Getting a loan isn’t that easy, especially if you’re facing an emergency and need one urgently.
In dire times, the last thing you want is to jump through the hoops of bureaucracy. In times like these, any form of help can feel like a gift from above.
But where do you look for help?
Under such circumstances, a licensed money lender is a viable alternative. We’ll explain why in this article.
What Does A Licensed Money Lender Do?
A licensed money lender is an agency that can legally offer financial assistance to people and companies. The agency makes a profit from the admin fees and the interest charged.
Not all Singapore money lenders are created equal, though.
Some have more experience, meaning they can craft more affordable installment plans. So instead of barely scraping by when repaying your debt, you can do that comfortably without even feeling the extra interest.
Choosing a licensed money lender has several advantages:
- Convenient repayment plans compared to credit cards
- Accessible installments
- Loan approvals even for people with low credit ratings
- Access to fast cash loans with less bureaucracy than banks
Where Can I Find 24-Hour Money Lenders In Singapore?
You can’t find a 24 hours money lender in Singapore, unfortunately. The Ministry of Law (MinLaw) has made it illegal to have such a practice on the island – and rightly so.
The biggest reason is to prevent borrowers from making impulsive financial decisions.
However, if you thought things through and want a loan as a tool rather than a crutch, you have another alternative:
- Do your research and choose a licensed money lender that fits your needs.
- Visit its website and apply at any time, day or night.
Although a 24-hour money lender is impossible to find on our island, the websites of licensed money lenders are still available. And if they’ve integrated their platforms with Myinfo, you’re in luck.
That means you can apply in minutes and get your pre-approval within the hour. One example is licensed money lender U Credit, where you can apply for a loan in minutes.
You can then arrange a face-to-face meeting the next business day – which can be the following morning. Therefore, you can get a fast cash loan in less than a day.
How to Differentiate Between A Licensed Money Lender And An Unlicensed Money Lender?
Your first clue to spotting an unlicensed money lender, or loan shark, is a lender that advertises as a 24-hour money lender in Singapore. There are also other tell-tale signs:
1. Payments (Interest Rate, Installments, And Other Charges)
A licensed money lender in Singapore must follow precise rules for these payments. We’ll detail them below but for now, suffice it to say these sums are fair and well-planned.
A loan shark, on the other hand, charges unfair and unreasonable interest rates and fees.
They don’t care about making the loan accessible to you; they only care about squeezing more money out of people. Therefore, they will:
- Ask for a pre-approval fee. Most people are tempted to pay an advance, especially if they need a fast cash loan from a seemingly 24-hour money lender.
- Increase your interest rate without notice. Loan sharks, or Ah Longs, will punish you by increasing your debt if you miss an installment, but they can also increase your rates to keep you indebted to them. They might use force and threats to ensure you’re not seeking outside help.
Any licensed money lender in Singapore is legally required to compose a contract and explain its terms to you, the borrower. Remember, there’s always time for a thorough contract, even if you need a fast cash loan.
This agreement will include:
- Repayment schedule
- Interest rate
- Tenure length
- Contract breeches
- Your rights as a borrower
Loan sharks don’t write up contracts because these documents are legally binding – and that’s the last thing they want. However tempting it may be to forego this document, remember it could cost you dearly later on.
3. Face-to-Face Meeting
Any Singapore money lender respecting the law must conduct a face-to-face meet-up with the borrower at its office. During this meeting, they will verify your documents to ensure they’re legit.
Although this practice seems time-consuming and useless, it’s not.
You need this due diligence too because:
- The money lender will ensure you fit legal requirements, thus lending you a sum that fits your budget.
- You avoid fraud.
In contrast, a loan shark posing as a 24-hour money lender will make a show of approving the loan by text or in your parking lot. They’ll even ask you to feel grateful for this “convenience.”
But don’t fall prey to it – Ah Longs are not to be trusted.
You can always find a Singapore money lender specialising in emergency or fast cash loans in a few hours. So use this time to do your research and pick the best option.
4. Advertising Channels
A licensed money lender can only advertise its company in business or consumer directories, its website, or on its physical premises. These restrictions that are enforced by MinLaw are put in place to prevent borrowers from getting impulse loans.
Loan sharks don’t care about your impulse decisions as long as these get them more money. That’s why they’ll send you DMs, flyers, or forwarded WhatsApp messages.
If you need fast cash, seeing these messages can seem like a sign from above. Just remember they’re not; they’re just subversive and illegal marketing tactics.
5. Maximum Loan Amount
Financially vulnerable people who need a large amount of cash are tempted to take that money when it’s offered without pondering the consequences. Imagine someone granting you $100,000 – no questions asked.
That’s a mistake.
Repaying the installments for such a massive loan is almost impossible. But a loan shark posing as a 24-hour money lender sees this as an opportunity to hook you for a longer period.
Conversely, a licensed Singapore money lender is bound by the MinLaw rules on maximum amounts.
These rules have two purposes:
- They protect the financial agency against customers who default on their loans. As such, the agency can keep its business up and running.
- They protect people from accumulating bad debt that lowers their standard of living or, worse, brings them to bankruptcy.
That leads us to the following point.
How Much Can I Borrow?
Personal loans in Singapore can’t be more than $250,000. But most people don’t qualify for this amount. According to MinLaw:
- You can borrow six times your monthly income regardless of your citizenship status if you earn at least $20,000 a year.
- You can borrow up to $3,000 if you’re a citizen or PR resident earning less than $20,000 a year. If you’re a foreigner, your income must be over $10,000 to qualify for this amount.
- You can borrow up to $500 if you’re a foreigner earning less than $10,000 a year.
Of course, those are just the maximum amounts you can access. A money lender can offer you less than that if your credit history doesn’t show financial diligence.
For example, a history of impulsive loans shows a lack of financial responsibility even if your credit score isn’t low per se.
On the other hand, those with a low credit score may seem more diligent if they have good reasons for missed payments (e.g. an accident that led to them losing their employment).
What Is A Credit Score?
The credit score is a rating you get for your financial behaviour.
For example, missing payments, opening multiple credit facilities, and applying for many loans within a short time frame, show a lack of financial planning. As such, they earn you a lower rating.
Instead, a history of good credit and timely repayments highlight a financially diligent customer.
It’s no wonder that people with higher ratings get better loans. After all, they pose fewer risks for their money lenders.
Warning: A loan shark posing as a 24 hours money lender in Singapore can tempt you with the promise of ignoring your credit score.
But loan sharks aren’t your only option.
Some trustworthy licensed money lenders in Singapore specialise in fast cash loans for people with bad credit. Therefore, you can still get the sum you need safely, even if your rating is lower.
What Are The Fees That Licensed Money Lenders Can Charge?
A Singapore money lender can only charge the following maximum fees (or lower):
- 4% from your remaining balance for the interest rate
- $60 late payment penalty
- 4% from your current installment as the late interest rate
- 10% admin fee
Note: These charges can’t be larger than the principal amount.
Let’s say that you’ve borrowed $5,000.
- The maximum interest rate for the first month is $200, but that interest decreases each month. When you only have $3,000 left to pay, your interest will be $120.
- If your installments are $400 per month and you’re late with one, your money lender can charge a maximum of $76 ($60 penalty fee and 4% out of $400 – late interest).
- The admin fee can’t be more than $500, so the money lender can legally wire you just $4,500 after loan approval. However, they can’t ask for $500 as a down payment to approve your loan request.
- The total of these fees can’t be more than the original $5,000 you’ve borrowed.
By contrast, loan sharks can ask you for 10 times these amounts without explanation.
What Should I Do If A Licensed Money Lender Is Harassing Me?
Unfortunately, even licensed money lenders can act in illegal ways. But here are some ways you can take action against them:
- Tell the agency and have its manager tone down unruly staff.
- Contact the Registry of Moneylenders at 1800-2255-529 or on their website. Include all relevant details in your complaint, including the lender’s name, contact info, and a detailed description of the harassment. If you have proof (e.g. texts, e-mails or recordings), attach them to your complaint.
- Call the police without hesitation if you fear for your safety.
If you need a loan urgently, apply now with U Credit or contact its loan advisors for a chat.