Paying one’s bills and keeping expenses to a low is very difficult in recent years because of the changing economy and the rising prices of goods and commodities.

As a result, even if they are making enough money for their usual expenses, they will end up short especially when there is a sudden influx of expenses that is not part of their budget.

As a result, people tend to turn to moneylenders that offer personal loans. While banks also offer personal loans, they are very strict when it comes to those who they approve for loans. They also take a long time to process applications, which can be a problem if you are trying to catch a deadline.

Moneylenders are more relaxed as to whom they accept for personal loans and their application process is swift and easy. They also approve applications faster than banks, making them a preferred lender for many individuals who need quick cash.

However, while moneylenders are ideal for quick cash, borrowers need to be careful because not all moneylenders in the country are trustworthy. Some of them may be operating in the guise of being a legal moneylender; but, their details are false. News about these so-called loan sharks are a plenty in recent years and getting in their clutches can be difficult to escape from if you ended up with them.

So, how can we check if a moneylender is good or bad?

License

Before you go to a moneylender to apply for a loan, it is ideal to check if they are accredited by the government. They must be in the list of the Singaporean Ministry of Law and have valid license numbers that can be double checked with the government.

Fake moneylenders would often steal someone else’s license numbers to look legitimate. It is important that you verify the numbers first and report them to the authorities if they are using another moneylender’s license.

Interest rate

In Singapore, the maximum interest rate moneylenders can charge their clients as of October 1, 2015 is at 4% per month. This rate is the default rate for all loans regardless of what the borrower’s loan is and how much income they have. If they are late in their repayments, the interest rate applied for late repayments is at 4% per month.

The interest rate is computed based on the amount of principal remaining after the deductions made from all the payments done by the borrower. The late interest rate would only be charged on the amount that was paid late. Further fees cannot be added by moneylenders that are yet to be repaid.

Furthermore, all moneylenders are only allowed to impose fees and charges for these three instances:

  • The fees for late repayments per month should not exceed up to $60.
  • Fees should not exceed 10% of the principal amount of the loans once it is awarded to the borrower.
  • Legal costs can be charged once it is ordered by the court for the recovery of the loan.

Moneylenders are also not permitted to charge an amount that exceeds the principal amount of the money borrowed.

Fake moneylenders would often use low interest rates to catch the attention of borrowers to their services. Once a victim gets a personal loan, the moneylender would change the fees without warning and it is way beyond the prescribed rates.

When this happens, it is imperative you report them immediately since these moneylenders will not stop until they get more than what you actually borrowed.

Repayment Process

It is important that borrowers check the repayment options available so you will be able to pay off your loans easily. Licensed moneylenders will be open in giving borrowers a flexible loan if they explain their circumstances. Moneylenders also consider the borrower’s income capacity to determine the amount they can borrow and sort it out to make it easier to pay.

It is ideal that borrowers ask the terms and conditions of the moneylender in terms of repayments, including early repayments and late repayments. For early repayments, for instance, it is possible that moneylenders would enact a penalty but others may lift it depending on the borrower’s request.

Repayments for fake moneylenders vary immensely since a contract is not given to borrowers, which would detail their loan terms.

If a client fails to pay on time, these fake moneylenders would pressure the client through force and their behavior changes. It is also possible they will add a wide variety of fees which should not be charged for late repayments.

Customer Service

Before you sign up with a moneylender, it is important that they assist you throughout the loan process. Licensed moneylenders have financial advisors on standby to assist borrowers if they have any concerns or inquiries about the loans they plan to avail. They would also assess your details

These advisors would also explain every aspect of the loan terms before you sign it. If you do find some problems, they will immediately respond to your inquiries and assist you. They also do as they promised and deliver loan applications on time.

Reputation

While a moneylender can be legitimate on paper, it is not a guarantee that they will provide the right service for the job. Make it a point to review comments and reviews from former and current clients of the moneylender you plan to speak to.

You can also search for the moneylender’s history because the length of their presence in the industry can tell their expertise in the field.

Conclusion

Whenever you need cash, you need to be sure that the lender you selected is someone you can trust. They must have your interests in mind and give you all the details you need to ensure that your personal loans will push through without any problems.

If you do not make it a point to ensure that you are trusting the right moneylender, it is possible you have fallen into the wrong moneylender.

With the help of the characteristics we cited above, we are confident you will be able to make the right choice when it comes to the moneylender you can trust.