How To Check A Licensed Money Lender In Singapore

The rise of scammers and loan sharks in Singapore these days is worrying, more so if you are looking for a quick loan. 

If you are not sure how to check a licensed money lender, here’s some good news. 

A money lender is legitimate if it has a license. All licensed money lenders are regulated by the Registry of Moneylenders, and must abide by the Moneylenders Act. 

If you have all the necessary documents, getting a loan from a money lender in Singapore can be done within 30 minutes.

However, before applying for a loan, you should know how to check a licensed money lender.

This is due to the excessive interest rates and prevalence of loan sharks, also known as “Ah Longs”. 

So the first thing to do before you apply for a loan is to determine if the money lender you’re considering has the proper licensing to do business. 

Where Can You Find A List Of Licensed Money Lenders?

As mentioned, licensed money lenders are governed by the Moneylenders Act and Rules.

Currently, Singapore is home to 154 authorised money lenders. You can get a comprehensive list at the Ministry of Law’s online portal. 

The list of licensed money lenders in Singapore is regularly updated to incorporate new data so borrowers will know how to check a licensed money lender.

Visit the site to familiarise yourself with your rights and duties as a borrower, and the potential dangers associated with borrowing from a money lender.

What Licensed Money Lenders Can And Cannot Do

You should be aware of several things before getting a loan from a registered money lender. 

• Loans from money lenders can be used for anything from vehicle maintenance to education to house improvement to business expansion.

• By law, licensed money lenders can only charge up to 4% interest per month.

• Their loans are often not the same as those offered by conventional financial institutions such as banks. 

• It is common for money lenders to work with borrowers who have less-than-perfect credit.

• As a result, the interest rate on a loan from a money lender is typically much higher than that of a bank loan. This is because licensed money lenders take on more risk than banks. 

• In Singapore, money lenders are allowed to take 10% of the loan amount upon disbursal as an administration fee. The loan principal will be reduced by the amount of the fee.

What Licensed Money Lenders Can’t Do 

Stalking is persistent, unwanted attention that causes the target to feel threatened or unsafe. 

In that context, licensed money lenders are not allowed to stalk their customers for the payback of their loans. 

Borrowers in Singapore shouldn’t receive physical or psychiatric harm at the hands of licensed money lenders. 

Therefore, such lenders can’t employ aggressive, harassing tactics such as constantly calling or emailing the debtor. 

Licensed money lenders are also prohibited from causing physical harm to their customers’ property. 

For instance, they should not splatter paint on your windows or door, put up signs, or alter your locks without your knowledge.

Debtors should not be harassed, threatened, or intimidated by licensed money lenders in Singapore. 

This includes making unwanted phone calls at inappropriate hours, making offensive remarks, acting threateningly, or sending sexually explicit materials.

How Much Can You Borrow From A Licensed Money Lender?

You can borrow any amount you need with a secured loan from any bank that is authorised to offer such loans.

However, how much you can borrow from a licensed money lender is tied to your annual income. It also depends on your citizenship status.

You can only qualify for a $3,000 unsecured loan if you are a Singaporean or Singapore permanent resident and have an income of less than $20,000.

But you can acquire a loan that can be up to six times your monthly income if your annual income is at least $20,000 – if you are a Singaporean or Singapore permanent resident. 

On the other hand, foreign residents in Singapore with an annual income of less than $10,000 are eligible for an unsecured loan of $500.

However, a $3,000 loan is available if their annual income is between $10,000 and $20,000. They can borrow up to six times their monthly salary if they make at least $20,000 a year.

What Are The Interest Rates And Fees A Licensed Money Lender Charges?

Money lenders’ interest rates are set at 4% per month. Any borrower, regardless of income or collateral, will be subject to this borrowing cap. 

In addition, the money lender may impose a late fee of up to 4% per month for every month the loan is overdue.

After the borrower has made all principal payments, the remaining principal is used to calculate the interest due on the loan.

Only the portion that was paid late will incur the late payment fee. 

Legal money lenders in Singapore cannot charge borrowers interest on outstanding sums that are not yet due.

How To Tell If A Money Lender Is Licensed

Licensed money lenders in Singapore must adhere to stringent laws. If you are wondering how to check a licensed money lender, there are various ways you can try. 

Firstly, look at the list of licensed money lenders in Singapore on the Ministry of Law’s website. You will find the names, addresses, contact details, websites, and most importantly – license numbers – of licensed money lenders here. 

You can also call the hotline at 1800-2255-529 to verify a money lender’s legitimacy.

Remember that if you need to borrow money in Singapore, you should only do so through licensed money lenders. 

This will ensure your rights as a borrower and allow you to receive reasonable offers.

You can also check out the websites of several lenders before you come to a decision. 

Verify their details against the list provided by the Ministry of Law to check their moneylending license.

Check with the Registry of Moneylenders if you have any doubts or if something doesn’t seem quite right.

What To Do After Your Loan Is Granted

Don’t forget to do these things after the loan is disbursed to you.

Verify That The Principal Is Correct 

Check that you have received the agreed-upon principal amount from your licensed money lender.

Always remember that the origination fee should not exceed 10% of the total loan amount.

Pay Your Installments On Time

Keep up with your regular loan installments, and never be late. Doing so will help you avoid incurring late payment fees and interest.

In addition, it can have a positive effect on your credit rating. Talk to your lender and ask for more time to pay if you have trouble making payments.

Keep And File The Paperwork 

Always request a receipt when you pay back a loan from a money lender. Verify that the date, amount, and name are all spelled correctly.

Every January and July, a licensed money lender in Singapore must also provide you with a statement of account detailing all of your loans. 

Again, make sure that the name, amount, and date on your bill are all correct.

Keep your bills, cheques, and bank statements in a secure location. These can serve as evidence that your loan has been repaid in full. 

Also, ensure you check the money lender license of your lender.

Lodging A Complaint Against A Licensed Money Lender

As a result of efforts by Singapore’s Ministry of Law, licensed money lenders in Singapore need to abide by specific regulations and legislation.

You can register a complaint with the Registry of Moneylenders if you believe a licensed money lender has violated these rules.

Include the lender’s name, contact information, and dates and specifics of the incident when filing a complaint against a licensed money lender.

Loan agreements and lender letters are examples of documents that will support your complaint.

After receiving your complaint, the Registry of Moneylenders will investigate the situation.

The Registry may revoke a lender’s registration or impose a fine if it determines that the lender has violated the industry’s regulations.

You can find more details about filing a complaint on the Registry’s website.

The Consumer Protection from Unfair Trade Practices Act allows you to bring a claim with the Small Claims Tribunal or the Court.

It’s Crucial To Know How To Check A Licensed Money Lender 

You now have all you need to know on how to check a licensed money lender in Singapore. 

No matter how urgently you may need a loan, ensure you avoid working with loan sharks. 

With what we’ve discussed, you can easily find legal money lenders if required. 

You can also approach a reliable licensed money lender like 1AP Capital. 

We are one of the best in the industry for quick loans and affordable interest rates. 

Don’t hesitate to contact us or apply for a loan on our website for expert services on your financial needs.