When it comes to loans, it’s understandable that many Singaporeans will choose to work with banks. Truthfully, these traditional financial institutions offer the best rates. Additionally, their activities receive heavy regulation, ensuring fairness with every single financial product.
However, bank minimum personal loan amounts can be relatively high. To apply for a loan successfully, you’ll need to have good credit scores too. In this light, anybody with bad credit scores and financial history is unlikely to get loan application approval.
On the other hand, licensed moneylenders can help you with the financing you need. They offer better rates and bridge the gap between those who find bank minimum loan amounts too high.
How Do You Know You’re Working With a Licensed Moneylender?
Singapore’s moneylenders have a notorious past. Criminal gangs back these lenders, which allow them to manipulate, harass, and enslave Singaporeans who can’t comply with their unfair and always-changing terms and conditions.
The Ministry of Law took action to minimize the threat of criminal influences on small-time lenders. It created the Registry of Moneylenders, which lists legitimate, licensed, and genuinely compassionate moneylenders.
1. Appears in the Registry of Moneylenders
Licensed moneylenders appear on the Registry of Moneylenders. For example, Bugis Credit has been part of the list for more than a decade. If your prospective moneylender does not appear in the list, they’re most likely a loan shark.
2. Presents Their License Number
Checking your potential licensed moneylender’s website is the best way to know if they’re legitimate. Most will display their Registry license number, which you can reference when looking through the list.
3. Does Not Reach Out To You
Licensed moneylenders cannot coerce or blatantly advertise their services. The Ministry of Law permits them to advertise only through their physical branches and dedicated websites. They cannot call, SMS, or chat potential customers to generate leads. If you’ve received an offer from a moneylender, assume that they’re illicit lenders on the prowl.
Is The Loan Process For Licensed Moneylenders Similar to Banks?
Indeed, it is. You’ll need to follow the following.
1. Set The Loan Amount
During this process, consider your income and expenses. If your expenses eat up more than 40% of your income, it’s best to get a loan that will not contribute to the ratio. Better yet, reconsider applying for a loan until you find an alternative source of income.
2. Submission of Required Documents
Most of the moneylenders ask for the following requirements:
- Billing statements and other proof of residence
- Employment certificate
- Latest 3 months payslip
- Work permit/S-Pass/E-Pass (for foreign borrowers)
- Passport (for foreigners)
- Bank account statement (for foreigners)
3. Read All The Terms and Conditions
Before you submit your loan application, read the fine print in full detail. All licensed moneylenders have fair and friendly terms and conditions, and it doesn’t hurt to be sure.
4. Moving Forward With Your Application
You can receive a loan application decision and loan release on the same day if you submit all your application requirements.
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