Irrespective of who you are or where you are in Singapore, there are times in your life when you definitely must have needed to borrow money either to offset some debts, to start a business or settle personal issues etc. During these times of need, many people have resorted to seeking help from loan sharks.
While these loan sharks are capable of lending you during these times, their method of operation happens to be quite different from that of licensed money lenders in Singapore. Loan sharks are simply individuals or most of the times group of people that offer loans at high interest rates.
The risks involved in lending these individuals money in times of need is why they charge high-interest rates, which makes it difficult for them (those who receive the loan) to pay back. When these individuals are unable to pay back, these loan sharks resort to violence and often times harassment.
This is completely different from how licensed money lenders function. These licensed money lenders in Singapore have been designed to work like a bank in the sense that they give loans to those that are genuinely in need of it.
Rather than resort to harassment and violence, these licensed money lenders would use dialogue and gentle reminders when individuals fail to pay off the loan as at when due. In addition, these licensed money lenders operate legally and have been authorized by the Singapore Ministry of Law.
For the purpose of those who do not know the difference between these two groups, we’ll take a look at some of the benefits, the types of loan they offer, and some of the tips you should consider before choosing to borrow money from a licensed money lender in Singapore instead of loan sharks.
Facts about licensed money lenders in Singapore
- These licensed money lenders, as mentioned earlier, are backed by law, meaning that there are stipulated laws and guidelines that they must follow if they are to continue operating. While unlicensed money lenders, otherwise referred to as “loan sharks”, resort to harassment when individuals delay in payments, licensed money lenders do not. When individuals make a late payment, gentle reminders and notice will be sent, and legal actions would be taken.
- Reasonable interest rates; as mentioned earlier, loan sharks charge high interest rates because of the risks involved in loaning out money to people. This is completely different from how licensed money lenders operate. Legally backed, these licensed money lenders will first take into consideration your current income before offering you a loan. This is done to ensure that you do not take more than you are capable of repaying. While taking into consideration your income, the interest rates are moderate, thus, ensuring that you are able to pay back when due.
- Faster processing of loans; while taking a loan from loan sharks may take time, licensed money lenders have considerably shortened the time to ensure that you get the loan as fast as possible. Licensed money lenders do not necessarily focus more on your credit history; they make the entire process faster and efficient with the intention of giving applicants their loans in less than no time.
The Types Of Loan They Offer
Licensed money lenders offer applicants the opportunity to choose from two types of loans.
1) Secured loans; in this type of loan, applicants will have to pledge an asset before they receive the stipulated amount. In this type of loan, the asset to be pledged is expected to be worth more than the amount of money that is to be given as a loan.
Those applying for this loan will have to present the title of their assets to the licensed money lender before the loan is issued. One of the main advantages of this loan is that applicants can get huge amounts of money.
When individuals fail to pay back the loan as at when due and all attempts to reach him/her is fruitless, the licensed money lender reserves the right to claim the asset.
2) Unsecured loan; this is completely different from the secured loan in the sense that you only pledge to pay back the loan as at when due. In this type of loan, there are no assets or properties to be presented by the applicant.
When individuals fail to pay when due, the only option of the licensed money lender will be to proceed to court, and if the individual does not have the exact amount to pay back, the court may order the licensed money lender to confiscate and sell off a property of the individual that is worth the amount.
The main advantage of this type of loan is that it does not pose a risk to the assets of the individual applying for the loan. However, the disadvantage of this loan is that applicants cannot receive large sums.
What You Should Consider Before Borrowing From A Licensed Money Lender In Singapore
While borrowing from a licensed moneylender in Singapore is a viable option for you at the moment, there are certain tips that you should take to heart. These tips will ensure that you do not burden yourself as you set out to take that loan to offset that financial need.
- It is advised that you take into consideration the number of options that are open to you before meeting with a licensed money lender. These options could be borrowing money from friends and family as well as other agencies that give out cash to those in a particular situation.
- It is important that you take time out to read the contract before signing. When desperate for cash, most people would become blind to the terms of the contract and would simply sign. It is advised that you do not become one of these people. Take time to read through the contract and familiarize yourself with the terms and conditions.
- Once you have understood the stated terms, you are advised to analyze if your ability to pay off the loan within the period of time-based on the terms.
- If you feel that you need to take the loan, it is of utmost importance that you take only the amount that you need at the moment. You should not borrow more than what you need to solve your problem.
- Choose a licensed money lender that has the best terms to borrow from. To do this, you will need to conduct research on some of the best-licensed money lenders available to you.
Getting The Best Licensed Money Lender In Singapore
You will definitely agree that taking out time from your busy schedule to review the various licensed money lenders may take a toll on your resting and working time. To prevent this from happening, LoanGuide,sg has been created. This website has been designed to direct you to the best licensed money lender in Singapore.
This website has been created on three core principles; integrity, confidentiality, and knowledge. With us, you do not have to worry about finding the wrong licensed money lenders. It offers you the top 3 licensed money lenders in Singapore to choose from. Check us out here to see which licensed money lenders are rated top 3 this month!