There are around 160 licensed money lenders in Singapore. Before setting out to apply for a personal loan, you should know that licensed moneylenders are not malicious individuals with the intention to harass their debtors.
Licensed moneylenders on the list of licensed money lender maintained by the Ministry of Law are subjected to checks and balances just like banks. When offering loans, they need to get various approvals before moving forward, so it is common sense that they cannot possibly indulge in unlawful dealings and practices.
Not only do the authorities monitor them, but there are also self-regulatory bodies that guard against unscrupulous acts.
Why Choose Licensed Money Lenders?
Licensed Moneylender Association (LMA) has its own Code of Conduct. It does not allow dubious business practices such as charging exorbitant interest rates or having hidden charges. If one breaks the rules of LMA, they will be black-listed and banned from the money lending industry.
Licensed Moneylenders Are More Transparent
Loan applications with licensed moneylenders will require less documentation compared to bank loans.
That’s because they have access to your CPF information, so you won’t need to provide them with unnecessary documents to assess your loan application. You can get an estimate of how much you can get approved for in minutes through quick online forms.
Licensed Moneylenders Are More Flexible
Licensed moneylenders are not limited by strict banking hours or public holidays. They are flexible enough to accommodate the needs of their customers who might want a weekend appointment or after-office meetings if needed.
The authorities regulate licensed Moneylenders’ interest rates. Loan interest rates might differ from one moneylender to another, but it is doubtful that you will find a licensed moneylender who charges exorbitant interest rates.
This means your interest rate will not be as high as those offered on Credit Cards. Also, if you have bad credit, licensed moneylenders have flexible payment plans that banks usually do not offer.
Licensed Moneylenders Can Help You Out of Temporary Cash Flow Problems
Licensed moneylenders would only require a few pieces of information from you, and they’ll give instant approvals through quick online forms.
You can even get your personal or business loan approved within 15 minutes! If approved, the amount can be credited directly into your bank account in the next few days. Licensed moneylenders are not like banks, which will take up to 3 weeks to process your loan application.
Licensed Moneylenders Provide Fixed Interest Rates
When you apply for a personal loan in Singapore with banks or finance companies, they can increase or decrease your interest rates anytime, depending on their policies. If you have an existing loan (with the same company), it might be increased without prior notice when there is another policy review. This condition also applies whether you have a good or bad credit history.
With licensed moneylenders whose names are on the list of licensed moneylender companies, fixed interest rate loans are available. The interest rates remain fixed throughout its tenure until it is fully paid off. You’ll never have to worry about exorbitant interest rates creeping up on you.
Licensed Moneylenders Are More Reasonable
If you have bad credit or are in urgent need of cash, many licensed moneylenders will be willing to still work something out with you.
They can offer payment plans that suit your needs, and they might even lower the interest rate if you’re having trouble meeting your repayments due to personal reasons.
So why are so many borrowers still afraid of licensed moneylenders despite the vast improvements in their industry? This fear is because of the misinformation about these financial institutions. Hence, it’s not their fault. But it’s time for that to change. If you need additional cash flow, you can consider availing services from licensed money lenders.