People always try not to take loans but some situations demand it. It is a big responsibility of the applicant to take a loan and repay it. He has to choose a licensed money lender Singapore for the purpose. Unlicensed moneylenders may be a fraud and catching them can be impossible. In this article, we will discuss the tips for choosing a moneylender.
The reputation of the moneylender
The first thing that people should check is the reputation of the moneylenders. To check their reputation, people should know whether the moneylender is licensed or not. A moneylender should have a valid license, which is issued by the Singapore Registry of Moneylenders. People can also check the reviews of various moneylenders online and the comments provided by their customers.
The next thing that people need to check is the experience of the moneylender, which should be in the range of three to five years or more. This experience will let people know about the reputation of the moneylender.
Rate of interest charged by moneylenders
People can apply any type of loan but it is important to remember that a rate of interest is always attached to it. Many money lenders charge low-interest rates for a particular type of loan. Many moneylenders advertise for low-interest rate but there are some other charges that they use to let the people know before processing the application.
This is the reason why people should go for legal and licensed moneylender Singapore like Lender SG Site that does not have any shady charges besides the interest. Moneylenders also provide a limitation on the amount of loan amount that people can apply for. People need to choose such a moneylender who can provide the required amount.
The maximum rate of interest
A rule has been made in Singapore, which came into force from 1st October 2015 regarding the maximum interest rate. According to this rule, no moneylender has the right to charge more than 4% of interest on any kind of loan whether it is personal, foreigner, payday, etc. If any customer is unable to pay back the loan on the specified date, the moneylender can charge a 4% interest each month until he receives the entire amount. One thing that a debtor need to note is that the 4% interest can be charged only on the amount that has not been paid back.
Other fees that a lender can charge are as follows.
- A penalty of 10% on the principal amount when an applicant gets the loan
- A fee of $60 is to be paid each month till the repayment is done
- If a moneylender has to go to the court to get back the money, the legal cost has to be paid by the debtor.
- There are around 170 moneylenders in the country with valid licenses. So, People need to check the name of the moneylender and if it is not found in the list, it is better to avoid them.
Processing the loan application
Moneylenders like Lender SG Site need to explain all the terms and conditions, which an applicant has to follow to get the loan and pay it back on time. A copy of the loan contract must be given to the applicant. The contract will include the rate of interest, potential fee if needed, and schedule of repayment.
Here are some of the things, which an applicant needs to see before signing a contract.
- Approval of the loan online, phone call, or through SMS
- Possession of various documents by moneylenders like driving license, work permit, etc.
- The signing of a blank contract
- Refusal by a moneylender to provide a copy of the loan contract
- Usage of foul language
MLCB or Moneylender Credit Bureau has information about the repayment of the loan that is taken by a debtor. People can check the record of the repayment and other details about the loan.
Flexibility in the schedule of repayment
The applicant has to think about the repayment schedule, which will be comfortable for him. He has to discuss everything regarding the payment with the moneylender. People need to choose such a moneylender who is ready to answer all the questions regarding the loan and its repayment.
Loan services and products
Besides checking all these things, people also need to check the products and services provided by the moneylender. This should be done so that if the applicant needs the services in the future, he can contact the moneylender for the same. A moneylender can offer different types of loans and may suggest the applicant about the type of loan that he can apply.
These are some of the tips, which people need to follow to choose the right moneylender for the correct type of loan. People need to check the reputation of the moneylender and its experience. They can do this by reading online reviews.