting your moneylender, choose one with a good reputation or one with high significance. After all, you will be disclosing your personal and confidential information with them and you need to ensure that you enjoy the relationship. Check out reviews of customers who have worked with these moneylenders and if you need to contact them and learn more about their experience. The reputation works wonders here because that’s probably your first impression before proceeding further.
We offer services that will surely help you in terms of convenience. We offer a directory of all the licensed money lenders in Singapore. this is where you will find a full directory of all the registered money lenders who are regulated by the government. Learn more about who are those that offer packages like personal loans, business loans and such.
Platform for Registered Money Lenders
Besides offering services for those seeking money lenders, we provide the platform for money lenders as well. As long as you are registered with the Ministry of Finance, we have the perfect platform for you to find the best customers. We connect you with the customers in locations of your choice will providing you with the channel to spread more awareness of your products and services.
Applying for loan
At our platform, we offer all the information about loans that are available in the market. Apart from that, our platform is perfect for loan applications as well. All you need to do is to search for the loan provider of your choice and then you are ready to go. From there, you can then search for the coinciding loan package that you are interest in. After that, click on the Apply button and you will then be subsequently connected to the loan application process. Send in your documents via the link and you will then be contacted as to whether your loan application has been successful.
Questions you might ask
Here, you might have many questions like where to find the most reliable source of money lenders and who are the ones that can be counted on. We compile the list to help you go through this with the least concerns and worries. We ensure that you have come to the right place to find out about products and
- For education – If you are looking for a loan to finance your child who is studying, entering to university or to pay your school fees, this is where you can start. From long term to short term loans, check them out here
- Loans for vehicles – whether you are buying a car for your personal use or for commercial purposes, check and see which hire purchase loans are most suitable for you. Learn more about the duration of the loans as well as any other issues involved
- Loans for property – This list gives you all the information you need about financial providers to help finance a house, a shoplot, a commercial property or even a piece of land. As long as it is a real estate product, this is where you can start. Check out what the current base-lending rates are and who provides them
- Loans for businesses – This is the ideal place to start looking for loans if you are planning to start a small business, an entrepreneurial business or your own startup. Find those who can help you start your business with the capital size of your choice and get started immediately.
- Personal loans – You can find a list of personal loans here available for application if you like. For your own personal use, no questions are asked as to why you need the money as long as you pay them back as scheduled
Bank loans in Singapore
This is by far the most straightforward type of debt-financing schemes. Most of the banks in Singapore offer such loan in one way or another like DBS, OCBC and others. In most cases, you need to offer some form of collateral before the loan can be approved and you will have to decide on the total repayment schedule.
This is offered via various banks and financial institutions across Singapore. If you meet the requirements, you are eligible to borrow up to SGD100,000 and you can borrow this amount for reasons like upgrading of equipment or for daily operations. The interest rate is 5.75% minimum for a maximum of 4 years.
Loan Insurance Scheme
The LIS or Loan Insurance Scheme is a scheme that insures the business from risk of default. This is offered to startups by governments on a co-sharing basis and can be applied by firms with both local and oversea operations. The LIS does not come with a maximum loan quantum where the figures are usually determined on a case-by-case basis. Factors like interest rates and loan tenure are determined based on the risk and profile of the borrowed.
Local Enterprise Finance Scheme
The Local Enterprise Finance Scheme or LEFS involves banks and financial firms that offer funds mainly in factory-based businesses. The interest rate is 4.75% minimum and usually not more than 4 years. For the loan tenure of more than 4 years, the interest rate is not less than 5.25%. in fact, companies can apply for up to SGD15,000,000 for reasons like purchasing of business premises, equipment, upgrading of machineries and others.
Important Factors to Consider
Borrowing money is very easy. It is an easy-way-out and a fast solution but the commitment would be quite inconvenient. One thing for sure, no one would want to borrow money if given a choice. Hence, it should not be something that anyone can take advantage of. To this situation, the law helps those that are in such need so that they do not fall into a deeper problem after that. Therefore, you should consider any available options before you approach a moneylender. This is because the government actually has different types of financial assistance schemes that you might find useful.
What does it mean for the borrower?
Once you enter into the agreement with the moneylender, you become legally obliged. This means that you have to fulfill your part of the deal which if you fail to do so, legal action can be taken against you. While the law protects borrowers from being disadvantaged, it protects the moneylender so that their business operations are not affected by unscrupulous borrowers.
Therefore, you must ensure that you are fully comfortable with the terms in the contract as it would have implications on your income and financial situation. It is extremely crucial that you only borrow what you can afford because once you default on the payment, late charges and interests will cause more strain on your financial situation.
Law on moneylending
First, you must always only borrow money from licensed moneylenders. This means that you can check with the Ministry of Law on its registry and then choose your moneylender from there. Then, look for those that are convenient to you which is around your vicinity. Remember that the law stipulates that the moneylender must explain the terms of the loan to you in a language that you can understand. This means that you will:
- Be able to see a copy of the contract and keep it
- Be able to understand all the terms in the contract
- Know for sure what the repayment schedule is like, the interest rates and any fees
- Reject anything if you are not comfortable
In simple words, you only agree and sign only if you are fully aware of every single detail of the contract. You might be in need of urgent cash but that does not mean you can be ‘forced’ to accept any terms you do not agree to. You should not be made to take anything that might disadvantage you just because you are in a desperate situation.
If there is a situation where the moneylender is allowed to lodge a caveat on your property, then you must really consider this properly. If that is allowed, it means that in the situation that you are unable to pay back your loan, then you might have to sell your property. However, the moneylender will have the priority to take any amount you get from selling the property to pay off your loan. Another factor that you must consider is that you should look for a few moneylenders before making the decision. In fact, you should not commit with the first moneylender you speak to. After all, different moneylender will have different terms and interest rates. Only when you are fully comfortable and that you are able to pay back the loan should you agree and sign any contract.
Regulations to the amount you can borrow
There are 2 types of loans available. The most stable ones would be secured loans. You can actually borrow any amount with secured loans as long as the collateral has the value needed. However, for unsecured loans, there is a guideline on how much you can borrow.
- For Singaporeans and Permanent Residents, you can borrow a maximum of SGD3,000 if you are annual income is less than SGD20,000. If your annual income is more than that, you can borrow up to 6 times your monthly income
- For foreigners who are residing in Singapore, if your income is more than SGD20,000, you can borrow up to 6 times your monthly income. However, you can only borrow up to SGD1,500 if your annual income is less than SGD10,000. You can borrow up to SGD3,000 if your annual income is between SGD10,000 and SGD20,000.
Regulations on interest rates
The law stipulates that moneylenders can impose an interest rate of up to 4% per month regardless of the income and on every type of loan. This ensures that the borrower is not at a disadvantage when they go into such contracts. Besides that, there is a cap of 4% late interest as well. Take note that how the interest is charged is based on the amount of the outstanding amount in the principal owed. Meanwhile, if an amount is repaid late, then the late interest can be applied.
What other regulations do you need to know?
Besides those mentioned above, you need to be aware of certain other regulations when it comes to borrowing money. Always remember that you should only borrow money from licensed moneylenders. You can verify this by checking with the Ministry of Law or get the list from https://www.mlaw.gov.sg/content/rom.
Always be cautious when you deal with the moneylenders.
- Do not give out sensitive information like your SingPass ID and password
- Do not deal with those who are threatening or use inappropriate language
- Never let them hold or retain your personal ID documents like your ATM card or your NRIC
- Never sign any loan if you are not sure or if the document is incomplete (or blank)
- Always ensure that all the terms and conditions of the contract is explained in detail. You MUST have a copy of the contract signed by both parties
- Ensure that you are given the full amount that you are borrowing. There should be no amount being withheld by the moneylender.
The main idea here really is that when you borrow money from the licensed moneylenders, you will only give out information that is essential for the process. They will surely need your personal details in order to carry out due diligence and for credit checks (although that is not a mandatory process). However, they should not be keeping any of your documents unless necessary and with relevant notarization made. Once the application process is done, then you should be comfortable enough to get on with your life with the cash disbursed to you in full.
If you come across any of these problems or when you are not happy with any sort of treatment, then you should report them to the Registry of Moneylenders. You must provide important and relevant information about the moneylender to the authorities to ensure that such inappropriate actions can be notified.